How to Buy Bitcoin
What A Novice Trader Needs To Know In 2022
Investing in Bitcoin is the rave of the moment. But since Bitcoin is nothing like traditional currencies, issued by a central bank or backed by a government, it plays by different rules.
What is Bitcoin
Bitcoin is a decentralized digital currency. The cryptocurrency stands on the blockchain technology which records transaction history for each Bitcoin unit in a ledger.
Bitcoin is known as a type of cryptocurrency because it uses cryptography to keep it secure. Transactions are verified by a massive amount of computing power via a process known as “mining.” Bitcoin is not issued or backed by any banks or governments, nor is an individual Bitcoin valuable as a commodity
Bitcoin is the first-ever cryptocurrency to be created. Although it is not the legal tender of any country as of now, it enjoys wide recognition and acceptance by many people and businesses. It is one of the top-performing digital assets in the world today, starting with a value of just a few cents to over $65,000 in February 2021.
How Much is Bitcoin
Cryptocurrencies do not have a fixed price, so the price at which you get Bitcoin may be different from how much another person buys, it all depends on the time of purchase. Bitcoin’s price at any point time is affected by several factors, which include its supply, the market’s demand for it, availability, and competing cryptocurrencies.
What You Need To Buy Bitcoin
There are a few things that you will need before you begin buying Bitcoin. Although there may be requirements unique to the platform on which you make your purchase, the general requirements are listed below.
- National ID card
- Drivers license
- Bank statement
- Utility bills
- Personal photos
Quick Guide To Buying Bitcoin
Decide Where to Buy Bitcoin
Cryptocurrency exchange platforms like Coinbase, eToro and Binance are popular choices for various reasons. Consider your country or state of residence, the platform’s services and policies before signing up.
Verify Your Account
Exchange platforms will ask you to verify your identity, address and sometimes payment method. You may need to provide pictures of a national ID card, driver’s license or Social Security card. Some exchanges also require Information about your source of funds.
Make Your Purchase
Once you are duly verified, you can make your order for Bitcoin and pay for it through various payment methods.
Think About Storage
Not all cryptocurrency exchanges have wallets although most do. If the exchange of your choice does not provide crypto storage services you need to make arrangements to transfer your assets to a safe place.
Best Places to Buy Bitcoin in 2022
eToro - Best Crypto Exchange
eToro is a leading social trading platform with many investment options including cryptocurrency. The UK-based company was founded in 2007 and has more than 20 million users in over 100 countries, including the US. eToro is liked by expert and beginner crypto investors because of its comprehensive and user-friendly platform.
You can buy Bitcoin on eToro through your credit card, Neteller or PayPal without having to come up with any deposit fees. The commissions are really low at 0.5% FX.
The positives of using eToro include being able to trade over 15 cryptocurrencies, from heavyweight coins like Bitcoin, Ethereum to Defi coins like Kyber Network, and Aave. Also, you get a choice of trading on the website or mobile app and access to a community of cryptocurrency traders. The issue you are likely to encounter is the $10 minimum purchase value placed on all cryptocurrencies. And that will only be a problem if you have less than $10 to invest.
- Offers access to CFD markets
- Offers access to CFD markets
- Regulated by the Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC) and the Australian Securities and Investment Commission (ASIC).
- Registered with the Financial Industry Regulatory Authority (FINRA)
- Charges a withdrawal fee of $5
Plus500 - Best Crypto CFD Platform
Based in Israel, Plus500 is a leading provider of Contracts for Difference (CFDs), delivering top-of-the-range trading conditions on Cryptocurrency, Shares, Forex and Commodities. It operates through subsidiaries throughout the Asia-Pacific and Europe.
Although both are done to earn a profit, there is a difference between trading cryptocurrencies on an exchange and trading cryptocurrency CFDs. Plus500 allows traders to buy Bitcoin contracts based on the price movements. They do not actually sell real Bitcoin. Traders make profits from the difference in price when they buy at a low price and sell when prices go up.
Plus500 is best for experienced traders who need a solid interface for executing trades. The platform has tight spreads and is believed to be a well-regulated broker with the most competitive spreads. Plus500 charges no commissions but gets compensated for its services through the Buy/Sell spread. Deposit and withdrawal are free of charge but users are charged for currency conversion, inactivity for up to 10 months and overnight funding.
Users enjoy fast and reliable execution of orders. Plus their system is protected from hackers with the Secure Sockets Layer (SSL) safety protocol. If your interest is to trade Bitcoin through price speculation without actually buying the asset, Plus500 is one CFD provider you must explore.
- Users enjoy fast and reliable execution of orders.
- In the UK it is regulated by the Financial Conduct Authority (FCA).
- The system is protected from hackers with the Secure Sockets Layer (SSL) safety protocol.
- Features trailing stop and stop-limit and stop-loss orders to help to lock in profits or limit losses.
- Access to over 2000 financial instruments and competitive fees across all trading pairs.
- Negative balance protection, so you do not lose more money than is in your account. That way you never owe your broker.
- Customer service representatives can only be contacted through email or chat alone.
- Customers in the United States currently cannot access Plus500.
Binance - Most Popular Exchange
Binance is possibly the most popular and largest crypto exchange platform in the world, judging by its daily trading volume. Reasons for popularity include low trading fees, a wide selection of cryptocurrencies and global trading access. Note that U.S crypto investors can not trade on the original Binance platform but will have to go through Binance.US, a version of the platform based in the U.S that serves 43 states with just over 50 cryptocurrencies.
