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Bitcoin is undoubtedly the king of the cryptocurrency industry and the dominant asset by market capitalization.
With several leading figures predicting that the price of bitcoin will exceed $100,000 by the end of the year, investors and institutions are turning their attention back to buying and holding a limited supply of cryptocurrency over the long term.
For those who haven’t bought bitcoin yet, this guide will explain how to buy bitcoin and compare the best places to buy bitcoin so you can make an informed decision.
Is it worth investing in bitcoin
Investors who understand the fundamental aspects of limited supply and increasing demand are aware of the transition from digital currency to the value of an investment asset.
Bitcoin is currently the 9th largest investment asset with a total market capitalization of $835.78 billion at the time of writing.
According to statistics, there are currently about 81 million bitcoin wallets that have been created to buy and store bitcoins.
Given the fixed number of bitcoins and growing interest, the supply and demand equation suggests a favorable outcome in the long run.
How to buy Bitcoin
The easiest and safest way to buy bitcoin is to use exchange and follow these steps:
Compare and choose a cryptocurrency exchange. Find and compare cryptocurrency exchanges that are available in a specific country and support the fiat currency to be converted into BTC.
Each exchange will have different options for depositing money.
Other important considerations for finding the right exchange are deposit, trading and withdrawal fees, account and wallet security, and customer support.
Register an account on the exchange. Create an account on the crypto exchange using a valid email address or cell phone number.
Before depositing fiat currency exchanges undergo a mandatory Know Your Customer (KYC) process, which will need to be completed.
This must comply with international anti-money laundering (AML) and counter-terrorist financing (CFT) requirements.
It is also recommended to activate 2-factor authentication (2FA) for additional account security.
Choose a payment option that offers the best fees and a reasonable rate of arrival of funds to your exchange wallet. The most common payment methods include wire transfer, bank transfer, debit card, credit card, and PayPal.
Existing crypto-investors can also contribute altcoins or stable coins (such as USD, USDT, or BUSD), which can be converted to bitcoin on the exchange.
Buy Bitcoin. Browse supported assets and select Bitcoin. Use a savings account to select an amount to spend. Complete the transaction by clicking on the “Buy” button. The bitcoin amount will be determined by the selected price and transferred to the user’s BTC wallet.
Where to buy Bitcoin
The best places to buy bitcoin are cryptocurrency exchanges that list bitcoin for purchase using fiat currency (e.g., USD, EUR, GBP) or accept altcoins and stable coins in exchange for BTC.
These platforms are available worldwide, offer a variety of payment methods, have a feature-rich user interface, a responsive mobile app, and provide good value for money.
A step-by-step guide to buying bitcoin
1. Compare and choose a crypto exchange
The first step to buying bitcoin is to decide what type of cryptocurrency services to use. There are several options, which include fiat-to-crypto exchanges, trading platforms, decentralized exchanges, and brokerages to choose from.
Centralized crypto exchanges are the most commonly used and beginner-friendly ones that allow people to buy, store, trade, and sell bitcoin.
Exchanges such as Coinbase, Binance, and Crypto. com offer a wide range of features, products, and services that can be useful after the initial purchase. For example, these particular exchanges allow investors to earn interest on bitcoin to earn passive rewards.
Important aspects to keep in mind when choosing a bitcoin exchange are:
- Supported countries and accepted fiat currencies
- Deposit methods and limits
- All types of commissions (deposit, trade, and withdrawal)
- Ease of use for all levels of experience
- Trading volume and liquidity (minimizing spread and slippage)
- Industry-standard security measures
- Live chat or customer support.
2. Register an account at the exchange
Create an account on the selected cryptocurrency exchange using a valid email address. To buy bitcoin using fiat currency such as USD, GBP, EUR, or AUD, you must go through an identity verification process, which typically requires the following information:
- Full name
- E-mail address
- Identity document
- Proof of address
- A picture of the person.
This information is collected by the exchange in accordance with international Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
Some cryptocurrency platforms only do not require ID verification, but there may be limits on the amount that can be withdrawn per day.
For additional account security, it is also recommended to activate 2-factor authentication, which adds another layer of security for account login and withdrawal requests.
