Bitcoin is undoubtedly the king of the cryptocurrency industry and the dominant asset by market capitalization. With several leading figures predicting the price of Bitcoin to surpass $100,000 by year-end, investors and institutions are again turning their attention to buying and holding the limited supply of cryptocurrency for the long term. For those that are yet to purchase Bitcoin and sitting on the fence, this guide will explain how to buy Bitcoin and compare the best places to buy Bitcoin so you can make an informed decision.
Bitcoin was invented as a "Peer-to-Peer Electronic Cash System" without intermediaries from financial exchanges as an alternative to the traditional fiat-currency system. The objective is to create a transparent, immutable, and censorship-resistant digital currency to send payments from one party to another. It is a limited supply asset capped at 21 million Bitcoins, with nearly 19 million BTC's already mined. For more information, read our guide on the Bitcoin basics.
The best places to buy Bitcoin are through a cryptocurrency exchange that lists Bitcoin for purchase using fiat currency (e.g. USD, EUR, GBP) or accepts altcoins and stablecoins in exchange for BTC. These platforms are available worldwide, offer a variety of payment methods, have a feature-rich user interface, responsive mobile app and provide good value for money. Examples of top-rated exchanges to buy Bitcoin based on HedgewithCrypto's reviews are:
|Exchange||Crypto Assets||Trading Fees||Rating||Promotion||Website||Review|
$5 BTC bonus (USA only)
|Visit Coinbase||Coinbase Review|
20% off trading fees
|Visit Binance||Binance Review|
0.02% / 0.07%
5% off trading fees
|Visit FTX||FTX Review|
None available at this time
eToro USA LLC; Investments are subject to market risk, including the possible loss of principal. Archived, "Virtual currencies are highly volatile. Your capital is at risk."
Investors that understand the fundamental aspects of limited supply and growing demand realize the shift from a digital currency into an investable asset value. Bitcoin is currently the 9th largest investable asset with a total market capitalization of $835.78 Billion at the time of writing. According to statistics, there are currently approximately 81 million Bitcoin wallets that were created to buy, hold and store Bitcoins. Given the fixed amount of Bitcoins and growing interest, the supply and demand equation suggests a favorable outcome in the long run.
The easiest and safest way to purchase Bitcoin is using an exchange and by following these steps:
- Compare and select a crypto exchange. Find and compare cryptocurrency exchanges that are available within the specific country and support the fiat currency that is to be converted into BTC. Each exchange will have different deposit options to fund an account with money. Other important considerations to find the right exchange are the deposit, trading and withdrawal fees, account and wallet security and customer support.
- Register an account with the exchange. Create an account with a crypto exchange using a valid email address or mobile number. Before making a deposit in fiat currency, exchanges have a mandatory Know Your Customer (KYC) process that will need to be completed. This is to meet the international Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) requirements. It is also recommended to activate 2 Factor Authentication (2FA) for additional account security.
- Deposit funds to a wallet. Choose a payment option that offers the best fees and reasonable speed for the funds to arrive in the exchange wallet. The most common payment methods include a bank transfer, wire transfer, debit card, credit card and PayPal. Existing crypto investors can also deposit altcoins or stablecoins (e.g. USD, USDT or BUSD) which can be converted into Bitcoin on the exchange.
- Buy Bitcoin. Browse the supported assets and choose Bitcoin. Use the funded account to choose an amount to spend. Finalize the transaction by clicking on 'Buy'. The amount of Bitcoin will be determined at the selected price and transferred to the user's BTC wallet.
Binance is the largest and most traded exchange in the world and is currently ranked #1 based on the volume traded and liquidity. Established in 2017, the exchange has become an all-in-one location for buying, selling, trading, storing and earning on digital currencies such as Bitcoin. Binance is free to join and is available in over 100 countries worldwide and accepts deposits in multiple fiat currencies such as AUD, USD, EUR, GBP, SGD & UGX which can be safely converted into Bitcoin. The most common payment methods available are bank transfers, SEPA, bank cards (VISA) and SWIFT.
At the time of writing, Binance is the most used exchange for trading Bitcoin against Tether (USDT) and USD Coin (USDC) with approximately 7.48% of all trading volume. Deep liquidity translates to lower spreads and the risk of slippage. Moreover, Binance has a maximum trading fee of 0.1% which reduces with higher trading volume and staking BNB. In short, Binance is one of the cheapest places to buy Bitcoin when all fees and spreads are considered.
Coinbase is widely known as a safe and reputable crypto exchange that is trusted by thousands of customers worldwide. Headquartered in San Fransisco, California, Coinbase is one of the best exchanges for buying Bitcoin and managing a portfolio with its easy-to-use mobile app.
A benefit of Coinbase is the simple and beginner-friendly design that is tailored for new investors. The overall experience to select a payment method and buy Bitcoin is quick and easy with a variety of supported fiat currencies such as USD, GBP, EUR and AUD. Funds can be allocated to a trading account using a credit and debit card but the fees are quite expensive at 3.99% for most regions.
