How to Buy Dogecoin in Colombia - Beginner's Guide

How to Buy Dogecoin With the Best Broker in Colombia

The popularity of crypto trading in Colombia and around the world has led to an explosion of online cryptocurrency broker platforms. Many of the best ones have been in operation for several years now and have cultivated a reputation for providing a quality service to traders. Read below for more information on opening an account with a broker platform in Colombia.

1. Register with a Reputable Broker

The first step is opening and registering an account with a reputable broker. Open an account only after comparing features, costs, and security offered by brokers. The sign-up process is fairly standard and generally requires a name, email address, location, and phone number.

2. Verify your Identity (KYC Process)

Part of the sign-up process is completing the Know Your Customer (KYC) process. KYC verification is a requirement by all reputable broker platforms as a measure against fraud, theft, and other criminal activity. It might seem like a pain, but it’s a necessary step to protect all users as well as the platform itself.

The KYC process generally involves providing additional documents to prove your identity and residence. Acceptable documents include government-issued IDs such as passports, driver’s licenses, or national IDs. A recent utility bill or bank statement that contains your address should be sufficient for proof of residence.

3. Deposit Funds with your Preferred Payment Method

Broker platforms tend to have multiple payment methods available for depositing funds. These include direct bank transfers, debit or credit cards, and crypto transfers. Some platforms may also accept third-party payment services like PayPal or Skrill. Each option has associated fees, so make sure to compare the available options before you commit to using one.

Unless you’re using a platform that’s specifically geared toward users in Latin America and accepts Colombian pesos (COP) as a trading pair, your deposit may need to be converted into U.S. dollars, Euros, or British pounds before your account is funded. You should factor in the exchange rate for the day if your funding source is in pesos.

4. Open a Position to Long/Short Dogecoin

Cryptocurrency traders can either open a short or long position when investing in Dogecoin. Broadly speaking, taking a short position involves betting on the market price of DOGE declining without actually buying any coins. A short position is typically opened using financial derivatives like a CFD (Contract for Difference). The contract is pegged to the price of the underlying asset and is paid for using fiat money. The contract holder turns a profit if their prediction turns out to be correct.

Conversely, a long position involves buying and holding Dogecoin with the expectation that its value will increase in the future. Investors who take a long position hold on to their assets for weeks, months, or even years before selling their assets for a profit.

For example, if you want to open a long position without leverage on eToro, you’ll first need to buy DOGE from the platform. Once you’ve funded your account with one of the accepted fiat currencies (USD, EUR, GBP, or AUD), you can buy DOGE and then open a position. Since you own the DOGE you buy, you’re free to close your position at any time once your desired price is reached.

Traders can pick a variety of order types from broker platforms. For instance, a market order tells the broker to immediately initiate a trade using the current market rate. Alternatively, a limit order tells the broker to initiate the trade when a target price you specify is reached. Other popular order types include stop-loss orders, trailing stop-loss orders, immediate-or-cancel orders, and all-or-none orders.

5. Close your position

Knowing when to close your position is a valuable skill for sound risk management. Traders generally close a position when they either hit their profit target or stop levels and start running a loss. The good news is that broker platforms have settings to automatically close trade positions based on predefined criteria.

Sometimes it may be necessary to close your position early if the price of Dogecoin unexpectedly dips. In such cases, setting up a stop-loss point can help to prevent excessive losses. On the other hand, sometimes a position might reach a predetermined profit level sooner than expected. By specifying a take-profit point, you won’t have to diligently track the price of DOGE throughout the day or second-guess yourself about how high the price can go.

How to Buy Dogecoin With the Best Exchange in Colombia

Cryptocurrency exchanges are another option for purchasing Dogecoin in Colombia. Unlike brokers, exchange platforms don’t typically support trading, but they allow users to buy Dogecoin using a variety of fiat currencies. There are hundreds of crypto exchanges. Most of these platforms only support trading pairs with major fiat currencies such as the U.S. dollar, British pound, Euro, and Australian dollar. If you want to use Colombian pesos to deposit funds, your money must be converted into an accepted currency first.

