Although Bitcoin is now in its 11th year since gracing the world with its presence, only a very small percentage of the wider population have taken the plunge by making a personal investment of their own. The good news is that it is still not too late to catch this innovative asset class. In fact, you simply need to find a reliable online broker or exchange, deposit some funds with a debit/credit card or bank account, and then you’re ready to buy Bitcoin.
Not too sure where to start? In this guide, we show you how to buy Bitcoin in the easiest, cheapest, and most secure way. We’ll discuss the best Bitcoin brokers and exchanges to do this with, alongside a handy step-by-step guide to walk you through the process.
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How to Buy Bitcoin in 3 Simple Steps
Don’t have time to read our comprehensive guide all of the way through? If so, below we outline how to buy Bitcoin in the US in three simple steps.
Step 1: Open a Trading Account
Find an online broker that allows you to buy Bitcoin.
Step 2: Deposit Funds
Deposit funds with a debit/credit card, e-wallet, or bank account.
Step 3: Buy Bitcoin
Determine how much you wish to invest, and then buy Bitcoin.
This ad promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in most EU countries, no EU protections & not supervised by the EU regulatory framework. Investments are subject to market risk, including the loss of principal.
Step 1: Choose a Bitcoin Broker or Exchange
If you want to buy Bitcoin in the safest and most convenient way possible, you are advised to use a cryptocurrency broker. With hundreds of such platforms now active in the online space, knowing which one to choose can be difficult. For example, you need to ensure that the broker accepts your preferred payment method and that its fees and commissions are competitive. Most importantly, it’s crucial that the platform is regulated.
To point you in the right direction, below you will find a list of popular trading platforms that allow you to buy Bitcoin with ease.
1. eToro: Best All-Around Bitcoin Broker
eToro is an online broker that offers several asset classes. On top of traditional stocks and shares, forex, and CFD products, you can also buy and sell cryptocurrencies. This includes Bitcoin, alongside 15 other digital coins. The most appealing factor of using eToro is that you will not pay a single cent in commission if you simply want to buy Bitcoin without leverage.
Instead, it's just the spread that you need to take into account. During standard trading hours this stands in and around the 0.75%-mark, which is acompetitive. eToro is also a popular choice with newbie investors as the platform is ultra-simple to use. You simply need to open an account and upload some ID, before meeting a $200 minimum deposit.
You can do this with an everyday debit or credit card, bank account, or an e-wallet like Paypal and Skrill. There are no deposit fees per-say, albeit, you will need to pay a small 0.5% currency conversion fee if you deposit in a currency other than US dollars. eToro offers a cryptocurrency wallet that you can use to securely store your Bitcoin.
When it comes to safety, eToro is regulated by three respected bodies. This includes the FCA (UK), ASIC (Australia), and CySEC (Cyprus). Finally, as eToro also offers cryptocurrency CFDs, you can trade Bitcoin with leverage. This also allows you to short-sell Bitcoin, meaning you think the price will go down, if you think it is overvalued!
- No commissions & tight spreads
- Social and copy trading platform
- Cryptocurrency wallet
- Strictly regulated
- Requires ID verification to trade large sums
2. Changelly: Great Option for First-Timers
Changelly is an online platform that performs the role of both a broker and exchange. That is to say, you will have the option of buying Bitcoin with a traditional debit or credit card with ease, while at the same time, you can also use the platform for exchange services.
For example, you might decide to exchange Bitcoin for Ethereum. When trading between digital coins, Changelly will charge you 0.5% of the order value. Just be sure to keep an eye on the price of Bitcoin against that of its current market value, as this can fluctuate widely at the platform.
Crucially, Changelly is a good option if you are looking to buy Bitcoin for the first time. Its platform is super-easy to use, meaning that you don't need to have any prior experience of buying cryptocurrencies.
- Easy to use and anonymous
- Low fees for cryptocurrency trades
- A very wide selection of coins
- Below-market exchange rates to buy Bitcoin from fiat
- Not regulated by a tier-one licensing body
3. Coinmama: Best Bitcoin Exchange for Instant Delivery
If you're looking to buy Bitcoin in a matter of minutes, it might be worth considering Coinmama. The online broker, which has its headquarters in Israel, first opened its doors in 2013. This makes it one of the oldest cryptocurrency exchanges in the space.
