How to Buy Bitcoin? A Trader Beginners Guide 2024
Want to jump straight to the answer? The best cryptocurrency brokers for traders are Coinbase and Gemini
The #1 Forex Trading Course is Asia Forex Mentor
When Bitcoin was launched in 2009, the main goal was to offer people a truly decentralized digital currency that is beyond the control of anyone. The coin was launched by an anonymous developer called Satoshi Nakamoto. Even though there was a lot of skepticism about its use and uptake, over the last ten years Bitcoin has grown massively.
Today, Bitcoin is not only the biggest cryptocurrency but it has also become a viable investment vehicle in most investment accounts. Well, if you want to buy and sell Bitcoin as part of your investment strategy, then this post is just perfect for you. We will give you all the details you need to buy or sell bitcoins whenever you want.
But before we go on, it is important to note that the opinions expressed in this editorial content are for educational purposes only. You are advised by our editorial team to always exercise due diligence before investing in bitcoin and any other popular cryptocurrency. Please note that you are ultimately responsible for your financial decisions.
How to Buy Bitcoin: What Is a Bitcoin (BTC)?
Before we get to details about how you can trade bitcoin, it is important to just recap what this coin is all about. Well, in simple terms, Bitcoin is one of the main digital currencies in the world. The coin is regarded as an open-source peer-to-peer payment ecosystem that is fully decentralized.
Like other digital currencies, Bitcoin uses cryptographic proof to validate transactions through a large network of computers called the blockchain. As of now, the total lifetime supply of Bitcoin or BTC is limited to 21 million coins. According to current estimates, the 21 million coins will be all mined by 2140.
So, how do you buy bitcoins? Actually, there is a section below that gives you a detailed step-by-step guide. But in essence, you will need some fiat currency, a cryptocurrency wallet, and an account in a bitcoin exchange to execute your trade. There is also no limit as to how much bitcoin you can own. It all depends on how much money you are willing to put up for your cryptocurrency investments.
Best Bitcoin Exchanges?
As noted above, bitcoin is purchased through cryptocurrency exchanges. Crypto exchanges are basically online platforms where people can exchange digital assets for fiat currency or with other crypto coins. While there are several options, not all exchanges will be ideal for you. Nonetheless, here are our top 5 picks:
Gemini
Gemini is a New York-based cryptocurrency exchange that allows you to buy over 50 digital coins, including large-cap ones like Bitcoin and Ether. The exchange is known for its superior trading technology, state-of-the-art security, and excellent customer support. You will also pay a small transaction fee here.
Gemini also comes with its own cryptocurrency wallets that can be fully secured with a private key. You also get other financial products including a Geminin credit card that lets you receive compensation every time you do credit card purchases using crypto.
The platform also comes with a series of interactive tools that help you gauge the past performance of bitcoin and other currencies before you buy. The biggest downside is that the exchange is not available globally. In certain countries, it may be hard to get an exchange account with this provider.
Coinbase
Coinbase is by far one of the largest platforms to buy crypto. It offers bitcoin and hundreds of other cryptocurrencies as well. Additionally, Coinbase is also regarded as one of the easiest places to buy bitcoin. In fact, it takes less than a minute to open an account, choose a payment method, and buy cryptocurrency.
Coinbase also offers its own highly secured bitcoin wallet where you can safely store your coins. Unlike most top exchanges, especially those based in the US, the KYC requirements at Coinbase are a bit flexible. Besides, Coinbase is global and as such, it is open to so many investors who want to start buying and selling bitcoin.
However, Coinbase needs to be open about fees. Although the cryptocurrency exchange does well to offer competitive fees, its fee structure is somewhat hard to understand for the average user. The exchange should also do better in customer support.
Binance
Binance is also a huge cryptocurrency exchange designed for both beginner and advanced traders. In addition to the main crypto assets like bitcoin, Binance also offers a wide variety of altcoins for folks who want to diversify their crypto investments. This exchange also has additional crypto-related derivatives including futures and others.
You will also get superior investing tools, including advanced analytics, with Binance. However, one of the key selling points for the exchange is the amazingly low fees. Whether you are paying a flat fee for a transaction or paying fees based on trade volume, Binance has some of the lowest trading fees in the crypto market.
This exchange also offers better security for its users and you also get a reliable hot wallet to ensure safe storage of your precious assets. Despite this, according to the Washington Post, Binance has had some regulatory issues in the US and other countries. But it is still one of the best places to buy bitcoin.
Crypto.com
Crypto.com is one of the older exchanges where you can buy bitcoin. The platform is known for its advanced security, something that should give you peace of mind when purchasing bitcoin and other cryptocurrencies here.
Crypto.com has also launched its own visa credit card as a payment option for folks who want to shop with crypto. You can earn up to 8% cashback with this card. As of now, this exchange has over 200 cryptocurrencies on offer, and recently, it also launched an NFT marketplace where users can buy and sell these non-fungible tokens.
You will also get very low trading fees once you open an account with Crypto.com. However, this provider has very strict KYC requirements. And being a purely US-based exchange, its service may not be available for everyone who wants to start investing in bitcoin.
