How to Buy Bitcoin (BTC)

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Bitcoin (BTC) has indeed experienced remarkable growth, soaring from around $500 in May 2016 to approximately $60,000 in August 2024. This represents a staggering increase of about 11,000%. This surge in value has captured the attention of investors and the public alike, as cryptocurrency and blockchain technology continue to integrate into everyday life. With increased institutional adoption, new spot ETFs and strong retail activity, Bitcoin reached a new all-time high (ATH) in March 2024. Many analysts are optimistic about Bitcoin's future potential, predicting that its price could go as high as $1.5 million by 2030. However, it's essential to be aware that investing in Bitcoin carries significant risks; its volatile nature has led to dramatic price swings, including substantial declines that can occur unexpectedly. Therefore, while the potential for high rewards is enticing, prospective investors must carefully consider these risks before diving into the cryptocurrency market.

How to Buy Bitcoin: Different Ways to Invest in Bitcoin

Whether you're looking to invest a modest amount or dive into the deep end with significant capital, understanding the different avenues for purchasing Bitcoin is crucial. It's not just about knowing where to buy; it's also about ensuring that you do so safely and effectively. Here are the various methods for buying Bitcoin,

Buying Bitcoin Through a Cryptocurrency Exchange

Follow these step-by-step instructions to buy Bitcoin through a cryptocurrency exchange. Make sure to choose a reputable platform for your transactions. Popular options include Coinbase, eToro, Gemini, Kraken and Crypto.com.

1. Open an Account

Once you've selected a trading platform, visit their website or download their app, and click on the "Sign Up" or "Register" button. You can use an email or phone number to create an account. Additionally, you will likely have to verify your account according to know-your-customer (KYC) laws with documentation like a driver’s license or passport. After completing the necessary identity verification steps, you may need to enable two-factor authentication (2FA) to enhance your account's security.

2. Fund Your Account

With a verified account, the next step is to fund your account through a wire transfer or ACH transfer. For a wire transfer, you transfer money directly from your bank account to the account. To complete a wire transfer, you can enter your account information and enter the amount to transfer. Most banks charge fees.

For an ACH transfer, you can use a third-party application to help transfer the funds, which is usually slower (2-3 business days) but can be cheaper. One of the more prominent ACH transfer companies is Plaid. It allows you to securely log in to your bank account on the brokerage and transfer the funds.

You can buy Bitcoin with a credit card or on personal payment apps.

3. Purchase Bitcoin (BTC)

Now that you have a funded and verified account, most of the heavy lifting is over with. The last step is to place a buy order for Bitcoin. Navigate to your portfolio and use the search feature to find Bitcoin (BTC). Once on the Bitcoin page, enter the amount you would like to buy. From there, you can click to execute the trade. The Bitcoin should show up in your portfolio along with a confirmation email. 

Buying Bitcoin Using a Brokerage

You can also purchase BTC through an online crypto brokerage. These platforms facilitate the buying and selling of Bitcoin. Robinhood was the first major investment broker to provide access to Bitcoin. Its service, Robinhood Crypto, is available in most U.S. states, though some restrictions apply. Like its stock-trading platform, Robinhood does not charge fees for Bitcoin trades. Other online brokers that offer access to Bitcoin and other cryptocurrencies include Webull and TradeStation.

Opening a brokerage account is usually straightforward. Download the app or visit the website, then select "Sign Up." Provide personal information, verify your identity, and enter additional required details. After account creation, fund your account via available payment methods in the platforms. Once funded, you can now start trading cryptocurrency. Search for Bitcoin (BTC) and enter the amount you want to purchase, then place a buy order.

Buying Bitcoin With a Credit Card

Another way to buy Bitcoin is with a credit card to escape some of the hassles of creating and verifying an account, as well as access to Bitcoin without having to possess the necessary cash. 

To buy Bitcoin with a credit card, you can navigate to one of the sites that offer the service, such as Paybis, Coinmama and CEX.IO. On these sites, you can choose from Apple Pay, Google Pay, debit cards and others, or you can use any of the major credit card companies, such as Visa, Mastercard, Discover and American Express.

