As the largest cryptocurrency in the world, Bitcoin has gained huge popularity in recent years. If you're from the United States, here are the easiest ways to buy Bitcoin.
Buying Bitcoin sounds like a great investment these days. But what many people forget is the fact that it should be done with precaution. While it can be highly profitable, investing in any cryptocurrency is also very risky because it's still subject to much more volatility than many other tradable assets such as stocks, bonds, forex, and others. That is why expert traders generally recommend not invest more than 10% of your portfolio in risky assets like Bitcoin.
See Also: What is Bitcoin and Why Should You Care?
If you're interested and you want to keep going even after knowing the risks, you can start with buying the coins, which is actually quite simple, similar to purchasing shares.
Buying Bitcoin is getting even easier nowadays, as the credibility of exchanges and wallets is also increasing. A crypto exchange is a website that allows you to buy or trade cryptocurrencies and some of them also work as crypto wallets that would store the coins for you. In this article, we will provide a complete guide on how to buy Bitcoin in the USA.
Buying Bitcoin: The Step By Step
To buy Bitcoin in the US, you only need to follow these three simple steps:
1. Pick a Bitcoin Wallet
First things first, you'll need to own a digital wallet where you can safely store your crypto coins. Keep in mind that digital wallets are different than regular wallets because they don't really hold your coins, but rather only store the private keys that you need to open and access your public Bitcoin address and sign transactions.
It's important to acknowledge that there are several types of wallets to choose from, such as:
- Hardware wallets like Ledger Nano S and TREZOR, which can provide offline storage for your private keys.
- Desktop wallets like Electrum and Exodus, which you can download straight from your computer to store your private keys on the hard drive.
- Mobile wallets like Jaxx and Coinomi, which allow you to access Bitcoins from your mobile devices.
- Web wallets like Blockchain Wallet and GreenAddress, which give you easy online access to your Bitcoins.
- Paper wallets, which let you print out your Bitcoin public and private keys and use this piece of paper as the wallet.
2. Choose a Bitcoin Exchange
After finding a Bitcoin wallet, the next step is to decide how and where you're going to buy the coins. There are loads of options to choose from, which can be categorized into three main groups:
- Bitcoin Brokers, such as Coinbase and Changelly, can provide arguably the easiest and fastest way to buy Bitcoin. They allow you to pay using fiat currency like USD. Brokers usually offer user-friendly platforms where you can buy coins using common methods such as using credit cards and bank transfers. The obvious downside would be that brokers often charge relatively higher fees than other options.
- Cryptocurrency Trading Platforms, such as Huobi, allow you to buy Bitcoin using other cryptocurrencies. What's great about it is that they tend to charge lower fees than brokers and provide access to a more diverse range of coins. However, some may find this method impractical, especially for beginners, because you'll need to own another crypto first before you can use the platform.
- Peer-to-peer (P2P) Bitcoin Exchanges, such as Local Bitcoins and Paxful, eliminates the use of third-party and allows users to trade directly with one another. In this case, the seller is free to set the price that they want as well as the payment method, so the transaction is private and secure. However, as a buyer, it's possible to get a higher price here than the market exchange rate.
See also: List of Cryptocurrency Exchanges
3. Buy Bitcoin
The final step is to order Bitcoin through your chosen platform. For first-timers, using Bitcoin brokers because is highly recommended because it is the easiest and most convenient among others.
No matter what type of exchange you choose, typically you will have to sign up and open an account first. Depending on the requirements of each exchange, you will need to enter personal data such as email address, full name, contact information, and proof of ID before you're allowed to use the account. Once your account is verified, you can start buying Bitcoins.
Simply enter the amount of BTC you wish to purchase, choose the payment method, check the attached fees, and finalize the order. Keep in mind that the exact steps that you'll need to follow may vary on each exchange so make sure to check and read the details and step-by-step tutorial on the official website.
Best Places to Buy Bitcoin in the USA
The sheer amount of platforms to choose from can be a bit overwhelming, making it hard to choose the best one. Here's a list of the most crucial factors to consider before picking an exchange:
- Where the exchange is based and how it is regulated. While the regulatory environment in the US is getting stricter and better at protecting the customers, the same can't be said to all overseas-based exchanges. For this reason, every trader should do thorough research before registering. Check where the exchange is based, where it is regulated, and whether the exchange complies with the rules or not.