Like Binance, there is a good selection of features and products available on Coinbase after the initial Bitcoin purchase. In particular, Coinbase allows users to stake crypto on the platform to earn a return. The selection of staking coins is quite limited, however, includes the most popular coins.
eToro is a global financial brokerage that was established in 2007 to provide financial trading and investing platform. It caters to several markets including Crypto, ETFs, Stocks, Indices, Commodities and Forex. The platform is available in over 100 countries worldwide and has become a trusted and reliable financial services provider. Similar to Coinbase, the ease of use and visual portfolio manager separates eToro from its competitors. There is even a free demo mode to trade crypto which is ideal for newer traders to become familiar with the platform and markets.
The platform is geared towards crypto enthusiasts, beginners and serious investors alike. Getting started with eToro is straightforward and can be funded using a bank transfer or wire transfer with as little as USD 10. This is also the minimum trade which means investors can purchase Bitcoin with a small amount of money.
The fees on eToro are straightforward with a flat 1% commission on Bitcoin purchases. While the fees are a little higher compared to other crypto platforms, the spreads are very competitive. Overall, eToro is a trusted and regulated Bitcoin platform with an innovative mobile app to monitor the purchase on the move.
To buy Bitcoin safely and securely, it is important to select a reputable crypto exchange or platform that complies with local regulations and laws. Here are a few considerations to take on board before buying Bitcoin on an exchange:
- Trusted and regulated: Using a local exchange is a smart decision when buying or selling Bitcoin. To operate within the country, the exchange will need to abide by the Government's laws and regulations.
- Deposit options: The exchange should accept a preferred payment option to fund an account. The most common methods are bank transfers, wire transfers, PayPal, credit/debit cards or a cryptocurrency wallet. Each option will have varying payment fees, minimum and maximum limits and transfer speeds to be aware of.
- Fees: There are several different fees to be aware of. Depositing funds such as fiat currencies will usually incur a payment charge. Depending on the exchange, payment method and the amount, the fees can be a fixed amount or a percentage. The other major cost is the trading fee which can be as high as 2.99% per transaction. The major crypto exchanges are the best choices as they can offer zero fiat deposit fees and low trading fees from 0.1%
- Secure wallet: Bitcoin purchases on a centralized exchange will be held by the platform until it is transferred to a personal wallet. To minimize the risk of fraudulent account access, the exchange should at a minimum include 2 Factor Authentication (2FA) for login and withdrawals and utilize a combination of hot and cold wallets. Some exchanges even provide insurance on stored Bitcoin.
Crypto enthusiasts are always looking for cheaper, faster and more secure ways to buy Bitcoin. Here is the best method for buying Bitcoin on cryptocurrency exchanges that can be used.
1. Credit/Debit Cards
Debit cards and credit cards are simple, safe, and fast payment options for users who lack bank transfers due to local regulations on exchanges. In this case, users must obtain a credit or debit card with a financial institution that accepts transactions to acquire Bitcoin.
Most exchanges will let users link a Visa or Mastercard credit card issued in their fiat currency. The platforms automatically convert the currency into their supported options. Some exchanges have partnered with third-party payment providers such as Simplex to offer their customers an option to buy crypto with credit cards. Credit cards may carry a service surcharge ranging from 0% to 5% per transaction.
2. Prepaid Cards
Prepaid cards are a common payment method on most cryptocurrency exchanges. Otherwise referred to as everyday cards, prepaid cards are similar to conventional debit or credit cards, except they don’t rely on a bank or financial institution. Users only need to load their cards with money and proceed to purchase Bitcoin. Cardholders can also replenish their prepaid cards when funds are running low. Buying Bitcoin with a prepaid card may attract higher fees compared to other payment methods.
3. Bank Transfer
Most crypto exchanges support the option to buy Bitcoin with bank transfers. Common bank transfer options include SEPA in Europe, ACH in the United States, Faster Payments in the U.K., and SWIFT which is available worldwide. Bank transfers are a preferred option since they provide higher spending limits and low or no processing fees. The only drawback is that bank transfers are not instant and it could take 3 to 5 days for the funds to be received in the account wallet.
4. Apple Pay
A handful of cryptocurrency exchanges allow users to buy Bitcoin with Apple Pay, an exclusive payment method for the iOS ecosystem. Apple Pay works as a digital wallet, so users don’t need any physical needs. Simply add the cards information to the wallet and use it to buy Bitcoin on supported exchanges.
Some benefits of this payment method are that users enjoy simplified payments, they can pay offline, and manage their transactions and assets from a centralized place. A drawback is that Apple Pay doesn’t support large transactions.
5. Gift Cards
Users can redeem unused or leftover gift cards, such as from Amazon, through online exchanges to buy Bitcoin. Currently, this payment method isn’t supported on traditional fiat-to-currency exchanges. Investors can cash out their Bitcoin profits into the gift cards and spend like money.
Several exchanges and platforms support PayPal as a means to deposit fiat money to fund a wallet. Once the funds are deposited from a PayPal account, users can proceed to search for Bitcoin on the exchange and purchase it. Alternatively, individuals located in the U.S. and U.K can buy BTC directly through the PayPal application. There is a minimum wallet balance of $1 which makes PayPal one of the easiest and most accessible ways to buy Bitcoin. For more information on how and where to buy Bitcoin with PayPal, read this guide.