Along the way, Coinmama has built an excellent reputation as the go-to broker for newbies. This is because the platform comes without any bells and whistles, and instead focuses on simplicity. The end-to-end process requires you to provide some personal information, upload some ID, enter your payment details and that's it - you can buy Bitcoin.
Once the transaction is processed, the coins will instantly be transferred to your private wallet. In terms of fees, this is somewhat of a draw-back at Coinmama. For example, you will pay 2% above the current market price of Bitcoin, and then a 3.90% transaction fee. If you decide to use a debit or credit card, you can add an additional 5% on top of this.
- Quick and easy to buy Bitcoin
- High purchase limits
- Emphasis on safety in buying BTC
- High fees
- Buy orders only
- Not FCA-regulated
4. Coinbase: The World's Best-Known Crypto Broker
There is often a trade-off between reputation and cost-effectiveness in the Bitcoin space, and Coinbase is no different. For those unaware, Coinbase is arguably the most well-known cryptocurrency broker in the online arena. The overarching reason for this is that the platform makes is a seamless process to buy Bitcoin.
Moreover, Coinbase has an excellent reputation - not only with consumers, but with leading regulators such as the SEC. This is further amplified when you take a closer look at the broker's internal and external security practices. For example, near-on 98% of client funds are held in cold storage, and you are required to set up two-factor authentication when accessing your account.
As great as all of this is, you should be prepared to pay a handsome price. This starts at the very offset when depositing funds, as Coinbase charges 3.99% on debit cards. Credit cards are no longer accepted, albeit, bank transfers are an alternative, cheaper option. You will, however, need to wait a few days if paying via a bank wire. You also need to pay a 1.49% commission when buying and selling Bitcoin.
- One of the largest and most trusted exchanges
- Easy to use with plenty of great features
- Plenty of safety features
- Fees can be high
- Customer support isn't always great
Step 2: Learn How the Bitcoin Market Works
As easy as it now is to buy Bitcoin in the US from the comfort of your home, we would suggest brushing up on the basics before taking the plunge. With this in mind, below we discuss the ins and outs of how the Bitcoin markets work.
What is Bitcoin and How do you Trade It?
Bitcoin is a digital currency, meaning that you cannot physically touch it or see it. Instead, the technology allows you to send and receive funds in a virtual manner. As per the ‘blockchain’ protocol that supports Bitcoin, transactions are sent and received in a decentralized manner. In layman’s terms, this simply means that no single person, authority, or institution has control over the Bitcoin network.
Bitcoin and the blockchain protocol are also unique because they:
- Allows you to send and receive funds in an anonymous manner
- Is not backed by a central bank or government
- Ensures that all transactions appear on the public ledger
- Cannot be hacked or overridden
- Gives you 100% control over your funds
As great as the underlying technology is, most people holding Bitcoin do so on a speculative nature. That is to say, people buy Bitcoin in the hope it will be worth more in the future. As a result of this, Bitcoin is home to billions of dollars worth of trading volume each and every day.
How to Earn From Buying Bitcoin
As we briefly eluded to in the section above, the overarching objective of buying Bitcoin is to make money. You will do this by buying Bitcoin at a lower price than you sell it for in the future. Put simply, this works in exactly the same way as buying a traditional asset class like stocks and shares.
- You buy $1,000 worth of Bitcoin when it is worth $5,000/BTC
- You hold on to your Bitcoin for a number of years
- You decide to sell your Bitcoin when it is worth $15,000/BTC
- As this is three times the amount you originally paid for it, your investment is now worth $3,000
- Once your Bitcoin is sold, the funds are added to your brokerage account in real-world cash.
Although the above example illustrates that a Bitcoin investment is relatively similar to that of buying stocks and shares, there is one key metric that the former lacks: dividends. Much like gold, oil, natural gas, and other ‘commodities’, Bitcoin only generates income in the form of capital gains.
Although most newbie investors buy Bitcoin as a long-term investment, some opt to trade it on a short-term basis. This works largely like online forex trading. This is because Bitcoin trading involves speculating on the future direction of a particular exchange rate.
This might be:
- The exchange rate between Bitcoin and a fiat currency like the US dollar. For example, if BTC/USD is priced at $10,000 – traders would seek to determine which way the price will go in the short-term.
