How to trade Bitcoin and Ethereum for other cryptocurrencies
Welcome to Part 2 of our series on how to buy cryptocurrencies safely in the U.S. This will be a comprehensive guide covering everything needed from start to finish, with screenshots to guide you along the way.
- Part 1 — How to buy Bitcoin and Ethereum with a bank account or credit card
- Part 2- How to trade Bitcoin andr Ethereum for other cryptocurrencies (this post)
One of the things we learned was people don’t know where to start with cryptocurrencies. So, we did a Meetup on this topic and thought we would share our talk.
There is lots of information out there and it is hard to know who to trust and what information is relevant. I will separate this guide into two sections.
Table of Contents
This post will be split into seven sections, with screenshots to guide you along the way:
- What type of exchange do I use and what information do I need in order to create an account?
- Poloniex: Creating an account and verifying your identity
- Poloniex: Transferring Bitcoin or Ethereum to your account from another exchange
- Poloniex: Purchasing another cryptocurrency with Bitcoin or Ethereum
- Bittrex: Creating an account and verifying your identity
- Bittrex: Transferring Bitcoin or Ethereum to your account from another exchange
- Bittrex: Purchasing another cryptocurrency with Bitcoin or Ethereum
Note: creating an account and verifying your identity on exchanges can take anywhere between 1–7 days, and purchasing Bitcoin or Ethereum with a bank account can take anywhere from seconds to 7 days depending on the exchange, your bank, and your level of verification. If you’re at all interested in purchasing cryptocurrencies, we suggest you start the process sooner than later so that you’re not stuck waiting for these to complete while you watch the prices rise impatiently.
1. What type of exchange do I use and what information do I need in order to create an account?
Similar to fiat-to-crypto exchanges, the other type of exchange is a crpytocurrency-to-cryptocurrency exchange. This means you sell cryptocurrency (Bitcoin / Ethereum are the most common) and buy other cryptocurrencies such as NEO, XLM, XRP, and XRB to name a few. (In Part 1 of this guide, we covered how to purchase Bitcoin or Ethereum with your bank account which is a prerequisite to this portion of the guide.) You will see trading pairs like BTC/NEO or ETH-XLM. Unfortunately, there isn’t a standard and some exchanges will put the buy in front (NEO/BTC) or put the sell in front (BTC/NEO).
So, what U.S. based exchanges allow you to buy cryptocurrencies with other cryptocurrencies?
Background information about creating accounts on an exchange
Poloniex and Bittrex both have an easy account setup process and are similar to the Coinbase / Gemini process. You will need similar information to verify your identity because they are both U.S. based exchanges and follow similar laws to Coinbase and Gemini.
In order to create accounts you will need the following information:
- Email address
- Full name, cell phone number, and home address
- Social Security number (for higher limits)
- Driver’s license (front and back)
- Webcam, so you can take a picture of yourself.
Note: Although its not included in this tutorial, you should always enable 2FA on your accounts as an extra layer of security.
Why do I need all this information?
The U.S. has very strict laws on trading virtual currencies/securities (Bitcoin, etc). These laws are normally refered to as “Know your customer” (KYC) and “Anti money laundering” (AML). You can read more information about what these are here and here.
Background information on transferring Bitcoin / Ethereum
So you successfully have an account on one exchange with Bitcoin / Ethereum that you purchased with your bank account! The next step is to send it to another exchange so you can purchase other cryptocurrencies.
The basic concepts involves transferring money from one “wallet” to another. A wallet, in simplest terms, is an address that “holds” your Bitcoin or Ethereum. You have different wallets for different currencies (in most cases). Although this adds a little complexity, it makes sense. Image if you had 1 bank account that contained U.S. dollars and Euros. It would be hard to differentiate them.
So we need to make sure we transfer the Bitcoins from the Bitcoin wallet to another Bitcoin wallet. Same thing applies to Ethereum (transfering Ethereum from one Ethereum wallet to another Ethereum wallet).
2. Poloniex: Creating an account and verifying your identity
Account creation and verification
Note: The images may become out of date because websites are constantly changing them to make it easier to register.
Step 1: Go to www.poloniex.com and click create an account.