3. Deposit funds
The next step is to deposit or transfer cryptocurrency from another trading platform or wallet. For first-time buyers of cryptocurrency using fiat currency, exchanges provide several options for depositing, including wire transfer, bank transfer, credit/debit cards, and faster payments.
There are usually minimum payment limits and fees for each supported payment method, which can vary depending on where the investor originates. A commonly available method is to purchase bitcoins with a credit card, but the fees are much higher and not recommended.
4. Buy Bitcoin
Once the account is funded, the final step is to find bitcoin in the list of assets and click buy.
Depending on the exchange, the way to buy bitcoin will be a simple order form or using an advanced trading platform with different types of orders.
Using the funds deposited, select the amount you want to spend on bitcoin. The amount of bitcoin to be received will usually be shown during the transaction. Review and complete the transaction, and the bitcoin amount purchased will go into the user’s wallet almost instantly.
Alternative ways to buy Bitcoin
Buy bitcoin for cash. Exchanging cash for bitcoin with a trusted friend or family member is one of the main ways to own bitcoin.
The advantage of this method is that the buyer does not need to create an account on the cryptocurrency exchange and undergo full identity verification. They will need to store bitcoin on a mobile or hardware wallet.
Use peer-to-peer exchange (P2P). These platforms connect willing buyers and sellers without a central authority or intermediary. These services are based on trust between buyer and seller.
Most P2P exchanges will use an escrow service to ensure that the bitcoin transaction is executed by both parties.
Invest in bitcoin ETFs. Exchange-traded funds (ETFs) allow individuals to invest in and gain access to bitcoin without trading the asset itself.
This form of investing is ideal for traditional investors who don’t have to worry about joining an exchange and holding. They can buy and sell bitcoin just like stocks.
Exchange a gift card for bitcoin. Exchanges will accept payment in various forms, which can include prepaid cards, iTunes gift cards, Amazon, and many others.
These cards can be redeemed on a bitcoin exchange. While the fees may be higher, this is a great way to buy bitcoin using unused Amazon gift cards.
Bitcoin ATMs are becoming increasingly common and allow individuals to receive bitcoin directly through an ATM. This process is similar to using an ATM to withdraw cash. The disadvantage of this method is that the fees are usually quite high and difficult to use without any customer support.
Choosing an exchange to buy Bitcoin
To buy bitcoin safely and securely, it is important to choose a reputable cryptocurrency exchange or platform that complies with local rules and laws.
Here are a few considerations to take into account before buying bitcoin on an exchange:
Trust and regulation
Using a local exchange is a smart decision when buying or selling bitcoin. In order to operate domestically, the exchange will have to comply with government laws and regulations.
Deposit options
The exchange must accept the preferred payment option to deposit the account.
The most common methods are bank transfers, bank transfers, PayPal, credit/debit cards, or a cryptocurrency wallet.
Each option will have different payment fees, minimum and maximum limits, and transfer rates that you should be aware of.
Fees
There are several different fees to be aware of. Depositing funds, such as fiat currencies, usually entails a fee. Depending on the exchange, payment method, and amount, the fee may be a flat fee or a percentage fee.
The other major cost is the trading fee, which can be as high as 2.99% per transaction. Major crypto exchanges are the best choice as they can offer zero commissions for fiat deposits and low trading fees from 0.1%
Secure Wallet
Bitcoin purchases on a centralized exchange will be stored by the platform until they are transferred to a personal wallet.
To minimize the risk of fraudulent account access, exchanges should at least include 2-factor authentication (2FA) for login and withdrawal and use a combination of hot and cold wallets.
Some exchanges even provide insurance for stored bitcoin.
Conclusion
The process of buying bitcoin is becoming increasingly accessible through cryptocurrency exchanges that provide easy-to-use platforms and mobile apps.
While many investors will initially struggle to understand how to buy bitcoin on an exchange and transfer it to a personal wallet, the overall experience will become more streamlined and simplified with mass adoption.
At the time of writing, using an exchange is the best approach to getting bitcoin, which can be done in 4 steps: selecting a reputable bitcoin provider, registering an account, depositing funds, and buying bitcoin.