- The exchange rate between Bitcoin and an alternative cryptocurrency like Ethereum. For example, if BTC/ETH is priced at 40.5 – traders would seek to determine which way the price will go in the short-term.
Ultimately, it is important to understand the difference between ‘investing in Bitcoin’ and ‘trading Bitcoin’ before getting started.
What Regulations are in Place for Buying Bitcoin?
There is no one-size-fits-all answer to the regulatory standing of Bitcoin as an asset class for one key reason – the digital currency is not backed by any government, nation-state, or central bank. As we noted earlier, this means that Bitcoin is decentralized. With that being said, Bitcoin regulations will differ from country-to-country.
Generally speaking, there are few countries that do not allow you to buy Bitcoin. But, you do need to be extremely careful in your choice of broker, not least because much of the industry operates in an unregulated manner. This is why we would strongly suggest that you only use a Bitcoin broker that is heavily regulated.
A prime example of this is eToro, which holds licenses with reputable bodies like the FCA and ASIC. As an additional point of consideration, most countries require you to pay tax on any profits you make form your Bitcoin purchases. Although this will vary from state-to-state, your liabilities typically fall in-line with capital gains tax.
What Risks are Involved with Buying Bitcoin?
As is the case with all investment classes, you need to consider the risks before buying Bitcoin. Below we list some of the main considerations that you need to make before taking the plunge.
- Bitcoin is a highly speculative asset class
Make no mistake about it – you will struggle to find an asset class that is more volatile than Bitcoin. The good news is that the industry is significantly less volatile than it once was. The bad news is that double-digit price movements in a 7-day period are still not uncommon. As a way to counter this risk, it might be best to average your investments out with smaller amounts, as opposed to injecting a large lump sum.
- Lots of Bitcoin brokers remain unregulated
As we mentioned just a moment ago, many brokers active in the Bitcoin space still operate without a license. This presents a substantial risk on your funds, as you won’t have a regulatory body to fall back on. Those licensed by the likes of the FCA, ASIC, and CySEC are required to keep funds in segregated bank accounts, and they will need to be audited by their respective licensing bodies on a regular basis.
- You are 100% responsible for safekeeping your Bitcoin
If you want to invest in cryptocurrencies in the truest form, then you might need to consider transferring the coins to a private Bitcoin wallet. This means that you will be 100% responsible for its safekeeping. While there are numerous safeguards in place to prevent loss and/or theft, if something goes wrong you will have nowhere to turn. This is why you might be best to keep your coins at a regular broker – as opposed to withdrawing them out.
Step 3: Learn How to Buy Bitcoin
So now that you know the ins and outs of how the Bitcoin markets work – alongside the many risks that you need to consider, we are now going to discuss the different ways you can buy it.
- How to Buy Bitcoin with a Debit Card
If you are looking for the easiest and most convenient way of buying Bitcoin – it might be worth using your everyday debit card. As soon as the transaction is processed, you will instantly have access to your newly purchased Bitcoin.
In order for Bitcoin brokers to accept a debit card payment, they must hold a license. In turn, this forces brokers to verify the identity of each and every buyer.
- How to Buy Bitcoin with a Credit Card
Buying Bitcoin with a credit card works much the same as using a debit card. That is to say, you can easily buy Bitcoin in minutes, as transactions are processed instantly. Although popular cryptocurrency broker Coinbase no longer accepts credit cards, eToro does.
Best of all, the latter does not charge any deposit fees (other than a 0.5% conversion fee for non-USD transactions). In comparison to Coinbase and its 3.99% credit card fee, this is substantially cheaper.
- How to Buy Bitcoin with PayPal
Buying Bitcoin with Paypal is slightly more tricky, as very few online brokers accept it. Once again, the exception to this rule is eToro, which not only accepts Paypal, but Skrill and Neteller, too. Once you have gone through the process of creating an account and uploading a copy of your ID – you simply need to transfer the funds via the eToro platform.
A pop-up box will appear asking you to enter your Paypal credentials, and in most cases, the transaction will then be processed instantly.
- How to Buy Bitcoin without ID
The days of buying Bitcoin without producing ID are coming to an end. This is to ensure that transactions fall in-line with wider anti-money laundering laws.
