How to buy cryptocurrency on the exchange. Photo: interactivebrokers.com
Earlier, reported about how one can get cryptocurrency in Ukraine. One of the easiest ways is to buy such a currency on a specialized exchange.
How does cryptocurrency exchange work
The operation algorithm of a cryptocurrency exchange is generally the same as any other one. The seller puts up a certain amount of cryptocurrency for sale at a certain price, and the buyer makes a purchase bid indicating the price and amount. These offers and bids (they are called orders) are recorded in the so-called orderbook.
The exchange automatically finds the coincidence of price interests in the orderbook in real time, and the orders cover each other, a transaction takes place—the cryptocurrency goes to the buyer.
From this principle of operation, it is clear that there cannot be some kind of fixed total cost for one cryptocurrency—each exchange has its own cost. And an exchange does not have its own "crypto rate"—there is a weighted average current value that constantly changes depending on the parameters of transactions closed at that moment.
This feature enables one of the options for the stock-exchange gambling: buying a crypt in one place and selling it in another. But there are often fees charged for transferring cryptocurrencies between exchanges that can nullify profits from such speculation.
Note that there are many options for paying and withdring purchased funds from the exchange. For instance, buying a crypt on an exchange is usually possible for real (fiat) currencies (including hryvnia) and for cryptocurrencies. You can withdraw the purchase in the form of real money (including hryvnia) to an ordinary bank card (Visa or Mastercard) or a digital wallet. Many exchanges allow their clients to store the purchased cryptocurrency on their platform.
For replenishing the wallet and for withdrawing real currency, you will need to pay a commission. It is different for different exchanges and depends on the currency. But, as a rule, it does not exceed 1.5% of the amount. The commission is paid for the operations of buying and selling crypto.
It should be borne in mind that the exchanges often set limits: for the minimum amount of a crypto purchase or for its withdrawal, for the minimum deposit amount, etc.
Some exchanges allow the users on their platform to trade directly with each other (P2P services).
Note that some world banks now prohibit their clients to carry out operations with cryptocurrency, including paying for purchasing a cryptocurrency from a card account. There is no such restriction in Ukraine yet.
How to start working on cryptocurrency exchange
First, you need to register on the exchange. The registration process on all exchanges is similar to registering on any other site. As a rule, you need to specify your mail and phone number and create a password. Often it is possible to register through social networks or Google.
For full-fledged trading on most exchanges, verification with a scanned passport will be required. Without this, it will not be possible to upload currency into the account and carry out any operations with it. Sometimes verification is required for amounts that are above a certain limit. And there are single exchanges that provide anonymous clients with ample opportunities to work.
After registration, you need to link a digital wallet necessary for storing cryptocurrency and a bank account to your profile.
Note that sometimes the verification procedure can be quite complicated, for example, you need to upload a scanned receipt of paying for an apartment, the name in which coincides with the name of the account owner. On rare occasions, the exchange may request confirming the origin of funds in the account.
How to create an order
We noted above that in order to successfully complete the operation, the crypto exchange users need to specify:
- order type (how to sell/buy);
- trading pair (what to sell/buy);
- the amount of the currency to be sold or bought;
- the cryptocurrency price (rate).
There are three types of orders:
- a market order allows you to instantly buy or sell an asset at the current market price;
- a limit order allows you to buy or sell at a specified price. It will be automatically executed when the market price equals the set limit price;
- a stop-limit order allows you to set the minimum desired amount of profit and maximum amount of loss. It implies two indicators: a stop price and a limit price. As a rule, such an order is placed by the traders who predict the movement of the crypt rate and want to make a deal only under a certain set of conditions.
The order is created on the exchange website or in its mobile application.
If you want to buy a crypt at the current rate, then often the exchange allows you to do this almost instantly, working in the format of a money changer. There is a special form for this.
Examples of cryptocurrency exchanges working with hryvnia
There are already several hundred cryptocurrency exchanges in the world at the moment, and at least 300 of them are considered as large.
It should be borne in mind that not all of them allow you to buy crypt for hryvnia or have Ukrainian and Russian versions. Here are some examples of the exchanges that are popular in Ukraine.
Binance is now the largest crypto exchange in the world. The daily amount on it exceeds $42 billion. More than 350 cryptocurrencies are represented there, of which only about 60 can be bought for hryvnia.
- for transferring hryvnia to the exchange account from a bank card—0.65%;
- withdrawing funds to a bank card—no commission;
- for transactions of the cryptocurrency purchase and sale—0.1%.
Exmo—the activity of this exchange is focused on the countries of Eastern Europe. It is considered the largest in the region (daily trading amount is about $86 million). The company is registered in London and has an office in Kyiv. You can buy 10 cryptocurrencies for hryvnia.
- for replenishing the hryvnia account—1% + 5 UAH;
- withdrawing funds to a bank card—1.49%;
- for transactions—0.3%.
Kuna is an exchange registered in the British Virgin Islands with a statutory address in Estonia. The exchange focuses primarily on the Ukrainian audience, which is why it is sometimes called the first Ukrainian crypto-exchange. The founder of the crypto exchange is Mykhailo Chobanian.
The daily trading amount is about $2 million. But the exchange is growing rapidly. For the hryvnia, you can buy about 20 cryptocurrencies on it.
- for replenishing the hryvnia account—1.5% + 5 UAH;
- for withdrawing funds to a bank card—1.5%;
- for transactions—0.25%.
All crypto exchanges have online support services. Many of them "understand" Russian and Ukrainian. Some exchanges assure that it is people who give answers to the users' questions, without the robot involvement.