Invest in Algorand – How to Invest in Algorand For Beginners
Launched in June 2019, Algorand seeks to enhance the blockchain experience for end-users through fast and secure transactions. The protocol’s pure proof-of-stake (PPoS) consensus mechanism also increases user participation in the development of the network. Currently, the network serves as a viable alternative for developers who are looking to avoid high transaction costs on other blockchains.
In this guide, you will find the step-by-step process of how to invest in Algorand, which brokers you should consider using, and the risks associated with this crypto project.
#1 Broker to Invest in Algorand – eToro
How to Invest in Algorand – Choose a Broker
Although numerous brokers exist in the market for you to invest in Algorand, not all of these platforms offer you a safe and cost-effective service. Below, we’ve highlighted the best brokers that currently support Algorand.
- eToro – Overall Best Place to Invest in Algorand
- Coinbase – User-Friendly Broker to Invest in Algorand
- Binance – Great Place to Invest in Algorand for Access to 100+ Markets
- Capital.com – Trade Algorand at 0% Commission
- Kraken – Notable Exchange to Invest in Algorand
These brokers have been assessed in terms of their fee structure, supported markets, credibility, user-friendliness, and more. Further down on this page, you’ll come across our full reviews of each Algorand broker.
How to Invest in Algorand – A Quick Guide For 2021
If you already have prior knowledge on buying crypto tokens, what you likely need is a brief guide on how to invest in Algorand. Thus, in this section, we highlight the steps you have to follow to complete your Algorand investment with eToro.
- Step 1: Open an Account with eToro: Search for the broker’s website online and proceed to create an account. You will be required to input your full name, nationality, and other contact details.
- Step 2: Upload ID: As a broker regulated on multiple fronts, eToro has to verify your identity. This step, which requires you to upload valid identification documents, is known as the Know Your Customer (KYC) process.
- Step 3: Make a Deposit: To invest in Algorand, you need to fund your account. eToro’s minimum deposit is $200 ($50 for US investors). You can do this through Paypal, a debit/credit card, a bank wire, and more.
- Step 4: Invest in Algorand: Search for Algorand and click ‘Trade’. After this, input your stake and open your investment by clicking on the ‘Open Trade’ button.
With the above-listed steps, you can invest in Algorand from the comfort of your home in safety. In addition, when you use eToro, an inbuilt wallet is provided for you to store your tokens after completing your purchase.
Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.
Where to Buy Algorand – Full Broker Reviews
Algorand is a protocol that was launched in response to the slow transaction speeds associated with Bitcoin and other first-generation blockchains. The protocol’s use case has contributed to the growth of the Algorand token in the market. Therefore, you can expect to find numerous brokers that allow you to invest in ALGO tokens.
However, not all brokers are worthy of consideration. For instance, you’ll want a broker that’s credible, easy to use, and charges very low fees. Based on these metrics and more, below are the best brokers in the market that you can consider when learning how to invest in Algorand.
1. eToro – Overall Best Place to Invest in Algorand
eToro is a reputable broker that has been in the investment industry for over 13 years. Over this period, the broker’s user base has grown to more than 20 million clients of varying sizes. One of the important factors accounting for the broker’s credibility is that the platform is licensed by multiple financial bodies across the UK, Australia, and the US. This boosts the level of confidence users have in eToro – since they enjoy regulatory protection.
Furthermore, eToro is a suitable broker for you to invest in Algorand as a newbie. This is because the broker has an interface designed to make it easy for beginners to navigate the steps involved in buying ALGO tokens. In fact, you need no prior knowledge to use the broker, as you can complete the entire investment process within 5 minutes by following the on-screen instructions. Once you open your account, all you have to do is add funds and then proceed to invest in Algorand.
Before discussing the broker’s fee structure, we should establish that eToro supports 30+ cryptocurrency markets. This includes Litecoin, Chainlink, EOS, Cosmos, Zcash, and more. This means that you can conveniently diversify your Algorand investment — as you have enough options to choose from. But before you invest in Algorand or any of these markets, you must first add funds to your account.
