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Bitcoin is one of the world’s most popular currencies and is at par with fiat currencies such as the US Dollar, British Pound and Euro. As the first cryptocurrency, Bitcoin led the way to spread decentralised digital currencies from a small niche community into a worldwide phenomenon. When in December 2017, Bitcoin’s price surged to almost $20,000, its legacy was cemented in the belief that crypto would eventually replace traditional currency.
You can invest in Bitcoin on the following CFD trading platforms:
Your capital is at risk
80.5% of retail CFD accounts lose money
If you are new to the cryptocurrency industry, understanding how to buy Bitcoin can seem a little daunting. Whilst there are many ways to buy the world’s first cryptocurrency, you would generally need to follow these steps:
From the humble beginnings of the currency’s white paper, created in 2008 by Satoshi Nakamoto, Bitcoin today is part of a massive, billion-dollar financial industry. As a result, there are numerous ways with which you can obtain Bitcoin.
Before choosing a method to purchase the cryptocurrency, you need to understand what you plan to do with it once you own it. If your goal is to buy some Bitcoin just to own a part of human evolution, then the easiest way is to use reputable cryptocurrency exchanges. There are several exchanges which are suitable for beginners and allow you to instantly own the digital coin in exchange for fiat currencies, such as EUR and USD.
Another popular option is to use P2P trading platforms, such as LocalBitcoins. The platform allows you to choose reputable sellers in your area and negotiate the terms of the sale directly with them. Depending on the seller, you can use PayPal, cash, cheque or even barter, as long as both you and the seller agree. The popularity of P2P trading platforms is that, unlike centralised exchanges, there is no central entity setting purchase prices.
One of the most popular ways to buy Bitcoin using a credit or debit card. Since cards instantly settle payments with the merchant, you instantly receive the cryptocurrency you have purchased. This lack of waiting is not only convenient, but ensures that you are not scammed by fraudsters. Naturally, you can only use credit or debit cards to buy Bitcoin if you are using fiat currencies.
You can easily buy Bitcoin (BTC) with your credit or debit card by opting for one of these brokers:
Most cryptocurrency exchanges and trading platforms which accept fiat to crypto conversions accept payments with cards. While the majority normally accept Visa and MasterCard, you will find a select few which also accept UnionPay, JCB, American Express and others.
PayPal is a popular eWallet provider which is commonly used in online shopping and payments. Fast, convenient, and safe, it is the preferred method of payment for many around the world. Unfortunately, accepting PayPal is expensive. Additionally, several cryptocurrency exchanges do not support this method of payment.
eToro is amongst the few platforms which allows you to buy Bitcoin with PayPal. Providing you access to both the direct asset and alternative financial instruments, the platform offers competitive trading fees. You can also buy Bitcoin with PayPal on eToro via their sophisticated and convenient mobile app. Once purchased, your tokens can be stored in an eToro’s in-built wallet.
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Although making bank transfers is costly and time-consuming, it is still a very popular payment method, especially in countries where cards and eWallets are not easily accessible. You can buy Bitcoin using bank transfers in a variety of cryptocurrency exchanges and trading platforms, including:
Very often, online platforms encourage bank transfers as they do not incur any processing fees themselves. It is normally you, the sender, who must pay such fees. Nevertheless, many high-volume traders and investors opt for bank transfers as platforms normally allow very high maximum deposit limits for those using this payment method.
Whilst it is getting more difficult to buy Bitcoin anonymously there are still a few ways to do this. If you’re located close to a Bitcoin ATM, you can conveniently exchange fiat currency into Bitcoin without needing to provide any identification. These ATMs are spread across the world but can be expensive.
A lower cost option would be to use P2P trading platforms, including LocalBitcoins, to buy Bitcoin directly from other sellers. Alternatively, you can open an account with Changelly, a reputable exchange which requires minimal information and no photo ID. This is one of the best and safest ways to buy Bitcoin anonymously.
are numerous cryptocurrency exchanges and brokers which offer fiat to crypto
conversions funded by card payments and other payment methods. Amongst the top
exchanges you will find the following:
Below are some of the top brokers you should consider:
Using these reputable service providers ensures that you are not defrauded whilst also protecting your details and funds. In addition, many of these exchanges offer different services catering to both novice investors and experienced traders.
Cash remains a popular method of payment, but it can be challenging to buy Bitcoin with cash. The safest way to exchange your cash for Bitcoin is to use a Bitcoin ATM. These machines make the exchange in a matter of seconds and you can check a machine’s reputation online.
An alternative, yet riskier option is to meet a Bitcoin seller online, such as on a forum, and agree to meet in person and make the exchange. With so many fraudsters operating online, this option should only be used as a last resort, and if you do proceed in this way, ensure that the Bitcoin is deposited in your wallet whilst you are still in the presence of the seller.
When deciding which method to use to buy Bitcoin, you need to keep in mind that not all platforms, payment methods or currencies are equally available across the world. In certain countries, cryptocurrency is illegal, so anyone who buys Bitcoin from such countries is breaking the law. Some exchanges are regulated, and their license might restrict the countries in which they can offer their services.
Several exchanges and trading platforms are, for example, not available to some or all US States. For example, Binance, ChangeNow and Bitmex do not offer their exchange services to the country. Similarly, online broker trading platforms which specialise in Bitcoin CFDs do not operate within the US, since trading CFDs is banned. These platforms include:
Platforms, such as eToro, which offer more than just CFD trading, accept US customers from certain States but limit certain platform functionalities. As a result, US investors looking to buy Bitcoin might want to consider alternative cryptocurrency exchanges, such as CEX, Coinbase, Kraken, or Coinmama.
Users in other parts of the world should also check for any restrictions. For example, those residing in Australia would not be able to register an account with IQ Option or BitPanda but will be able to open an account with Coinbase.
Europe, including the UK, is probably the most welcoming region for cryptocurrency exchanges and trading platforms. Most reputable providers accept users from this region without limitations or exceptions. If you are ever in doubt whether you can open an account with a specific platform you can either speak to the customer care team or proceed with registration and check if your country is available.
Both eToro and Plus500 are trading platforms which specialise in offering Contracts for Difference on cryptocurrencies and other assets. This means that with these platforms you do not actually buy the Bitcoin coin, but a contract whose value originates from the underlying asset. These financial instruments are considered highly risky since they normally involve trading on margin. You should, therefore, only invest in them if you fully understand the risks involved.
Buying Bitcoin is only one part of the process of successfully owning the currency, the other part involves storing it securely. Cryptocurrencies, including Bitcoin, are stored in wallets, which can take various forms. While hardware or cold storage wallets offer the highest degree of security, they are also physical devices which you must carry around with you.
Furthermore, in most cases, when you need to make a transfer or trade you must connect these devices to a computer or mobile-first, before proceeding. This can cost you valuable time, with the result being that the currency you wish to trade changes its value before you get to executing an order.
Alternatively, you can opt to use a virtual, web or desktop wallet. These wallets are less secure than hardware wallets since they are constantly connected to the network but allow you to quickly move funds around and make trades. Several top cryptocurrency exchanges, such as Coinbase and CEX have in-built wallets, which means you can store the currency directly on the exchange platform without needing a third-party wallet.
For those looking to profit from Bitcoin without wanting the hassles of storing the coin, Bitcoin CFDs provide an effective solution. Since you are purchasing a contract and not the underlying asset, you eliminate the need for ensuring proper storage. This is also the reason why most CFD platforms tend to charge lower trading fees than traditional exchanges since no real asset trade is taking place.