A few exchanges specifically target users in Latin America and accept Colombian pesos. However, these exchanges require users to certify their Colombian citizenship and/or residence. Users must also have a bank account in Colombia for transfers. This section describes the steps to buy Dogecoin in Colombia using a cryptocurrency exchange.

1. Set up a Wallet

It is considered good practice to set up a secure cryptocurrency wallet that you have complete control over before purchasing any DOGE. There are three main types of crypto wallets:

Web wallets: These are browser wallets that are baked into exchange platforms. They are convenient, accessible, and easy to use. However, they are not a great option for long-term storage because they offer “hot” (i.e. online) storage. Coins stored in an online environment are susceptible to theft and hacks.

Software wallets: These are desktop programs and smartphone apps specifically designed to store crypto assets. They are more secure than web wallets because of the advanced security features built into smartphones, laptops, and other devices.

Hardware wallets: These are portable physical devices that typically look like a USB flash drive. They offer the highest level of security out of all wallet options because they store assets in an offline environment. Hardware wallets are highly recommended for long-term storage.

2. Choose and Join an Exchange

Choosing the right exchange platform for your needs will require research into factors like security, fees and commissions, and available fiat money options. While exchanges may look similar on the surface, they all have different features under the hood. It’s a good idea to compare various platforms to find the one that offers you the best deal.

Consider the COP/USD exchange rate. A majority of exchanges only accept popular global currencies like U.S. dollars or Euros as a fiat option against DOGE, so Colombian users may need to convert their pesos into an accepted currency before they can buy Dogecoin.

You should also only deal with exchanges that follow KYC rules because those platforms are generally safer. By complying with KYC/AML rules, a platform indicates that it takes user security and safety seriously. Users should not compromise on regulatory compliance.

3. Choose Your Payment Methods

Standard payment methods offered by exchange platforms include credit/debit cards, bank transfers, and third-party payment services like PayPal or Skrill. Bank transfers are generally the cheapest option in terms of fees, but you should factor in the fees for converting pesos into USD if you’re using a local bank account.

Credit or debit cards are another convenient option, but the fees can be pretty high—especially for credit card payments. Some credit card companies may also block cryptocurrency transactions for security purposes, so check with your bank card issuer before using your card.

Many exchanges have integrated third-party payment services like PayPal, Skrill, or Payoneer as an option for buying Dogecoin. These services are secure and easy to use, but they may have platform-specific transaction fees. You also have to factor in the COP/USD conversion fee if you’re transferring funds from a local bank account to your PayPal or Skrill account.

4. Place an Order to Buy DOGE

Once you’ve funded your exchange account, you can now place an order to buy Dogecoin. The order process is generally the same on all exchange platforms. You simply have to choose a DOGE/USD pair from the order book, enter the amount you want to buy, and then click the “BUY” button.

5. Safely Storing Your Dogecoin in a Wallet

If you intend to hold on to your DOGE as a long-term investment, then it’s a good idea to transfer your coins off the exchange wallet to a more secure wallet address. Transferring assets from one wallet to another is a straightforward process that involves clicking on the withdrawal option and entering the address of the Dogecoin wallet where you want to transfer your coins.

Please note that this step is entirely optional and is only recommended for investors who want to hold on to their DOGE for months or years before selling for a profit. If your goal is to simply trade DOGE for short-term profits, then this step isn’t necessary.

What if I want to Buy Dogecoin with Cash in my City in Colombia?

It is possible to buy Dogecoin with cash in Colombia by finding an individual who is willing to sell. These types of cash transactions are unregulated and can be risky—there is no way to guarantee the individual you make a deal with will deliver. It’s a better idea to only buy DOGE via a regulated platform.

The good news is that Colombian investors have multiple regulated options for acquiring DOGE with cash. One such option is cryptocurrency ATMs; Colombia has the highest number of crypto ATMs in Latin America, with 49 ATMs spread throughout the country that accept Colombian pesos for digital assets like Dogecoin, Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and USDT. Even though only a handful supports direct Dogecoin purchases, you can still use the ATMs to buy Bitcoin or another popular cryptocurrency and then trade that for Dogecoin on an exchange platform.

