Cardano is one of the top cryptocurrencies by total value, and many investors are looking to add it to their portfolio alongside popular coins such as Bitcoin and Ethereum. While those latter choices are available to trade in many places, including quite a few you might not expect, it’s harder to trade Cardano outside the major crypto exchanges, but you do still have options.
Here are three places to buy Cardano (ADA) and some key things to watch out for as you do.
What is Cardano?
Cardano is one of the most popular cryptocurrencies on the market today, and it’s among the top 10 by total value as of April 2022, according to CoinMarketCap.com. The currency was created in 2015 and began trading publicly in late 2017 starting at a few cents a coin. From there, it’s risen exponentially as traders have flocked to cryptocurrency, including Bitcoin.
Similar to many other cryptocurrencies, Cardano relies on a decentralized network of computers to verify and manage the crypto system. It uses what’s called a “proof-of-stake” system (like rival Ethereum) to verify transactions on its blockchain database, meaning that Cardano owners validate the system in exchange for rewards, in a process known as crypto staking.
Cardano also allows owners to use decentralized apps, or dApps, that enable smart contracts, and let users engage in financial transactions such as lending and trading, among others.
3 ways to buy Cardano
Cardano is not as widely available as some of the largest cryptocurrencies, including Bitcoin and Ethereum. These latter crypto coins can be bought at virtually all exchanges as well as through Bitcoin ATMs and payment apps such as Cash App and PayPal. Or they can be bought at a number of the top brokers for cryptocurrency.
Still, Cardano can be bought and sold at a number of locations, including the following.
Trading apps such as Robinhood and Webull provide access to many cryptocurrencies, opening up the coins to traders who don’t want to open a specialized account at a crypto exchange. In the case of Cardano, however, only Webull offers access to this crypto coin.
At Webull, you’ll be able to trade Cardano cryptocurrency and many others, including Bitcoin, Ethereum, Dogecoin and Solana. And you can do so 24 hours a day, seven days a week. Webull does not charge a commission on crypto trades, but you’ll pay a spread markup of 1 percent on buys and sells. And if you want to trade something else – stocks, ETFs, options – you can also do that at Webull.
If you’re focused exclusively on trading cryptocurrencies, and not just as a sideline to stock trading, then going with a crypto exchange could be a better option. That’s because crypto exchanges really focus on lowering trading costs for high-volume traders. In many cases, they’re the cheapest alternative to start trading and then they lower costs even further.
Popular options for Cardano include Binance.US, Kraken, Bitfinex, Crypto.com, Bitstamp, Bittrex and Coinbase. With a crypto exchange, traders will start out paying a price that’s among the best available – typically better than with traditional brokers or financial apps – and the prices decline from there. If rock-bottom prices matter above all else, then Binance is a good place to start.
Again, most options among traditional brokers allow you to purchase Bitcoin and Ethereum, but Cardano is a bit harder to find. One option here is eToro, which is a traditional broker in much of the world, though it allows American clients to trade only cryptocurrency, including Cardano.
The broker eToro works on a commission-free model, meaning you’ll pay a spread markup on transactions, and that amounts to 1 percent on each buy and sell. That’s pricier than what you’d find at a crypto exchange, but you might find the broker’s CopyTrader feature especially worthwhile. It gives you the ability to automatically copy the trades of the site’s most popular traders, and if you’re not quite ready to do that, you can simply see what they’re buying.
Buying Cardano: Here’s what to watch out for
As you’re thinking about how to buy Cardano, you’ll want to consider a few other factors, since they may affect where you want to buy the cryptocurrency:
- Cost. Your first consideration for buying and selling cryptocurrency may be cost, and that’s understandable, given that it’s likely to be the single biggest differentiating factor among trade providers. Commissions can vary widely, even in the most competitive segment of exchanges. If you’re trading in and out of the market frequently, then commissions will add up and it makes sense to minimize them where you can.
- Security. It can be easy to overlook the importance of security when it comes to trading, since it’s most noticeable only when it’s not there. Security has been a serious problem with some newer crypto exchanges, while more traditional brokers have had a stronger performance here. It’s worthwhile to check on security measures closely before you choose.
- Customer service. Customer service is not a strong suit for many low-cost brokers and exchanges. And usually that’s not a problem, because most of the time everything is fine. But if you run into an issue, you’ll need access to responsive customer support to help you out — something that will become all too obvious just when you need it the most.
- Taxes. It’s possible that you acquire Cardano through commercial transactions, and it’s important to know that transactions are reportable to the IRS, though you may not owe taxes on it.
So while cost may be the most important consideration, it shouldn’t be the only one.
While Cardano is not as readily available as the largest cryptocurrencies, you still have plenty of places to trade it, including a number of well-regarded options. And if you’re looking to trade other cryptocurrencies, too, it may make sense to go with a provider that can offer many other coins to trade, rather than one that offers only the most popular cryptocurrency names.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.