If you’re looking to make a big bet on the price of bitcoin, or if you’re planning to buy a small amount of cryptocurrency, you have plenty of different ways to get your hands on some bitcoins. You can buy bitcoins directly from brokers or exchanges or indirectly via a bitcoin ATM. You can also get bitcoins through mining or by accepting them as payment for goods and services.
Buying bitcoins directly from a broker or exchange is the easiest way, but you’ll pay a commission. You can opt for an online business like Coinbase, which charges less than 1%. Alternatively, you can meet someone in person and pay less than 1%. The downside is that physical transactions are slow and risky because you’ll give up your cash in person. Many people prefer to use online services where they can transfer funds and securely store their currency at a distance.
Define Bitcoin
The first thing to know about Bitcoin is that it’s not exactly a currency because you can’t hold a Bitcoin in your hand. The second thing is that it’s not exactly a currency—it’s a cryptocurrency, a subset of digital currencies. It’s one of many cryptocurrencies out there. The Bitcoin price is volatile, but it’s not as hard to sell when necessary. Using a bitcoin converter lets you effortlessly convert your Bitcoin to USD and vice versa so that you can plan your investment wisely.
All cryptocurrencies have the same basic features: they are decentralized, meaning there is no central authority or controlling party that issues new coins or tracks transactions. They operate on blockchain technology, a distributed public ledger (a way to organize data in which every person who participates has access to the entire record).
Methods of Buying Bitcoin
There used to be only one way to trade Bitcoin: through the over-the-counter market, at a price determined by the two parties in the transaction. The downside of this approach is that it requires a lot of trusts and a high entry barrier. Now there are several bitcoin exchanges where you can buy directly from your bank account or credit card, which has made trading much more accessible to many users.
Using Financial Tools
Many people feel a sense of trepidation about getting started with cryptocurrency. It is because of their lack of knowledge about investing and trading. Many financial apps, such as PayPal and Venmo, now allow you to trade cryptocurrency.
PayPal, one of the most trusted companies in the world and a familiar staple for online payments, made cryptocurrency trading easy by introducing a new feature. Through PayPal’s existing app, you can buy, sell and trade cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash almost instantly. You won’t pay set-up fees on your first $10,000 worth of trades either—the only costs come from the spread markup that PayPal takes on trades.
Cryptocurrency Exchanges
Crypto exchanges had existed since at least 2010 when Mt. Gox opened its doors. Since then, crypto exchanges have become a much more common way of buying and selling cryptocurrencies. And the ecosystem has grown substantially over time as well—there is no shortage of options for crypto buyers who want to use an exchange to buy their coins.
Investors can buy and sell BTC USDT (Bitcoin to Tether) and several digital currencies in various crypto exchanges.
Brokerage
Robinhood is the first broker that lets you buy and sell Bitcoin without any additional fees. The app has been a huge hit, with more than 3 million users signing up since it launched in January. It’s also a convenient way to trade stocks, allowing customers to purchase stock directly from their smartphone or tablet. You won’t have to worry about paying hidden trading fees, and there are no minimum balances.
ATM For Bitcoin
Bitcoin ATMs are a great way to buy your first bitcoins, provided you live near one and have cash on hand. If you don’t have the time or energy to figure out a Bitcoin exchange, an ATM might be worth your while.
Before you use an ATM for the first time, do your research on fees because they can vary widely. Most ATMs will allow you to buy bitcoins with cash or a debit card. Some machines only accept cash, so if you go in with a card, it may not work. Fees also depend on how much money you’re depositing into your account.
What Do You Need To Buy Bitcoin?
For many online investors, opening a brokerage account is the first step to getting started with stock trading. A traditional brokerage is an institution where you can purchase and sell stocks, exchange-traded funds, options, and other financial instruments. You’ll also need to open a separate account with a crypto exchange if you want to trade in cryptocurrencies.
Opening an account is similar for both institutions: you’ll provide your personal information, including your name and Social Security number, allowing the broker or exchange to verify your identity and keep track of your trades.
You’ll also have to detail how much experience you have trading stocks, how comfortable you are with the volatility in the market, and whether you’re interested in shorting or leveraging stocks when possible.
