How to Buy Cardano (ADA) - A Beginner’s Guide
Cardano is a proof-of-stake blockchain platform that aims to provide changemakers, visionaries, and innovators with the means to bring a positive global change. The coin was launched in 2017, and it uses a cryptocurrency called ADA, which is used for participating in operations on its network.
As one of the top-ranking coins in the industry that already features thousands of cryptos, Cardano is seen as a blue chip investment token with fast-growing potential. To understand more about where and how to buy Cardano, have a look at our guide below.
5 Steps to Buy Cardano with eToro Now
Buying any cryptocurrency with eToro is easy, simply follow the steps below:
1Sign up for free with eToro, entering your details in the required fields.
2Fill out the questionnaire, this is both educational for you and eToro.
3Click 'Deposit', you'll then be asked how you want to fund your account.
4Choose your required payment method, follow the simple steps to link your payment.
5Enter the amount you want to deposit and you're good to go!
Our Recommended Platform to Buy Cardano
As mentioned, Cardano is a popular coin, and it is listed on numerous platforms. If you are already familiar with the process of buying cryptocurrencies and storing them on your own, then the following few sections probably won't be of much use to you, as they are meant for beginners.
Instead, allow us to recommend some of the top platforms where you can buy and sell Cardano (ADA), or trade ADA for another coin.
If you are a newcomer to the crypto industry, however, then stay put, and you will learn all there is about purchasing ADA, as well as different methods of doing it.
Where to Buy Cardano in 2022
Buying Cardano is easy, but before you do it, you must first decide on your approach. Basically, it all depends on what your strategy is, and whether or not you wish to own the coins or not.
You don't have to own actual ADA in order to make a profit. Instead, you can earn money by trading derivatives. These are special contracts, such as futures and CFDs, which rely on Cardano as an underlying asset.
Trading them means that you can make a bet on which way the price will go, and earn money if your prediction is correct. This is done via brokerages, as opposed to crypto exchanges, which is where you would go if you wish to purchase and own Cardano coins.
Owning the coins is a better strategy if you are in it for the long game, while trading derivatives is better for those who wish to make a profit quickly.
Now, let's see in greater detail how you can utilise these two approaches to your advantage.
How to Buy Cardano With a Broker
As mentioned, crypto brokers are a very good way to make a quick profit from small price fluctuations. However, in order to make the most of the situation, you must first select the right broker for you.
Crypto trading — whether using actual coins or through derivatives — has grown to be very popular, and there are plenty of brokers out there. As you can imagine, this makes the industry quite competitive, and therefore, no two brokers are the same.
Their offers differ in terms of fees that you have to pay, payment methods that they allow, security that they employ to keep your money and data safe, and more. Therefore, you should compare different brokers and see which one is the best fit for you.
Bear in mind that many of the brokers are not regulated, which makes them less safe. So, while they might offer cheaper fees, it is safer to go for regulated and reputable platforms, as you are then sure that you are putting your money in the care of a legitimate company, and not a group of scammers.
Now, once you choose the broker, here is what you need to do next.
1. Register With the Broker
Naturally, in order to use the broker, you must first register and create an account with one of them. This is easy enough to do, and on many platforms, you don't even have to make a new account, but can simply register with your Google or Facebook accounts. Pepperstone is one example of this.
Alternatively, if you don't wish to connect your social media accounts to a broker, you can simply go to eToro, enter your email and choose a username and a password, and be done within seconds.
2. Verify Your Identity (KYC Process)
Next, you will have to go through a KYC procedure, which every regulated broker requires these days. These are the procedures that will verify your identity, and it is mandatory for most platforms in order to prevent criminal activities.
The procedure is simple enough, and the broker will simply require you to upload photos of documents that confirm your identity, and potentially address, and similar details.
The amount of documentation and the type of documents that you have to deliver will likely vary from platform to platform. But, the broker will tell you exactly what it requires, so you don't have to worry about researching what information to present them with.
3. Deposit Funds With Your Preferred Payment Method
By now, you should have a verified account with a reputable broker, and you should, therefore, be ready to deposit your trading money. Presumably, you have found a broker that supports your preferred payment method, and you can simply deposit the funds.