After all, Bitcoin transactions are not tied to the true identity of the sender or receiver, so financial crime units need to know who is behind the initial fiat purchase.
Even the likes of LocalBitcoins.com are now asking users to identify themselves once a small transaction limit has been surpassed.
With this in mind, the only sure-fire way of buying Bitcoin in an anonymous manner is to engage in a face-to-face trade. This is hugely risky, as you stand the chance of being scammed.
Step 4: Open an Account to Buy Bitcoin Online
So now that we have outlined the fundamentals that you need to be aware of before buying Bitcoin for the first time, we are now going to walk you through the purchasing process.
Take note, the steps listed below are based on popular Bitcoin broker eToro, as the platform is [A] heavily regulated [B] easy to use [C] accepts multiple payment methods and [D] does not charge any commissions. With that said, you are welcome to use any broker of your choosing, as the buying process remains largely the same across all platforms!
Step 1: Sign Up
To get the ball rolling, visit the eToro homepage and open an account.
As a regulated broker, eToro will ask you to enter some personal information. This includes your name, home address, date of birth, and contact details. The platform will also need to ask you some basic questions about your historical trading experience – not least because it also hosts CFDs and leverage facilities.
Step 2: Upload ID
As we covered earlier, reputable brokers will always ask you to upload some ID when buying Bitcoin, as this ensures they remain compliant with anti-money laundering laws.
As such, you’ll need to upload a copy of your:
- Government-issued ID – such as a passport or driver’s license
- Proof of residency – such as a utility bill or bank account statement
The above documents are usually verified within minutes.
Step 3: Deposit Funds
You will be buying Bitcoin with real-world money, so you will now need to deposit some funds.
- Debit Cards
- Credit Cards
- Bank Wire
Minimum deposits start at $200.
Step 4: Buy Bitcoin
Now that your eToro account has been funded, you can buy Bitcoin. First, enter Bitcoin into the search box, and click on the result that pops up.
If you simply want to buy Bitcoin (as opposed to trading it), all you need to do is enter the amount that you wish to invest. You don’t need to buy an entire Bitcoin, which at the time of writing would cost just over $9,500. Instead, eToro allows you to invest from just $50 – as per the screenshot above.
Finally, click on the ‘Open Trade’ button to complete your Bitcoin purchase!
In summary, buying Bitcoin as a first-timer has never been easier. Once you have found a suitable broker, you simply need to open an account, deposit some funds, and decide how much you wish to buy. With that said, knowing which broker to sign up with is the most challenging part – as no-two platforms are the same. Crucially, you just need to make sure it holds a license with a reputable body.
All in all, if you want to benefit from commission-free trades at a heavily regulated Bitcoin broker, we suggest using eToro. Simply click the link below to register an account on eToro today!
eToro: Best Place to Buy Bitcoin in 2021
- Buy Bitcoin with low fees
- Cryptocurrency wallet
- Social and copy trading
- Accepts PayPal
- Strictly regulated
What is the easiest way to buy Bitcoin?
The easiest way to buy Bitcoin in the US is from a reputable online broker. In doing so, you'll be able to use your debit or credit card, meaning you can complete the investment process in minutes.
Is Bitcoin a good investment?
Only you can answer this question, not least because Bitcoin won't be for everyone. If you have virtually no appetite for risk, then cryptocurrencies likely won't be for you. Similarly, if you are looking to invest in an income-generating asset, Bitcoin won't suffice. On the other hand, if you are looking to invest in a technology that could play a major role in the future of money, Bitcoin is an interesting instrument to consider.
Do I need a wallet to buy Bitcoin?
You don't need a wallet to buy Bitcoin. But, if your chosen broker requires you to withdraw the coins out, then yes - you will need to store your Bitcoin in a private wallet.
Is Bitcoin a store of value?
Once again, this particular question is subjective. With that said, many would argue that Bitcoin does have characteristics that resemble a value. At the forefront of this is a finite supply that will conclude at just over 21 million coins.
Do I need to buy an entire Bitcoin?
Bitcoin is a digital currency, meaning that it can be fractionalized with ease. In fact, it can be decimalized by up to 8 numbers, so in theory, you can buy 0.00000001 BTC!