Another option is peer-to-peer crypto trading platforms that connect Colombian buyers and sellers. These platforms provide escrow protection to establish trust and prevent fraud and theft. While it may be tough to find a seller specifically offering DOGE, it is possible to use P2P platforms to acquire Bitcoin or another cryptocurrency with cash and then trade that for DOGE on an exchange platform.

According to last year’s global crypto adoption index by Chainalysis, Colombia was one of the fastest-growing cryptocurrency markets in 2020. In response to the surge in crypto adoption, the Colombian government has passed anti-money laundering (AML) rules and crypto tax guidelines. More regulations may be passed in the future as the government collects more data on crypto use in the country. Regardless of what method you use to buy DOGE, Colombian investors should make sure to follow the law.

3 Tips to Buy Dogecoin

Now that we’ve covered everything you need to know to buy Dogecoin using brokers and exchanges, here are a few tips that you should consider before you make your first purchase.

1. Choose the Right Time and Do Your Own Research

We can’t understate the importance of doing your own research to learn about how Dogecoin works and its future potential in the market. Dogecoin has previously seen dramatic growth, but there are no guarantees about what the future holds for the meme coin. Taking the time to look at its historic price cycles can help you determine when to open and close your trade positions.

2. Comparing Costs to Buy Dogecoin

There is an abundance of crypto exchanges and brokers, all with different fees and commissions for DOGE purchases. Compare the costs of a few platforms before you select one to buy Dogecoin. Crypto purchases have many fees that might seem small at a glance but could end up eating into your profits. Consider deposit/withdrawal fees, transaction fees, and the exchange rate if you’re using pesos.

3. Safety and Security

Safety and security is the final consideration when choosing a platform. Make sure the platform you use takes reasonable security measures to protect user assets such as two-factor authentication, private key encryption, and encrypted network traffic. Use whatever security features are available on your user profile to further secure your identity and assets.

Can I Buy Dogecoin with Colombian Pesos?

The majority of broker and exchange platforms only accept a handful of global fiat currencies such as U.S. dollars and British pounds. If your funding source is in Colombian pesos, then your money will have to be converted into an accepted fiat currency before you can use a platform to buy DOGE. Platforms typically use the exchange rate of the day when making the conversion, but additional fees and commissions may apply.

Other Ways to Buy Dogecoin in Colombia?

As mentioned in previous sections, it is possible to buy Dogecoin using ATMs and P2P platforms in addition to brokers and exchanges. Dogecoin is also a mineable cryptocurrency, so you can join a mining pool and earn block rewards in DOGE. Below are some alternative options for obtaining DOGE in Colombia.

Use a Dogecoin ATM to Buy DOGE: Only two crypto ATMs in Colombia offer Dogecoin purchases, and they’re both in Bogotá. If you’re in Medellin, Bucaramanga, or Cali, then you could use one of the Bitcoin ATMs in those cities to buy BTC using pesos and then trade it for Dogecoin on an exchange or broker platform. Bitcoin is the most popular cryptocurrency in the world, so finding a BTC/DOGE trading pair is pretty straightforward.

Other Ways to Get Dogecoin: Dogecoin is a mineable cryptocurrency that uses a proof-of-work hashing algorithm. Like Bitcoin, miners use their computational resources to secure the network and confirm transactions in exchange for block rewards. Unlike Bitcoin, Dogecoin uses the Scrypt algorithm, which consumes significantly less electricity, and is more accessible for users without specialised mining hardware.  The Dogecoin network pays out 10,000 DOGE as a block reward to miners for every block that is confirmed, so it’s a good way to earn DOGE without buying it.

Dogecoin’s price reached historic highs in 2021, but it’s still a meme coin that was launched as a parody in 2013. It’s a high-risk investment that has the potential to shoot to the moon. However, like any crypto investment, investors should consider how much risk they’re willing to take before buying.