After you click Register, you will see a page to verify your account (similar to the one below).
You will receive an email from Poloniex that looks like:
Welcome to Poloniex!
Please click this link or paste the address into your browser to confirm your registration:
After clicking that link, you will be sent to complete your profile. Sign in with your account.
Step 3: You will then be asked to verify your identity and complete your profile. Note: The below picture is out of date, but the information is still relevant. The new interface looks similar to the Coinbase and requires you to upload your driver’s license via your webcam instead of the “choose file”.
Verification may take 10 minutes or a day. So be patient with it.
Step 4: Voila, you should have a verified Poloniex account and you are ready to transfer Bitcoin / Ethereum to it.
3. Poloniex: Transferring Bitcoin or Ethereum to your account from another exchange
Step 1: Decide on a currency to transfer. In this case we will choose Ethereum.
Step 2: Go to your wallets. https://poloniex.com/balances after logging in. You can also click on the top right Balances -> Deposits and Withdrawals.
Step 3: Find your wallet address or generate a new one. On the top right you can type “ETH” for ethereum or scroll down until you find it. If you already generated one, it will look like the screen below. If you haven’t it will have a small text that says “Got it. Show me the Deposit Address.”
Remember only send Ethereum to an Ethereum address.
Step 4: Copy that long string of characters (never manually type them).
Step 5: Go to your Coinbase or Gemini account to send Ethereum.
For Coinbase, you will want to go to https://www.coinbase.com/accounts/ after logging in.
You will then want to click on Send.
You will want to paste the address you copied above in the recipient section.
Below is an example of withdrawing Bitcoin from Gemini. NOTE: DO NOT SEND BITCOIN to an ETHEREUM address.
For Gemini you will want to go to https://exchange.gemini.com/withdraw/btc after logging in.
Similar to the example above, you would find the Bitcoin address from Poloniex, copy it and paste it in the “Destination Address”.
Step 6: You now just wait ~20 minutes and your Bitcoin / Ethereum should be transfered to your Poloniex account.
4. Poloniex: Purchasing another cryptocurrency with Bitcoin or Ethereum
You made it to the last step. You can finally buy something else other than Bitcoin / Ethereum.
Step 1: Go to Exchange tab after logging in. On the right hand side you will see Markets that are available. If you transferred Bitcoin, then use the BTC market. If you transferred Ethereum,use the ETH market. It may be easy to filter for the specific coin you are looking for as well.
Step 2: After clicking on the cryptocurrency market you are looking for you can put a Buy limit in. In this picture, we are buying XRP (Ripple). Note: This section assumes you transferred Bitcoin to Poloniex
In the price section, it may be easiest to click on the “Lowest Ask” (the underlined section). It will auto fill the price for you. You can adjust it after that. Again, be careful with your adjustment.
In the total section, you can select how much Bitcoin (in this case) you want to spend. You can also click on the “You have” (the underline section) if you want to use the max. It will auto fill the Amount section for you.
Then you click buy. This will put an order in to see if anyone wants to do a trade with you.
Step 3: Voila! You now own a cryptocurrency other than Bitcoin / Ethereum!
5. Bittrex: Creating an account and verifying your identity
Account creation and verification
Step 1: Go to www.bittrex.com and click Login
Step 2: Click the “Sign up” button below the login box.
It should bring you to a page that looks like this.
Step 3: Fill out the required information and click Sign Up. You should see an email verification screen.
Step 4: Go to your email address and find an email that looks similar to this.
Step 5: Clicking the link will bring you to a page like this. You successfully created an account and can now login.
Step 6: Now let’s setup basic verification (~$3,000 withdrawal per day) and enhanced verification (~$100,000 withdrawal per day). After you login, click on the Settings button
Step 7: You should see a big green button that says “Upgrade to Basic”. If you don’t on the left menu you will see “Basic Verification”
Fill out the required information (First name, last name, DOB, etc). It will scan public data to see if it can verify you. If you are successful you will see:
If you aren’t (I wasn’t able to pass when I tried), you will need to sign up for enhanced verification.