- Security. Check the security measures that the exchange offers. Do they use several protection layers such as 2-factor authentication and PGP encrypted emails? Has the server been hacked or linked to suspicious activity?
- Fees and features. Always check the details of how much a transaction will cost in the exchange. It would also be helpful to consider the fee and the features that they offer. Make sure it's affordable for you and worth the money. Keep an eye on hidden fees as well.
- Transaction limits. Is there any minimum or maximum limit on the amount of coins to buy? How much can you withdraw? Make sure to match the limits with your needs and capacity.
- Supported currencies. In this case, big platforms usually offer Bitcoin at the very least, because it is the most common and popular crypto. However, if you want to buy or trade with other coins as well, keep an eye on the platforms that provide various altcoins.
- Customer service. Having good customer service is an important aspect in an exchange, yet often overlooked. If you ever encounter difficulty with a transaction and can't find the answer on the help page, you would have to get in touch with customer support. Therefore, check what methods are available and figure out how they respond to your request.
- Reputation. It would also be helpful to ask other traders for recommendations or check the user reviews of the exchange. It might give you a better idea of what the exchange is like and whether it is worth checking out or not.
Below are 4 examples of Bitcoin exchanges that fit the criteria above:
Coinbase is one of the most popular exchanges in the US at the moment. The exchange is widely known to be beginner-friendly so it provides arguably the easiest way to trade cryptocurrencies. Coinbase allows you to buy Bitcoin using fiat currencies, provides wallets for the customers, has excellent customer support, and provides a simple interface.
Other than that, Coinbase offers a wide range of cryptocurrencies and various payment methods including credit cards, debit cards, and bank transfers. However, pay attention to the fees because they may differ based on your location and payment method.
eToroX is related to eToro, one of the largest trading platforms in the world with a good reputation and track record. The exchange is known to have various interesting features, and the main company has long been known for its reputable copy trading service suitable for beginners and advanced traders.
By making use of the concept of social trading, eToro provides an excellent platform that allows users to discuss trading strategies, browse other traders' portfolios, and copy their trades.
If you're searching for an exchange that offers flexibility and innovations, KuCoin is the answer. Apart from Bitcoin and Ethereum, KuCoin offers hundreds of other cryptos to choose from. Since its first launch, KuCoin is known as one of the earliest exchanges that offer exciting new projects and list various new altcoins even before they become popular.
Kraken is another well-known exchange in the US, which focuses to help maximize accessibility and liquidity. Some of the features are trading fees ranging from 0-0.26%, reduced maker fees, volume-based fee tiers, margin trading, dark pools, OTC desk, and many more.
Other Ways to Get Bitcoins
Other than buying it, you can also get your hands on Bitcoin by using these methods:
- Bitcoin mining. This is quite a popular way to earn cryptocurrency these days. However, not everyone is capable to do it because you'll need to own an advanced computer and the process is pretty complex for beginners.
- Charge Bitcoin for goods and services. If you own a business, you can request or allow buyers or customers to pay with Bitcoin instead of the regular fiat currency.
- Earn free Bitcoin. This method may take more time, but it's possible to find legitimate ways to earn Bitcoin for free. Some of the options are through online games and Bitcoin faucets.
See Also: Which Mining Pool is Most Profitable?
Buying Bitcoin OTC
If you're planning to buy Bitcoin in a large amount, let's say more than $50,000, we wouldn't suggest buying at the regular and traditional crypto exchange. The main reason is that your transaction will be exposed to large slippage, which can affect your overall trading cost by a mile. There's also the risk of hacking and theft. Instead, it would be wise to pick over-the-counter (OTC) brokers because they can offer better prices, higher transaction limits, and faster processing times for large-volume traders.
In conclusion, there are several steps that you need to follow when it comes to buying Bitcoin. The most important part is that you must choose how and where you're going to buy the coin. Make sure that the platform is safe, well-regulated, reliable, and affordable. It's best to do some research and compare the available options so you can weigh the pros and cons of each one.
Also, keep in mind that Bitcoin is an incredibly speculative and volatile asset. Trading Bitcoin can be pretty risky, so make sure you're aware of the risks before you jump in.