The first step to buying Bitcoin is to decide on what type of cryptocurrency services to use. There are several options which include fiat-to-crypto exchanges, trading platforms, decentralized exchanges and brokerages to choose from. Centralized crypto exchanges are the most commonly used and convenient for beginners which allow individuals to buy, store, trade and sell Bitcoin.
Exchanges such as Coinbase, Binance and Crypto.com offer a wide range of features, products and services that can be beneficial after the initial purchase. For example, these particular exchanges allow investors to earn interest on Bitcoin to earn passive rewards.
Important aspects to keep in mind when selecting a Bitcoin exchange are:
- Supported countries and accepted fiat currencies
- Deposit methods and limits
- All fee types (deposit, trading and withdrawal)
- Ease of use for all experience levels
- Trading volume and liquidity (minimize spread and slippage)
- Industry-standard security measures
- Live-chat or support desk
Create an account with the selected cryptocurrency exchange using a valid email address. To buy Bitcoin with a fiat currency such as USD, GBP, EUR or AUD, an identity verification process will need to be completed that will generally require the following information:
- Full name
- Email address
- Proof of ID
- Proof of address
- A photograph showing the face
This information is collected by the exchange to comply with the international Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. Certain platforms with crypto-to-crypto trading only do not require ID verification, however, there may be limits on the amount that can be withdrawn per day. For additional account security, it is also recommended to activate 2 Factor Authentication which adds another security layer for account login and withdrawal requests.
The next step is to deposit funds to the account or transfer cryptocurrency from another trading platform or wallet. For those that are buying crypto for the first time using fiat currency, exchanges provide several on-ramp options to deposit money including wire transfer, bank transfer, credit/debit cards and Faster Payments. There are usually minimum limits and payment fees for each supported payment method which can vary on the investor's place of origin. A common method available is buying Bitcoin with a credit card, however, the fees are a lot higher and are not recommended.
Once an account is funded with money, the last step is to find Bitcoin in the asset list and click buy. Depending on the exchange, the way to purchase Bitcoin will be a simple order form or using an advanced trading platform with different order types. Using the deposited funds, choose the amount to spend on Bitcoin. The amount of Bitcoin that will be received will usually be shown at the time of the transaction. Review and complete the trade and the purchased amount of Bitcoin will arrive near-instantly in the user's wallet.
Purchased Bitcoin should not be left on an exchange permanently. While they will generally feature bank-like security measures, the best practice is to withdraw the Bitcoin and hold it within a wallet under the owner's custody. The options available to an investor after purchasing are:
- Leave the Bitcoin on the exchange. Centralized cryptocurrency exchanges provide wallets for users to store their Bitcoin. While these exchanges feature leading-edge security features, exchanges have been known to be hacked. Purchased Bitcoin should be withdrawn as most exchanges do not have insurance or consumer protection.
- Transfer to a software or mobile wallet. Often referred to as 'hot wallets, these wallets store Bitcoin on portable devices such as mobile phones, computers and apps. They are highly convenient, accessible, available and easy to use for Bitcoin owners but have a risk of theft as it is still connected to the internet.
- Transfer to a hardware wallet. The devices are small compact devices that store the unique encrypted private key that gives access to the wallet. The stored Bitcoin is disconnected from the internet which severs the opportunity for hackers to steal the Bitcoin. The downside is that users are 100% responsible for Bitcoin safety. For more information, read our guide on the best hardware wallets.
The process of buying Bitcoin is becoming more accessible through cryptocurrency exchanges that provide easy-to-use platforms and mobile apps. While many investors will be initially challenged to understand how to buy Bitcoin on an exchange and transfer to a personal wallet, the overall experience will become more streamlined and simplified with mainstream adoption. At the time of writing, using an exchange is the best approach to obtain Bitcoin that can be completed in 4 steps: selecting a reputable Bitcoin provider, registering an account, depositing funds and purchasing Bitcoin.
It is possible to buy a small fraction and not a full Bitcoin. For example, an investor can deposit $100 to obtain a small amount of Bitcoin. The exact amount of BTC received will depend on the Bitcoin price at the time of the purchase. Some exchanges will impose a minimum transaction amount that should be considered.
Yes, it is possible to make real money from investing in Bitcoin. Due to the constant imbalance of supply and demand, there will always be opportunities to buy Bitcoin and sell for cash profits. Investing in the Bitcoin market is highly speculative and losses can occur.
There are several methods to acquire Bitcoin without directly purchasing it with fiat currency or other cryptocurrencies. Popular ways to earn free Bitcoins include cashback programs, lending Bitcoin to earn interest, completing surveys and polls, mining Bitcoin and joining affiliate programs that pay in BTC.
Kevin started in the cryptocurrency space in 2016 and began investing in Bitcoin before exclusively trading digital currencies on various brokers, exchanges and trading platforms. In 2019, he started HedgewithCrypto to publish informative guides about Bitcoin and share his experiences with using a variety of crypto exchanges around the world.