If you don't have a preferred method, should consider several factors before deciding on one. Those include the cost of transactions, as well as their speed.
Other than that, make sure that you take proper precautions when giving away such information, such as owning and using a strong antivirus, and maybe additional security software.
Also, make sure that the funds have arrived at your account before proceeding to the next step.
4. Open a Position to Long/Short Cardano
Some brokers allow you to purchase coins directly, with eToro being one example. However, if you have decided to go to a broker in order to trade CFDs or futures, then you should know that you don't have to wait for the price to start growing before making your investment.
A good thing about trading derivatives is that you can make money off of them regardless of whether the price is going up or down, which is not the case when you buy coins directly.
You will have to do your research in order to make an accurate assessment of what will happen with ADA's price in the near future. But, once you conclude that, you will be ready to enter a position.
You can choose going short if you expect that Cardano's price will drop, or you can go longer if you believe that it will rise. If you end up being correct, you will profit based on the price difference.
Also, it might be a good idea to introduce market or limit orders, stop-loss orders, take profit orders, and similar protective measures. They are meant to immediately close your position if the price moves in an unfavourable direction, thus preventing major losses.
5. Close Your Position
The last thing to teach you here is that you can also close a position in order to immediately exit a trade. This will happen automatically if you used stop-loss or some other preventive order, and the price happened to reach the level you have chosen to exit at.
Alternatively, if you are satisfied with the earnings you made, or you entered a position, and then something happened in the industry that might impact ADA price in a way that doesn't suit you, you can also do it manually at any time in order to prevent losses.
How to Buy Cardano With an Exchange
Similarly to choosing a broker before making an account with one, you must also carefully select a crypto exchange that you are going to use. The same rules apply here — different exchanges charge different fees, offer different payment methods, exchange rates, security measures, and alike.
Because of that, you must carefully compare different trading platforms and pick the one that offers satisfactory terms. Also, if you are a beginner, you should also try to find a user-friendly exchange, which doesn't feature countless complicated tools that will only distract you. Such advanced platforms can be rather intimidating for newcomers, and if you run into one, it is important to know that there are simpler alternatives.
But, once you make your choice, here is how to proceed.
1. Set up a Cardano Wallet
The first step is to set up a cryptocurrency wallet in which you will store your coins. This is the first step for everyone who aims to buy Cardano with the intention of storing it for a longer period.
Exchanges feature their own wallet to which ADA will be transferred after purchase, or trade has been complete, although you shouldn't keep your coins on an exchange for longer than is absolutely necessary.
There are several reasons for this. For example, if you leave your coins on an exchange, and the exchange gets suspicious about something, it might freeze your funds. Your coins might become inaccessible to you if the exchange shuts down suddenly, or its platform crashes for some reason.
Not to mention that you are also in danger of losing funds to hackers, should they manage to infiltrate the platform and access the exchange's hot wallets.
There are different kinds of wallets for you to choose from, including software and hardware wallets.
Software wallets include online (hot) wallets, desktop wallets, and mobile wallets. Alternatively, you have cold storages, which is another name for hardware wallets, which are devices that you can store your coins on, and then detach them from your PC, thus making them unavailable for anyone else.
Hardware wallets are the most impractical, as you cannot shift coins unless you plug it into your PC. However, they are also the safest. Hot wallets are the most convenient, as they are always online, and you can transfer coins at any time, but they are also the easiest to hack.
Desktop and mobile wallets are somewhere in between, as they can act as hot or cold wallets, depending on whether or not you have connected them to the internet.
2. Choose and Join an Exchange That Sells Cardano
With the wallet ready and waiting, you will be ready to join an exchange. As mentioned, you need to choose which one to use, based on their properties, available payment methods, fees, and alike. It goes without saying that you should choose a cryptocurrency exchange that offers you to buy Cardano, preferably one that has paired ADA against fiat currency.
3. Choose Your Payment Methods to Buy Cardano
Most exchanges offer multiple payment methods that you can use to buy cryptocurrencies, but once again, it matters which one you choose, as they have different properties.
For example, you can buy ADA with a credit card, which is fast, and it lets you buy more at once since you get to borrow some money from your bank. The downsides include higher fees and the fact that you have to pay back the bank later on.