On eToro, the minimum deposit you have to make is $200, albeit $50 if you’re a US investor. The broker supports different payment options including debit/credit cards, Skrill, wire transfer, Paypal, and more. For making a deposit, you’ll be charged 0.5%. With that said, this is free for US investors. After adding the funds, you can proceed to buy ALGO tokens on a spread-only basis — as you won’t incur variable commissions when using eToro.
As a beginner, you’ll find eToro convenient to use, as the broker provides you with numerous tools to make the investment process seamless. First, you can leverage the copy trading tool to automatically replicate the trades of other investors in your portfolio. This way, you’ll be investing passively by leveraging the experience of the investor you’ve chosen. Additionally, the broker also provides you with educational resources that you can utilize to know more about the Algorand project.
- Invest in cryptocurrencies on a spread-only basis
- Minimum investment per trade from just $25
- Supports debit/credit cards, e-wallets, and local bank transfers
- Registered with FINRA/SEC and regulated by the FCA, CySEC, and ASIC
- Minimum deposit of $50 and no transaction fees for US citizens
- Used by over 20 million people
- Perfect for beginners
- Social and copy trading tools
- Perhaps too basic for technical traders
- No support for MT4 or MT5
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. 67% of retail investor accounts lose money when trading CFDs with this provider.
2. Coinbase – User-Friendly Broker to Invest in Algorand
As a newbie in the digital currency industry, Coinbase is a great broker for you to invest in Algorand. This is because of the broker’s ease of use, making it seamless for inexperienced investors to navigate their way conveniently. The end-to-end process of investing in Algorand through Coinbase takes less than 5 minutes. Once you open your account and verify your identity by uploading a copy of your ID, and you can then buy the number of ALGO tokens you desire.
Furthermore, another reason Coinbase is a popular broker is that the platform lists dozens of digital tokens. Asides from Algorand, you gain access to numerous other cryptocurrency markets including Solana, Ethereum, Cardano, Polkadot, Cosmos, Bitcoin, and many others. Therefore, diversifying your portfolio comes easy as you can choose from any of the listed options at the click of a button. Additionally, you can add funds to your account on Coinbase for free when you choose the wire transfer method.
However, a notable drawback concerning this broker is the overall fee structure. When investing in Algorand through your debit/credit card, you’ll incur a transaction fee of about 4%. We consider this a drawback because it significantly impacts the potential returns of your investment, especially if you’re investing in Algorand on a budget. However, if you don’t consider this a problem, Coinbase is a great broker that prioritizes security — as the platform stores 98% of users’ funds offline.
- One of the most popular cryptocurrency exchanges
- Over 68 million clients
- Supports instant debit card purchases
- Dozens of cryptocurrency tokens to choose from
- Institutional-grade security practices
- Debit card deposits are expensive at 3.99%
- You will pay a standard trading commission of 1.49%
at eToro, #1 Broker in the Crypto Space
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. 67% of retail investor accounts lose money when trading CFDs with this provider.
3. Binance – Great Place to Invest in Algorand for Access to 100+ Markets
Binance is popularly known as the largest exchange in the cryptocurrency industry in terms of trading volumes. One of the most notable things about the cryptocurrency exchange is that you gain access to 100+ digital token markets if you’re located outside the US. If, however, you’re a US client, – the number of tokens you can access is lower at 50+. Nevertheless, if you are based in the US, you’ll only incur a fee of 0.5% when investing in these markets with your debit or credit card.
On the other hand, this same service attracts a 1.8% fee if you’re a UK client. In fact, the fee can go as high as 4% in other regions. Ultimately, the specifics of the amount you incur while investing through this exchange will depend on your location. Notably, to buy Algorand on Binance, you have to perform a crypto-to-crypto exchange. This means you’ll first have to buy a token like Bitcoin and then swap it for Algorand. Binance offers five different markets for Algorand including ALGO/BTC, ALGO/USDT, ALGO/BNB, and more.
After purchasing your ALGO tokens, you can choose to leave them on the platform. Meaning, Binance will be in charge of safeguarding your private keys, so you don’t have to worry about getting a secure wallet. Additionally, Binance stores the bulk of these tokens offline for added security. This is in addition to the two-factor authentication process to double-check your identity before you can access your account.
