I outline here what I did when I first decided to buy some crypto. This ain’t advice or recommendation (and I accept no liability), but merely an explanation of my experience, so be sure to do your own research.
I first started out by opening a Coinbase.com account. Coinbase was available in Ontario, Canada, and had some good reviews and regulatory approvals. After looking at a bunch of cryptocurrencies, I decided I wanted to buy some SUI. I bought it using a debit card, which was a mistake because of the huge withdrawal/deposit fees.
I wanted to put some more money into the account, so I did it via Interac transfer from a bank account. It took 5 days, but had no withdrawal/deposit fees. So, in terms of fees, this was way better than by using a credit or debit card.
When I had more money in my Coinbase account, I bought some other cryptocurrencies. I was very fortunate because the US election results (more pro-crypto) made everything rise quickly after November 5, and I watched everything increase in value. This was unusual, I would discover later.
Using Coinbase meant that I was using a ‘hot’ wallet, hosted by Coinbase. I found the whole issue of ‘hot’ versus ‘cold’ wallets to be a large topic and had entirely new concepts to study. So, I stuck with the Coinbase hosted wallet.
I learned that it was best to convert my CAD to USDC cryptocurrencies. USDC is a stablecoin, meaning it is associated with the US dollar and its value is relatively stable at $1 per token. There are other stablecoins, but I chose USDC. I learned that most, if not all, transactions in the crypto world are recorded in US dollars, so I had to forget about thinking in Canadian dollars.
I found that the fees were high to make transactions on Coinbase.com. I learned they also had an ‘Advanced Trade’ toggle that leads to a more sophisticated trading platform, and at significantly reduced fees.
I was using ‘Market’ trades and discovered if I used ‘Limit’ orders I was able to get even lower fees. Limit orders just meant that I was able to choose a price, less than the current price, at which my order would be triggered. I was the ‘maker’ of the trade and someone else was the ‘taker’. Maker fees are much lower than taker (Market) fees. This was a great find and I have learned that it’s not available everywhere in the crypto world.
I kept learning about fees. There are fees charged by the platform. There are ‘gas’ fees charged by the blockchain. Although not a fee, there are also ‘spreads’ between ‘bid’ and ‘ask’ prices. All of these contribute to a seeming disparity between what I paid and what I expected to get. I’m still learning about fees, and am still often surprised – not in good ways.
Thanks, Jim.
(Note: Sorry, but this isn’t to be construed as advice or recommendations, just my experiences)