Debit cards are also just as fast, and they let you avoid owing to the bank by only letting you use the money that you already have in your account. However, the fees are just as high as with credit cards, and you can only use the money that you already have, which may or may not let you buy a lot of coins.
Bank transfers are the cheapest and a very secure method, but they are slow, and you won't be able to finish the purchase quickly.
PayPal doesn't really support crypto exchanges, and besides, it has very high fees, so it likely wouldn't be the best payment method, even if you could use it. It does allow you to buy crypto via P2P platforms, but that is a completely different type of platform and not a regular crypto exchange.
4. Place an Order to Buy ADA
With the wallet set up, an exchange account created, and a preferred payment method all in place, you are ready to buy coins. Click on the Buy Crypto option, and you will be transferred to the buy screen, where you will have to enter the coin you wish to buy, the amount you are looking for, and select the payment method you prefer.
It is quite simple and straightforward, so you shouldn't have any problems with that.
5. Safely Storing Your Cardano in a Wallet
The last step is optional, and it includes depositing your coins in a wallet that you set up in step one. It is not mandatory, so you don't have to do it if you don't want to. However, for the reasons mentioned above, we recommend that you do.
Simply go to your wallet, and copy your Cardano address. After that, go back to the exchange, choose the option to withdraw funds, and paste the address in the appropriate field. Enter the amount, and you are all set to send your ADA coins to the wallet, where they will be kept safe.
Should You Buy or Trade Cardano?
Now that's the real question, and it depends mostly on whether you wish to invest in ADA, or simply make a profit based on its price movement. As mentioned, you will need to use an exchange for one, and a broker for another approach. This choice will depend on what you wish to accomplish, what strategy you decided to use, and what kind of trader you are.
What's the Difference Between a Cardano Exchange and a Broker
As mentioned, Cardano brokers allow you to trade CFDs and futures, which is the way to go if you don't want to have to own coins, set up a wallet, secure and manage your cryptos yourself, and alike. This is the best option for short-term traders, who simply wish to use Cardano's price to make a profit.
If that sounds right to you, then the broker is the way to go. If, on the other hand, you want to invest long-term and store your coins in a wallet where they will stay safe until you decide to sell them or use them, then you should go for an exchange, and buy them directly there.
Long vs Short Term Investment
Of course, that also depends on whether you want to invest in the long or short term, in the first place. You see, most people agree that cryptos are here to stay. That is why they tend to buy coins when their price is low and get as many of them as they can. Then they lock them up and forget about them for months, sometimes even years.
Then, when the price grows — as is expected to happen — they will sell them and make a profit. It is a great way to invest in the future if you are optimistic about specific crypto.
Short-term investments include buying coins with the intention of selling them in a few days, or maybe weeks. Short-term investors don't expect to hold the coins long, and they only make a profit out of smaller price fluctuations.
So, pick your approach, and then figure out whether a crypto exchange is a better choice than a broker, or not.
Pros and Cons of Buying Cardano
ADA’s capacity is big enough to accommodate over 4000 transactions per second, making it among the fastest in the industry. But there are many pros and cons of the altcoin. We’ve outlined the core advantages and disadvantages below.
- Transaction Speed: It can do multiple transactions, thanks to its 2-layered approach. The Cardano Settlement System (CSL) receives and takes the ADA tokens while the Cardano Computation Layer (CCL) handles the relevant information on the parties in the engagement. It gives enough room for multiple transactions co-occurring, both commercial and individual.
- Security: The Cardano security system is among the best in the market. It can withstand quantum computing which is responsible for cyber-attacks and malware.
- Exclusive wallet: ADA prides itself as among the few cryptocurrencies with an exclusive wallet; the Daedalus. Its security, compatibility to other cryptocurrencies and hierarchy determinants are perfect for Cardano blockchains.
- New to the market: ADA is a relatively new inclusion in the crypto-markets. The size and influence of the ADA are still low, with a majority of its customers coming from Japan.
- Unstable: Its technology has a lot of developmental areas, which makes it an on-the-move currency. This reduces its stability in the crypto-market, compared to its peers.
What Are the Fees Involved in Buying Cardano
- Transaction fees: This is the cost of moving the digital currency from one platform to another. It is the margin used to ensure the platform is running, and all the associated technology and resources are serviced.
