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How To Buy Bitcoin

In recent times, many traders and investors are joining the Bitcoin – and crypto – train in a bid to increase their portfolio, thanks to the asset’s meteoric move over the past decade. However, a novice in the cryptocurrency space may find the buying or investment process confusing at first. 

Fortunately, the learning process is pretty short, as you can get the hang of Bitcoin purchasing methods within minutes. So, if you are considering adding Bitcoin to your portfolio, feel free to explore any of the options and processes that we will explain below. 

Buying With Credit Cards on Regulated Crypto Trading Platforms or Exchanges 

Using credit cards to buy Bitcoins from regulated exchanges is one of the safest routes to take while acquiring digital assets. This process is almost similar to purchasing goods on websites like Amazon or Etsy. The buyer will need to input his credit card details on the exchange to authorize the transaction.  

Generally, it is worth noting that purchasing Bitcoins with credit cards comes with certain disadvantages. The first is that some exchanges do not allow users to purchase digital assets using credit cards because of the high risk of fraud and exorbitant transaction fees that they are subjected to. In addition, the exchange may require the buyer to pay processing fees after settling the ones charged by the credit card companies. 

Secondly, credit card issuers count Bitcoin purchases as cash advances, making them charge hefty interest rates on such transactions. For instance, a US-based credit card issuer, Chase, treats the purchasing of digital assets as cash advance transactions. As such, users must pay a 10% transaction fee, coupled with an annual fee of 25%.  

Crypto users can explore an alternate option, which is the Bitcoin Rewards credit card. They have the same functionalities as normal credit cards; however, the payout rewards using Bitcoin. Some notable examples of credit cards with Bitcoin rewards are Gemini, BlockFi, Crypto.com, Visa Card, Venmo, and Brex. 

Before using Bitcoin Rewards credit cards, users must note that these cards may attract steep charges and additional currency conversion costs. 

Buying Via Grayscale Bitcoin Trust 

The Grayscale Bitcoin Trust (GBTC) is a cryptocurrency asset manager that allows investors to buy and sell Bitcoins using their personal brokerage accounts. GBTC also allows investors to trade over the counter, meaning that they can purchase them via numerous discount brokers. 

Trading on Grayscale Investment attracts fees, and trades are often at a premium. This implies that GBTC shares are costlier than Bitcoin, although it maintains a “Bitcoin-only” portfolio. The idea behind this is that some investors don’t mind paying extra fees to purchase Bitcoin on a traditional exchange in a bid to eliminate concerns about storage and wallets. 

Bitcoin ATMs 

how to buy bitcoin
Bitcoin ATMs

These machines operate like physical Bitcoin exchanges as buyers can deposit cash into the machine to purchase Bitcoin. It is then transferred to a secure Bitcoin wallet. Bitcoin ATMs have gained increased popularity over the years due to the high level of convenience that they offer. So, we might see a wider adoption in the near future. 

P2P (Peer-to-Peer) Exchanges 

P2P exchanges operate an open-channel transaction model whereby buyers and sellers have more a direct contact. They operate differently from decentralized exchange services, which connect users anonymously while also handling most parts of the transaction. 

Some notable examples of pure P2P exchanges are Remitano and Local Bitcoin. After registering on the websites, users can post purchase requests, giving detailed information about the suitable price and payment methods. Interested sellers can scroll through the listing and choose a trade partner to do business with.  

These platforms get involved in some trade aspects, including setting up escrow systems for transparency and providing real-time notifications to all trading parties. Although P2P exchanges have flexible policies concerning anonymity, users can leverage these platforms to get the best deals. P2P platforms also provide review and rating systems for users to assess a merchant’s credibility before transacting and give feedback after the transaction. 

Things to Do Before Buying Your Bitcoin 

Every trader or investor needs to know some important things before purchasing Bitcoin. First, he will need a crypto exchange account, personal ID documents, a secure Internet connection, and a reliable payment method. Also, experts recommend that traders and investors should have personal wallets different from their exchange account. Below are the steps to take before buying Bitcoin: 

Choosing an Exchange 

This is the very first step, as most Bitcoin transactions are carried out through exchanges. The recommended practice is to register on exchanges that allow users to withdraw their assets to a personal wallet for safe storage. 

Since individual sovereignty and decentralization are the core ideas behind Bitcoin’s development, some exchanges maintain users’ anonymity, meaning they do not need personal information to register. One major disadvantage is that fraudulent activities are easily conducted on these platforms. Therefore, it is best to choose crypto exchanges that have a KYC policy

Connecting the Exchange Account to a Payment System 

After picking and registering on a suitable exchange, the next step would be to verify the account using personal identification documents. When the exchange completes the verification process, the user will need to connect a reliable payment option to his/her account.  

Most exchanges allow their users to connect their credit or debit cards, whereas others give room for adding bank accounts directly. Before choosing a payment option, it is worth noting that exchanges charge varying transaction fees. Therefore, you need to research properly before making a choice. 

Placing an Order and Storing Tokens 

When the first two steps are completed, the user can buy Bitcoin without any hassles. The storage of digital assets is an important topic in the crypto industry, as improper storage puts traders at the risk of losing their entire portfolio. Using a secure hot or cold wallet will ensure that users’ funds remain safe. 

Final Note 

The Bitcoin purchasing methods mentioned above have been in use for years, attracting minimal risks. As a newbie investor, it is recommended that you buy a small amount of Bitcoin until you understand how the market works. However, veterans can hold as many coins as they want as long as they practice proper risk management. 

What is Bitcoin?

Contact Data

Name: Chris Jones

Organization: UrbanLink Media

Phone: 1-855-730-5465

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