Investors need to be aware that certain funding options, such as credit card, may incur higher transaction fees. It's essential to consider these fees when selecting a platform. Careful planning can help optimize investment costs. Always review the fee structure before proceeding.

Buying Bitcoin on PayPal

Another way to get easy access to Bitcoin is through the PayPal app. The app supports numerous crypto offerings and allows you to pay for products and services with crypto. 

To buy Bitcoin on PayPal, create and fund an account, which is similar to the steps for a brokerage account. From there, set up a PayPal cash account and navigate to the crypto page on PayPal to execute your trade. 

Buying Bitcoin Using Other Peer-to-Peer Payment Apps

Payment services such as CashApp and Venmo also allow users interact with cryptocurrencies by integrating Bitcoin purchasing, storing, sending, and selling capabilities directly through their familiar interfaces. This convenience allows users who may be hesitant or unfamiliar with traditional cryptocurrency exchanges to easily engage with Bitcoin through platforms they already trust and use for daily transactions. By simplifying the process of acquiring and managing Bitcoin, these services lower the barriers to entry for new users, encouraging broader participation in the cryptocurrency market. Furthermore, the seamless integration of Bitcoin transactions within these apps caters to the growing demand for digital currencies, making it more accessible to a wider audience.

Buying Bitcoin Using Bitcoin ATMs

A Bitcoin ATM functions much like a traditional ATM but is specifically designed for cryptocurrency transactions. Users can deposit cash into the machine, which then converts it into Bitcoin and transfers the equivalent amount into a user-specified wallet address. While Bitcoin ATMs are not as ubiquitous as their conventional counterparts, their presence is steadily increasing in urban areas and tech-savvy regions, reflecting a growing interest in cryptocurrency. These machines typically offer a straightforward interface, enabling both newcomers and seasoned investors to easily buy Bitcoin, thus contributing to the broader adoption of digital currencies. As the landscape for cryptocurrency continues to evolve, the expansion of Bitcoin ATMs is a significant trend that underscores the increasing integration of digital assets into everyday financial transactions.

Buying Bitcoin Through Spot ETFs

The approval of over 10 spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) in early 2024 marks a significant milestone in the financial landscape, making Bitcoin more accessible to a broader range of investors through stock exchanges worldwide. While these ETFs do not grant direct ownership of Bitcoin, they allow investors to gain exposure to the cryptocurrency's price movements without the need to navigate the complexities of cryptocurrency exchanges or wallets. This development can attract traditional investors who may have hesitated to enter the volatile crypto market, potentially increasing overall market liquidity and legitimizing Bitcoin as an asset class. Additionally, the existence of these ETFs could have implications for Bitcoin's price stability and long-term growth as institutional interest continues to rise.

How to Store Bitcoin Safely

Bitcoin wallets differ from crypto exchanges in that they function as a decentralized place to store crypto instead of trading it. You can choose from multiple forms of virtual wallets. While having a cryptocurrency wallet is not a necessity to purchase BTC, it can increase the security of your assets.

Best Hardware Wallet: Ledger

Ledger is a hardware wallet that is easy to use and supports the sending and receiving of many cryptocurrencies. Once you have purchased a Ledger hardware wallet, you download its software onto your computer and create an account. You’ll be assigned a wallet address (typically a long string of letters and numbers), and then you can send and receive crypto through the wallet. Hardware wallets offer an extra level of security as opposed to software wallets, but they cost money while software wallets are typically free. 

Best Software Wallet: ZenGo

ZenGo is a digital wallet that allows you to store, send and buy cryptocurrencies. When you open a ZenGo account, you will be assigned an Ethereum wallet address, but you can add Bitcoin via the wallet’s interface. The platform is secure, using two-factor authentication to prevent hacks. ZenGo is a free software wallet that supports hundreds of tokens.

Buying Bitcoin Has Never Been Easier

For a long time, it was difficult for most people to purchase Bitcoin because of the technical knowledge required. As Bitcoin inches toward being more mainstream, it has become more available. You can purchase Bitcoin through exchanges and payment apps, with credit cards and by using ATMs. So, all you have to do is pick which option is right for you and start buying today.

Frequently Asked Questions