New investors are traders in the crypto zone who are often in a dilemma about whether or not they can use fiat to purchase crypto. The common practice for buying crypto is through crypto. But that could be a challenge for new investors as they are starting out in the crypto zone for the first time. So, unless they have received crypto as a gift or donation, they cannot buy crypto with crypto. However, much to the relief of new investors, fiat trading is allowed in the crypto sphere. It implies that you can purchase crypto through fiat money.
Fiat trading in crypto
When it comes to crypto purchase, you are allowed to use fiat money to buy crypto. The crypto exchanges accept a wide range of fiat currencies, including currencies from those countries where crypto is not legal yet- such as INR. The most popular fiat currency for crypto purchase is certainly USD. Other major fiat currencies common for fiat trading in crypto are EUR, TRY, RUB, KZT, and more.
However, it must be mentioned here that it’s only the centralized crypto exchanges that allow fiat trading in crypto. Decentralized crypto exchanges are yet to approve fiat payments for crypto purchase.
Various payment methods
You can choose from a wide range of payment methods when you sign up for fiat trading in crypto, such as credit or debit card, bank transfer, or wire transfer. In regard to bank details or/and card details, you can choose whether to save or not to save the details with the crypto exchange.
It’s a more convenient option to use a credit card if you are in a rush to purchase crypto. Credit card transactions happen instantly and the buyer receives crypto immediately as well. But it could take around a week for you to receive crypto if you opt for bank/wire transfer. But remember, credit card fiat trading in crypto will command multiple and higher fees in comparison to the other payment methods. So, you should only use card fiat trading in crypto if you have to buy crypto immediately.
Steps for purchasing crypto through fiat money
Step 1: Register with the exchange
The first step is to create your account with a reliable crypto exchange. However, since it would be a centralized exchange, your registration would depend largely on the approval of the exchange. You will have to pass the KYC verification process to receive approval from the exchange. The exchange would also ask for 2FA authentication.
Step 2: Log in and purchase
After the account has been created, the next step is to opt for buying. You will get “Buy Now” tab. Select it.
Step 3: Check payment mode
You will find a menu of a wide range of payment methods as offered by your chosen exchange., such as card payment, bank transfer, wallet transfer, wire transfer, and so on. You know about the three of these- wallet transfer is the transfer of fiat money from the exchange’s wallet. Crypto exchanges allow customers to store money in their wallets to help with fast and easy fiat trading in crypto. Look for a compatible payment method.
Step 4: Enter fiat details
Now, you will have to put in the amount of fiat you wish to allot for the crypto purchase. The moment you will enter the amount the crypto exchange will automatically state how much crypto the user might receive against the mentioned fiat amount. Press on “Continue”.
Step 5: Choose payment form
You already know by now the different types of payment modes offered by the crypto exchange. Also, you have decided by now the most compatible payment mode for you to purchase crypto this time. Now, just select the method.
Step 6: Confirm order
Double-check the payment data you have entered. If the details look right, simply confirm your crypto order. If you use a credit card, you will receive the purchased crypto in your wallet immediately. But if you use other methods (except wallet money), you might have to wait for 7-8 days.
The purchased crypto will be sent to the exchange wallet. It must be mentioned here that centralized exchanges serve as fund custodians and do not allow transfer of funds to some 3rd party wallet service. But with more and more crypto exchanges being attacked by hackers, you have to make sure that your chosen exchange will take the needed steps to ensure complete protection of your funds. Look for a leading exchange that is extremely particular about cold-wallet storage, 2FA authentication, as well as insurance protection for lost funds.
Advantages of fiat trading in crypto
There are multiple advantages of the fiat trading facility in the crypto zone.
Easy participation in crypto zone
The concept of fiat trading in crypto makes it easy to take part in the cryptocurrency zone, especially for the new investors or traders. Crypto exchanges accept a wide range of fiat currencies to cater to a diverse range of crypto users from several countries. Added to USD, fiat trading in the crypto world also accepts other major currencies like EUR, TRY, RUB, INR, KZT, NGN, and so on.
Another advantage of using fiat currency for crypto purchase is stable value.
Let’s say, you have saved some crypto to make a crypto purchase in future. Now, the crypto market is extremely volatile and these cryptos can plummet down any time. In that case, the saved amount of cryptos might not be enough for the desired amount of crypto purchase.
But, you don’t really face these problems with fiat currencies. Fiat is always more stable than crypto and its market value doesn’t fluctuate as often as that of crypto. Read more to pay with card.
Familiar way of purchase
Investors, especially the beginners, generally prefer to opt for fiat trading in crypto.
It’s because crypto is a new development and they are more familiar with the practice of purchasing with fiat money only. So, when they receive the opportunity to use the good old fiat in the crypto zone, it helps to create a sense of familiarity and comfort in a comparatively newer world.