How to Buy Bitcoin: 3 Easy Steps
While cryptocurrency prices are significantly lower than they were in January of last year, many analysts expect the next year to be less volatile and more sustained as the industry matures. This means it’s an interesting opportunity for those that missed out on the rally of 2017 to make their first investment in Bitcoin.
Bitcoin is the oldest and most valuable cryptocurrency by a long distance, and it’s also the most widely used digital currency for payments and peer to peer transactions. In many cases the only reason people have yet to invest is that they don’t understand the process of buying Bitcoin. For that reason, we’ve put together this simple guide for buying Bitcoin.
1. Choose an exchange
There are actually several ways to buy Bitcoin, including via cryptocurrency exchanges, from cryptocurrency brokers, Bitcoin ATMs and even directly from other users. However, cryptocurrency exchanges are generally the cheapest, easiest and safest. CredoEx, Coinbase, Kraken, Bitfinex, Binance, and Poloniex are all highly regarded exchanges which offer trading in Bitcoin and other currencies.
Your choice of exchange will depend on where you are located, how you wish to fund your account and whether or not you plan to invest in other cryptocurrencies besides Bitcoin. Some exchanges only accept clients from certain countries, though all of the exchanges listed above are available to US citizens.
Coinbase is an easy to use exchange that accepts fiat deposits and allows users to pay by credit card. The downside is that the fees are quite high and it offers a limited range of cryptocurrencies.
Poloniex and Binance offer a wider range of coins but do not accept deposits in fiat currency, so you will have to already own a cryptocurrency to trade on them.
Bitfinex and Kraken are both decent exchanges that accept fiat (like USD and EUR) deposits, but only via wire transfer. They both offer a decent range of popular cryptocurrencies.
CredoEx is a very slick, easy to use platform, and offers a growing range of cryptocurrencies. CredoEx also does not charge a fee when you transfer Bitcoin to or from the exchange.
Credo, the token that powers the BitBounce ecosystem, can also be traded for Bitcoin and other crypto assets on CredoEx. You can earn Credo by signing up to the BitBounce email paywall which pays you to receive unsolicited email. This is a great way to begin investing passively in crypto without spending any money.
Most exchanges allow you to both buy and store Bitcoin. This means you do not need your own cryptocurrency wallet to store your Bitcoin. That’s fine for relatively small amounts of cryptocurrency, but if you want to make a substantial investment it is advisable to use your own software or hardware wallet to store Bitcoin (or any other cryptocurrency). Before choosing an exchange, you should also make sure they will allow you to transfer your Bitcoin to another wallet.
Popular Bitcoin software wallets including Bitcoin Core Wallet, Armory and Electrum can be downloaded for free. Those looking for an added level of security can buy a Trezor or Ledger hardware wallet.
2. Open and Fund an Account
Once you have chosen an exchange you will need to open and fund an account. Opening a new account is usually very easy and only a few personal details are required.
When setting up your account you will usually have to verify it and provide some form of FICA document to prove your identity. Fortunately, because the industry is so competitive, exchanges tend to make this as easy as possible – unlike banks. In many cases you can simply take a photograph of your driver’s licence and upload it to the website.
If you choose to buy your Bitcoin on an exchange that accepts credit card deposits, you will be able to fund your account and buy Bitcoin straight away. If you fund an account using a wire transfer, you will have to wait for the transfer to be processed and be reflected on your account.
If you already hold other cryptocurrency in a wallet or another exchange, you will need to transfer it to the exchange you wish to use to buy Bitcoin. The exchange will provide you with a wallet address to send the funds to. Make sure you are using the wallet address for the right currency, or you may lose the coins you send.
3. Make Your First Trade
Once your account is set up and funded, either with fiat or digital currency, you are ready to buy Bitcoin. Some exchanges will allow you to choose the USD value would like to invest, while others allow you to choose the amount of Bitcoin you wish to buy. On some exchanges you can also set a limit price, which means your trade will only be executed at the price you choose or lower.
The price of Bitcoin, on average, moves about $200 every day, so there is no need to worry about prices that are a few dollars higher than other exchanges, but it is worth knowing you aren’t paying prices that are a lot higher. For this reason, it is worth checking the price on CoinMarketCap. This site lists up to date prices for nearly every cryptocurrency and will give you an idea of the price Bitcoin is trading at. The price listed for each currency is the average from numerous exchanges. If you click on the Bitcoin price a list of the latest prices on each exchange will come up. This will give you an idea of the current price range and whether the price you are paying is fair.
Once your trade has been executed, your Bitcoin will show up in your wallet on the exchange. You can then keep it in the exchange wallet or transfer it to your own wallet or to another exchange.
Buying Bitcoin really is that simple. Once you make your first investment you’ll see how easy it is, and you’ll have an incentive to keep tabs on the market and learn more about cryptocurrencies and the growing blockchain industry.
If you’d rather not spend any of your own money, connect BitBounce to your email for free and start getting paid for unsolicited emails in Bitcoin.