- Facilitates billions of dollars in daily trading volume
- lists more than cryptocurrency pairs
- Near-instant deposits via debit/credit card
- Trading commission starts at just 0.1% per slide
- Offers crypto savings accounts
- Suitable for both newbies and advanced investors alike
- The debit/credit card feature doesn’t apply to all supported markets
- No e-wallet deposits or withdrawals
at eToro, #1 Broker in the Crypto Space
4. Capital.com – Trade Algorand at 0% Commission
Capital.com is a platform that allows you to trade contracts-for-differences (CFDs). When using Capital.com, you’ll be trading the underlying value of Algorand as opposed to taking ownership of the asset. Meaning, you won’t face the challenge of searching for a secure wallet. Notably, as this is a sophisticated way to invest in Algorand – you might need some experience to effectively use this type of financial instrument.
Nevertheless, another impressive feature of Capital.com is that the broker allows you to apply leverage when you open your Algorand positions. Suppose you want to open a $1,000 position, but you only have $100 in your account. You can apply leverage of 1:10 to open the position, meaning you’ll essentially borrow the remaining amount from the broker. Notably, although leverage can be an effective way to boost your Algorand trades, it can also lead to huge losses. Plus, limits will be determined by your location.
Nonetheless, Capital.com is a great platform where you can go long and short. This means you can attempt to profit from Algorand irrespective of the market movement — whether rising or falling. Additionally, Capital.com has a friendly user interface, making it convenient for both beginners and pro investors alike to use the broker. Using your debit/credit card, you can deposit $20 into your account to get started. Once you make the deposit, you can access various markets including Ripple, Ethereum, Bitcoin, and Algorand — all at 0%-commission. If you are depositing funds via a wire transfer, the minimum increases to $250.
- Top-rated spread betting and CFD broker
- Minimum deposit just $20 (debit/credit cards and e-wallets)
- All markets are tradeable at 0%-commission
- Tight spread and no deposit/withdrawal fees
- Supports thousands of financial markets
- Convenient for Newbies
- Experienced traders might consider the broker too basic
- $250 minimum deposit on wire transfers
- Not available in the US
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.25% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider.
5. Kraken – Notable Exchange to Invest in Algorand
Kraken provides you access to numerous fiat-to-crypto pairs and crypto-crosses. If you want to invest in Algorand alongside many other tokens, Kraken is one of the best platforms to consider. Furthermore, when you use Kraken, you gain access to numerous markets including ALGO/USD, ALGO/USDT, ALGO/BTC, ALGO/GBP, and more. Meaning, you can conveniently trade the Algorand pair you find most suitable.
If you also want to go a step further with your investment experience, you can attempt margin trading on Kraken — for US investors. Here, you use your tokens as collateral for investing in new assets. Many investors use this feature to increase their earnings in the cryptocurrency market. However, although the feature can be a tool for substantial returns, it can also lead to huge losses. As such, you might want to gain some experience in the trading scene before attempting to utilize margin trading.
Lastly, our research team found Kraken to have a high-fee structure. For instance, if you have a 30-day trading volume that’s under $50,000, you’ll incur a commission of 0.26% per slide. Another challenge that comes with using this broker is that the platform doesn’t offer personal wallet services. Meaning, you have to transfer your tokens over from a private wallet back to Kraken when you want to cash out.
- Popular cryptocurrency exchange and broker
- Great selection of cryptocurrencies
- Supports both crypto-cross and fiat-to-crypto pairs
- Accepts debit/credit cards and bank transfers
- Offers complex crypto instruments for experienced traders
- Not all US states are supported
- Fees are somewhat pricey
at eToro, #1 Broker in the Crypto Space
How to Invest in Algorand – Detailed and Explained in Full
Now that you are familiar with the best platforms to invest in Algorand, we will show you the relevant steps involved in buying the token. As opposed to the brief guide we provided earlier, this section is more detailed to help beginners navigate the steps easily.
In our strict analysis of various brokers using parameters such as regulation, ease of use, and cost-effectiveness, eToro stands out as the overall best place to invest in Algorand. Therefore, the following steps are discussed using eToro as our preferred broker.
Step 1: Open an Investment Account
Creating an account to invest in Algorand is easy on eToro. To sign up, visit the broker’s website – where you’ll provide your full name and contact details.
Following that, you’ll go through a series of questions designed to collect some of your personal details. This includes information such as your date of birth, social security number, home address, and more.