- Deposit fees: This cost is associated when the coin is being introduced into the systems from hard to soft currency. It is the transition cost of the currency (in its original form or fiat) from one form to another.
- Withdrawal fees: This happens when a customer wants to sell his or her holding digital currency in exchange for fiat or the actual ADA coins. The brokers or vendors levy it as their trading margin. The charge varies from one service provider to the other with the highest charging 4% of the total withdrawable amount.
- Spreads & commissions: Spreads are the amount payable to traders who do currency evaluation (rising and falling). Their cut is a percentage of the total income from the transactions. The same explanation can be said of commissions, just that commissions may be diversified on-trade basis. Commission based payments have been on the decline due to the competition in the cryptocurrency market.
3 Tips to Buy Cardano
Lastly, let us share a few more tips regarding how to buy Cardano. Trading crypto can be exciting to a lot of traders, and it is not unusual to get carried away, which is why we recommend you keep these tips in mind at all times.
Choose the Right Time and Do Your Own Research
Both of these are rather sensible when you think about it, but a lot of people make the mistake of completely ignoring them. Don't trust anyone who suggests that you invest in any asset, even if it is someone close or trustworthy. It is your money, and therefore — your choice. You make the decision, based on research and facts, and not someone else's suggestion. If you decide that buying ADA is the right move, wait for the right time to buy, which is usually when it drops, and it seems that a surge might start soon.
Compare Costs to Buy Cardano
Different exchanges offer different exchange rates, as mentioned, so don't stick to the first platform you run into. Check out different exchanges, compare their terms, prices, and exchange rates, and then decide which one to use.
Safety and Security
Finally, don't forget about safety and security at any point. Your money has value, whether it is in fiat or crypto. If you are serious about securing your dollars, euros, or otherwise — you should also be just as concerned about securing coins and using safe platforms for dealing with them.
What Is the Best Payment Method for Buying Cardano
You can buy ADA via numerous different payment methods, including:
Buy Cardano with Cash: There are few places or organisations with the capacity to change fiat with ADA coins. If you have fiat, a willing buyer willing seller approach is the way out, although price stability is not guaranteed.
Buy Cardano with Credit Card: The traditional infights between the credit/debit card and digital coins has stifled this conversion. If this should be a factor, convert the currencies from platforms such as Binance or Bittrex before purchasing ADA tokens.
Buy Cardano with Bank Transfer
Buy ADA with Bitcoin
Buy Cardano with PayPal: PayPal has a customer-centric approach, which makes it undesirable to most cryptocurrencies. Its costs are high to cushion these factors, making this format unattractive to most customers.
Other Ways to Buy Cardano
Apart from the most popular methods of getting Cardano which we mentioned above, there are alternatives such as:
Buying Cardano on P2P platforms
Using decentralised exchanges (DEXes) to buy ADA
Getting ADA as payment for some sort of work online
Buying Cardano via crypto ATMs
Running masternodes and receiving rewards
Lending ADA that you own, and receiving interest
As you can see, there are plenty of options for anyone who wishes to acquire Cardano, and there really is no excuse for not doing so, if you think that it is a good idea. Cardano has been a top-ranking coin for years now, and most people agree that it is a safe investment. As pointed out, you should form your own opinion, but knowing that it has a major user base is a good reason to consider it.
Frequently Asked Questions
There is not really a good or bad time to buy ADA. If you think that its price will be much higher in the future, you can buy it right now, or wait for it to drop a bit. If you go for ADA derivatives, you can buy it at any point, and make your prediction.
Absolutely. Low price means that you can buy more coins, and the more you buy, the more you can earn when even small price fluctuations happen. Just be mindful of the risks, as the price can drop just as easily.
Yes, Cardano is after total transparency and decentralisation, its team is well-known, and the coin has never given any reason for users to doubt it.
Yes, Cardano is completely legal to buy, sell, trade, and own. It might not be legal to use it in some countries, so make sure to check your local laws regarding crypto first.
You can trade it, store it, sell it, use it within its own ecosystem for voting and using smart contracts, and maybe even use it for purchases if you find a merchant who accepts it.