Step 8: Click on the Enhanced Verification (left side panel). You should see a green “Start Enhanced Verification”
Step 9: Read the tips section on how to make a successful verification. At the time of writing you could use a passport or driver’s license, but we recommend driver’s license (it has had more success). Once you are ready click on “Start ID Verification”
Follow the on screen instructions similar to the images below. These pictures require to take a picture and save it to your computer, but there have been reports of allowing you to use your webcam instead.
Once you have uploaded the correct information, you will see a page like this:
After your account has been approved you should see a screen like this. Note: You will need to enable Two-Factor Authentication to withdraw the money. Its on the left hand side of the picture below, but not included in this guide.
You are now ready to do trading (and withdrawals)!
6. Bittrex: Transferring Bitcoin or Ethereum to your account from another exchange
Step 1: Decide on a currency to transfer. In this case we will use Bitcoin
Step 2: Login to bittrex and click on the wallets section:
Step 3: Find the Bitcoin wallet. On the top right there is a search box you can use if you get stuck. Once you found it, click the “+” button next to Bitcoin.
This will bring a pop up up with the ability to click “New address” (Below is a picture). Note: you only have to generate an address once on each coin. That address should show up the next time, but ALWAYS double check before sending money. We also recommend you do the same thing for Ethereum as well.
It will generate an address that looks like this:
Step 4: Copy that string Note: (“1xxxxxxxxxxx”) or (“3xxxxxx”) for Bitcoin. Ethereum addresses will start with“0x”)
Step 5: Is identical to the previous section for Poloniex. You will want to send money from Coinbase or Gemini. I will just show the Gemini, screenshots below.
For Gemini you will want to go to https://exchange.gemini.com/withdraw/btc after logging in.
Paste the Bittrex BTC address you copied over into the destination address:
Step 6: You will now wait until at least 2 confirmations are complete. Once they are it will show up in the wallet section of Bittrex.
On the wallet’s page, you should be able to see your deposit pending (within 10 minutes). An example of Ethereum pending is below.
7. Bittrex: Purchasing another cryptocurrency with Bitcoin or Ethereum
Once your Bitcoin or Ethereum has been confirmed and in your account balance, you are ready to buy! Cryptocompare has done a great job providing an article on how to buy NEO, so we will use that example here.
Step 1: If you aren’t on your account balance page, make sure you go back to it by clicking Wallets on the navigation bar.
Step 2: On the top right search, type in NEO and click on the Symbol. This will bring you to a trading page. Make sure you click the correct symbol.
Once you click on the symbol, you will see a page that looks like this:
This page can be a little confusing, but don’t worry. The section we care about is actually below. If you scroll down, you will see this:
Step 3: Scroll down to the bottom and on the right hand side, we will use the “BUY NEO” section. The only sections we will touch is the “Bid” and the “Total”.
In the total section, enter how much Bitcoin you want to trade. It can be in fraction. For example, you can enter 0.1 which equates to (~$1,000) at the time of writing. We know this is annoying to do math to translate it into dollars :(.
In the bid section, where it is the Blue “Price” button with a dropdown, you will see 3 options. Last, Bid, Ask. Without diving too deep into what those means, a simple trick to remember is this: Last = last price someone paid. This is normally the fastest way to buy something. Bid = the price people want to buy it for. Of the 3, this is the “slowest”, but normally the best deal (without manually entering a number). Ask = the price people want to sell it for. This is also a fast way to buy something and normally a little safer than Last.
After you select a total and a bid, it should fill out all the other information for you (i.e NEO units). The page will look like this (Note: In the picture, the person clicked “Max” for units because he wanted to spend all the BTC he had. You could also go this route instead of using the total).
All you need to do is click Buy to place an order. Note: This isn’t guaranteed to buy the NEO, as someone has to sell it. It normally happens fast if you selected one of the 3 options and not manually entered in the price though.
Step 4: You will see a confirmation page that looks something like this and you need to click Confirm:
Once the order gets filled, you can see your account balance has NEO in it now (as long as you go back to your wallets section)!
Congrats! You made it through!
If you are like us, this was insanely complicated. More complicated than it should be. Don’t worry, over the next few months there will be better solutions out there!