The broker will also ask some questions to determine your risk appetite and investment experience. The answers you provide here will determine the investment products the broker offers you. All in all, opening an account at eToro takes no more than a few minutes.
Step 2: Provide ID
You cannot fully utilize the platform’s features without verifying your identity. To do this, you will need to provide a valid ID and proof of residency. Concerning ID, you can upload your driver’s license or passport.
To validate your home address, you can provide your utility bill or bank statement. Once you complete this process, you will be able to use your local currency to deposit funds into your account.
Step 3: Deposit Funds
eToro has a minimum deposit requirement of $200. However, if you’re a US investor, the minimum amount you can deposit is reduced to just $50.
To add funds, eToro supports many options including debit/credit cards, Apple Pay, Paypal, wire transfer, ACH (US), and more. After funding your account, you can then invest in Algorand and the 30+ other markets supported by eToro.
Step 4: Search for Algorand
The next step is to search for the ALGO token. You can do this by entering ‘Algorand’ into the search box.
After the system displays Algorand, click on ‘Trade.’ This will take you to the order page.
Step 5: Invest in Algorand
Within the ALGO order box, input your stake. The minimum amount you can invest in Algorand when using eToro is $25. However, your investment plan might require you to put more than that behind the token. In that case, adjust the ‘Amount’ box to reflect the stake you want.
After finally deciding on your stake, you can then open your investment. Once you click the ‘Open Trade’ button, you’ve successfully invested in Algorand using eToro!
How to Sell Algorand
Irrespective of your stake, your goal is to generate returns on your Algorand investment. However, to cash out the returns on your Algorand investment, you must know the process involved in selling the tokens.
You can do this with the following steps when using eToro:
- Go to your account on eToro and click the ‘Portfolio’ button.
- Click on ‘Sell’ to initiate the process.
- Then, choose a market order.
- With this order, the broker will sell your tokens immediately.
There you have it! You have just cashed out your Algorand investment. From there, you can decide whether to reinvest your funds into another token. Alternatively, you can choose to process a withdrawal of your funds back to your bank account or debit/credit card.
Ways to Invest in Algorand
While it is important to understand how to invest in Algorand, it is equally crucial to know the different options you have to purchase the token. There are two typical ways for you to do this. You can decide to utilize a broker or a cryptocurrency exchange.
However, an important feature to consider when choosing either of these options is whether or not the platform ensures the security of your funds.
Invest in Algorand Using an Online Broker
In most cases, brokers are regulated by reputable financial bodies, making them a credible option for investing in Algorand. For example, eToro is licensed by the SEC, ASIC, FCA, and more. This heavy regulation has contributed to the broker’s credibility in the industry.
- Regulated brokers are mandated to operate segregated accounts for keeping users’ funds separately.
- Since eToro is a regulated broker, you can fund your Algorand investment through a debit/credit card — the fastest means to make payments.
- eToro has no hidden fees. You can access the broker’s fee policy to know what you’ll incur when investing in Algorand.
Furthermore, after purchasing your ALGO tokens, you can store them securely in the personal wallet the broker provides. As a beginner, this makes the entire Algorand investment process easy, since you can complete all the required steps on one platform.
Invest in Algorand Using a Cryptocurrency Exchange
Some cryptocurrency exchanges are attractive due to their low commissions. This is in addition to the fact that you can invest in Algorand anonymously — since there’s often no KYC process involved. However, regardless of an exchange’s features, the most important thing to consider is whether or not the platform is regulated.
With an unregulated exchange, you cannot ascertain the security of your funds. Additionally, you’ll be unable to make payments with your debit/credit card — since unregulated exchanges are often not licensed by reputable financial bodies.
Should I Invest in Algorand?
The cryptocurrency market is characterized by market volatility. Therefore, Algorand’s price fluctuates across the day. As such, before investing in this project, you might be unsure whether the token is right for your portfolio.
In that case, we would suggest you do extensive research to understand the project. This will guide your decision-making process — as you’ll know enough about the token to decide on whether to proceed or otherwise.