Interactive Brokers
Unlike most exchanges that focus purely on crypto, Interactive Brokers is a full-service firm that offers brokerage services on a wide range of assets. Whether you want to buy particular stocks or simply buy bitcoin, this provider will be ideal for you. However, since Interactive Brokers is a traditional broker, it will need some personal information from you before you get an account here.
Also, you can only deposit fiat currencies on your trading account. Most people do it through bank transfers but there is an option to use a debit card too. You will also notice that Interactive Brokers only specializes in established cryptocurrencies. In case you just want to buy bitcoin and nothing else, it will be a good place to start.
But for folks who want to diversify their crypto assets, it would be ideal to work with brokers that have a better variety of cryptocurrencies. Nonetheless, this broker also offers low fees, fast trade execution, advanced analytic tools, and excellent customer support.
Buying Bitcoin Pros and Cons
There are a few pros and cons to be aware of should you decide to buy bitcoin today. Here they are:
Pros
- Bitcoin has seen a sharp increase in value over the last few years
- The cryptocurrency has become too big to be controlled by governments
- Bitcoin is a large-cap cryptocurrency that offers excellent liquidity compared to other crypto assets
- You can get bitcoin in all the major exchanges in the world
- Bitcoin is also the gold standard in the crypto world
Cons
- The coins are associated with massive price volatility
- Certain exchanges may charge a lot of money in transaction fees
- There is always a risk of government regulation in the future
Reason to Purchase Bitcoin?
Different people have different motivations why they invest in bitcoin. While some do it as a long-term investment because they believe in the future of cryptocurrency, others engage in short-term speculative trades. Nonetheless, there are three main reasons why investing in bitcoin makes a lot of sense. And you don’t even need investment advice or Robo advisors to understand these fundamental reasons.
First, Bitcoin was the first crypto and over the years, it has grown massively. It is relatively stable and has some legitimacy around it. Secondly, Bitcoin is the gold standard of the crypto world. Think of its as the US dollar of the cryptocurrency industry. Finally, bitcoin has just become too big to ignore.
Even if you invest your money in other assets, you cannot afford to miss out on the growth that bitcoin promises in the long term. But there are also other factors to consider before buying bitcoin. How much are you willing to spend for example? How well do you know the crypto space? etc.
How to Buy Bitcoin?
Buying bitcoin is not as hard as you think. In fact, there are three simple steps you can follow to invest in bitcoin. Here they are:
Open an online account
As noted by our editorial team, you will need to find a good exchange before you invest in bitcoin. The exchanges we have listed above are some of the leading on the planet. Therefore, open an account in any of them. You may also be required to link your bank account or debit card in order to pay for your deposits. Some personal info, including verification documents, will also be required. In most cases, it takes at most five minutes to open your account in these exchanges.
Download a crypto wallet
Once you have opened your trading account, it's time to download a cryptocurrency wallet. After all, your digital assets will need a secure place to store. Most exchanges do offer their own wallets with secure private keys. However, if you want that extra level of security, you can buy a hardware wallet for cold storage.
Hardware wallets cannot be hacked but they are mostly designed for people who don’t see themselves trading bitcoin regularly. There are several comparison service providers online these days that compare various wallets. Read what they have published and see if you get some ideas on which wallets to buy.
Make your purchase
The final step is to buy bitcoin. This is done in two ways. First, you can use the fiat money deposited from your bank account to purchase bitcoin. Here, you will pay the current market price of the coin. Once the transaction is completed, you can now transfer the digital currency to your crypto wallet.
It is also possible to deposit crypto into your wallet and swap it with other cryptos. For example, someone can deposit Ether ETH into their wallet and then use an exchange to exchange it or swap with bitcoin. But in most cases, investing using fiat money costs less compared to swaps.
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Conclusion: Is Buying Bitcoin a Good Investment?
Well, in general, bitcoin is seen as a very risky investment vehicle. Although investors who started investing in these coins early have made good returns, the price swings associated with bitcoin can be very off-putting for most folks. Despite this, bitcoin has grown and is today the biggest, most recognizable crypto in the world.
It has earned its legitimacy too and besides, there is a huge payment ecosystem that has developed around bitcoin. This means that it is now too big to fail, making it an ideal investment option for anyone.
Bitcoin is also the gold standard of digital currencies. In essence, as the crypto market grows in the coming years, it is likely that bitcoin will also grow with it. However, make sure you understand how bitcoin works before you start investing. Also, you may need a sizeable amount of money to get started.
Buying Bitcoin FAQs
What is the best way to buy bitcoins?
The best way is through global exchanges. You simply need to open an account, fund it with money from your bank account, and buy the amount of bitcoin you need. This is way easier and will cost you less in fees compared to crypto swaps.
What is the bitcoin cash used for?
Bitcoin Cash is a digital payment currency that was developed as a Bitcoin-related altcoin. It is normally used as a transactional currency to pay for everyday items. Bitcoin cash was developed to address the scalability challenges of Bitcoin.
What is digital currency?
A digital currency is a new type of money that is exchanged, stored, and validated through computer systems. It cannot be touched but it has value. These currencies are seen as integral in the development of cashless societies.