Pure Proof-of-Stake (PPoS)
Algorand’s Pure Proof-of-Stake structure decentralizes the conventional consensus system – where ordinarily, only a small portion of token holders control the network. Instead, the PPoS system democratizes access by allowing every token holder to participate in the development of the network and voting of proposals.
Additionally, unlike Bonded Proof-of-stake, users are not mandated to lock in their tokens before they take part in consensus. You can have your tokens safely stored in a wallet and still participate in the decision-making process of the protocol – which is a major advantage over other blockchains.
Low Entry Point
Often, investors consider buying tokens with a low price in the market, and Algorand fits the bill in this regard. As of the time of writing in late September 2021, Algorand sells for less than $2 per token. As such, and unlike crypto assets such as Bitcoin and Ethereum, Algorand has a low entry price. Meaning, even an investment of a few hundred dollars would get you a significant number of tokens.
The support a token receives from big players can also impact the growth of the coin.
- Concerning Algorand, the government of El Salvador — which had earlier approved the use of Bitcoin as legal tender — has signed an agreement to utilize Algorand for developing the government’s blockchain infrastructure.
- Another notable event surrounds Skybridge. This has resulted in an Alrgorand Fund which has raised more than $100 million from various investors.
These events have the potential of drawing the attention of more investors to the Algorand token.
Algorand is a protocol that seeks to achieve true decentralization by involving all token holders in its decision-making structure. This includes technical, monetary, and policy aspects of the network. Additionally, the protocol randomly chooses block verifiers, which is another factor that makes Algorand truly decentralized.
Consequently, the protocol has an active community of users — which is a crucial factor that investors consider when assessing a project. After all, the quality of a token’s community can drive the value of the coin in the market – especially in the long run.
What are the Risks of Investing in Algorand?
When you want to invest in Algorand, you have to contemplate the risks associated with the token. Knowing these risks will make it easy to contemplate the most effective strategies to manage them.
Here are a few risks you have to note when learning how to invest in Algorand.
- The first challenge with the ALGO token is its low level of adoption. Algorand has competitors in the cryptocurrency market, as there are many other protocols offering great execution speeds that make it easier for developers to build apps.
- As such, Algorand might need to do more to increase the token’s value in the market.
- Additionally, Algorand’s price fluctuates across the day. This means that the token’s price can drop negatively shortly after you make your investment.
- Another notable risk arises when you choose to invest in Algorand with a cryptocurrency exchange — as you enjoy no regulatory protection in that regard.
As earlier mentioned, once you’re aware of these risks, you can leverage some effective strategies to minimize their impacts. Concerning market volatility, you can decide to invest small amounts in Algorand, but on a regular basis. This strategy helps you to absorb the shock from price alterations.
Additionally, you can invest in other tokens alongside Algorand. This way, you’ll be diversifying your investment — a popular risk management strategy.
How Much Does it Cost to Invest in Algorand?
As a smart trader, you’ll want to know the potential costs of investing in Algorand in terms of deposits, commissions, withdrawals, and more. After all, knowing this will provide you with an insight into your possible returns if the market moves in your favor. However, the answer to this question is determined by the broker you choose.
- For instance, when you invest in Algorand with a broker like Coinbase using your debit/credit card, you incur a fee of 3.99%.
- However, eToro will only charge you 0.5% for the same service.
- Additionally, your location also matters when determining the cost you’ll incur while investing in Algorand. This is because a US client can make deposits on a fee-free basis when using eToro, while other nationalities pay 0.5%.
- Furthermore, the spread you incur on eToro when you open crypto trades starts at 0.75%. However, on other platforms like Coinbase, the spread might exceed 2%.
Essentially, you should exercise a great level of care when choosing a broker to invest in Algorand — as the platform will determine the cost you incur and the overall quality of your experience.
How to Invest in Algorand – Conclusion
In this guide, we have discussed the relevant steps you need to invest in Algorand. We have also covered the risks involved in purchasing the token, and most importantly, the best broker for you to use.
Of all the brokers our research team assessed, eToro is the best – not least because the platform is cost-effective and safe to use. You can begin your Algorand investment journey with a $25 minimum stake and opening an eToro account takes less than 5 minutes1
How to invest in Algorand?
Best place to invest in Algorand?
Should I buy Algorand?
How can I safely invest in Algorand?
How do I cash out my Algorand investment?