Binance allows users to choose from several trading options such as spot trading, peer-to-peer trading, and margin trading. Order types on the platform include trailing stop order, limit order, market order, stop market order, post only order, stop-limit order and one-cancels-the-other order.
Users can access crypto futures and leveraged trading that allows traders to acquire crypto assets above their wallet balance. High trade activity allows Binance users to enjoy great liquidity. Users can trade via the Binance website, the Binance mobile app or the Binance desktop app. The platform supports fiat currencies, including EUR, USD, HKD, INR, GBP and AUD.
- More than 365 cryptos available in over 180 countries
- Trading commissions start from about 0.1 percent.
- Users get fee discounts for referrals or using Binance coins in trades. Also for reaching VIP status after trading a certain amount of assets.
- Supports and bank transfers and debit/credit cards.
- Great for advanced traders that are seeking sophisticated tools and features.
- Debit/credit card fees can be rather expensive.
- The platform may be a little too complex for newbies to navigate on their own.
Coinbase - Beginner's Choice
Coinbase is a well-known cryptocurrency exchange platform based in the U.S and it is unarguably the biggest crypto exchange there. The platform makes buying Bitcoin as easy as buying stock through an online brokerage. It is most often the go-to option for people who are new to the crypto space in the U.S. Coinbase Pro is a version of the platform for expert traders who find the regular Coinbase interface too simplistic.
Coinbase operates in over 100 countries and has more than 73 million users with $255 billion worth of assets on the platform. The platform supports close to 9,000 financial institutions and records around $327 billion trade value per quarter. Users can trade Bitcoin, Dogecoin, Ethereum and over 100 other cryptocurrencies.
Apart from the main Coinbase and Coinbase Pro platforms, the company has a separate cryptocurrency wallet service. And with these products, you most probably have everything you need to manage a portfolio. Users can access Coinbase on the web but it is also available as an app for Android and iOS mobile devices. Users can worry less about the safety of their assets as Coinbase uses industry-leading security practices.
- Simple interface that's easier to navigate than most other platforms.
- Transactions move quickly as Coinbase is one of the top liquid exchanges.
- Compared to some crypto exchanges, Coinbase offers a large and ever-increasing choice of altcoins.
- Low minimum balance and even lower pricing are available when users switch to Coinbase Pro.
- Users can earn cryptocurrency via interests on eligible balances or Coinbase earn.
- The main Coinbase platform typically has higher transaction fees.
- Compared to Binance, Coinbase doesn't have as many altcoins
CEX.io - Best Regulated Exchange
CEX.IO is a secured and well regulated and duly licensed cryptocurrency exchange. Based in London, CEX.IO has extended its reach to almost 200 countries and despite high regulatory standards is available in 48 U.S. states. Since its establishment in 2013, it has amassed over four million users. CEX.IO supports over 100 cryptocurrencies, including Ethereum, Uniswap, Litecoin, Bitcoin and other popular digital assets. It allows crypto enthusiasts from all over the world to earn, buy, sell, borrow and crypto.
The platform divides its customer base into 3 categories and tailors its product offerings accordingly. First is the ‘Everyone’ category which allows simple fiat-to-crypto purchase options, exchange staking, a crypto wallet and a crypto lending platform. Next are the ‘traders’, who benefit from margin trading, spot trading and on-the-go trading via a mobile home app. The last category is ‘Businesses’, businesses can use CEX.IO PRIME to access institutional-grade crypto trading services. It allows institutional-size buyers to easily access liquidity and integrate crypto payments with CEX Direct.
Although the platform has advanced trading features that make it suitable for experienced investors and traders, folks who are relatively new to crypto can use it too. Fees paid for include the makers-taker fee, deposit and withdrawal fees.
- Compliant platform with proper registrations and licenses everywhere it operates. In the U.S and Canada, CEX.IO is registered as Money Services Businesses (MSB).
- Provides an opportunity for users to earn crypto income by staking cryptocurrencies held on the platform.
- Users can take out loans in fiat currency using their crypto assets as collateral.
- Has a wide range of products and services for different markets that may overwhelm newbie crypto traders.
- It provides customers with lower liquidity compared to other leading global exchanges.
How To Buy Bitcoin on eToro
Buying Bitcoin on eToro for the first time typically takes 10 minutes or less. Although on some occasions it may take a couple of days to verify your identity and open your account.
To help make the entire process easier for you, we outline each step in detail below.
Step 1- Open A New Account
Unless you have previously opened an eToro account you will need to open one as the first step. When you go to the eToro website, click the ‘Join Now’ button. A box with fields for entering your first and last name, phone number, email address, and username and password will pop up. Fill it correctly and click on next.
The next page asks you for more personal information such as your date of birth, country of residence, home address and national tax number. At this point eToro will then send an SMS containing a unique code to your mobile phone. When prompted to do so on the registration page, you must enter the code to complete your registration.
Step 2 Upload ID
eToro’s regulatory rules apply to customers as well. Therefore, you will need to submit to the compulsory identity verification process. Although you can skip this step temporarily if you do not have all the documents you will need at the moment. But you will eventually have to come to finish it, otherwise, you will not be allowed to make deposits of more than $2,250 or make a withdrawal. Better complete it as soon as possible.
eToro will need digital copies of the national ID card or driver’s license, passport, bank account statement or utility bill issued in the last 3 months. Most often the documents for identity verification are processed right away and your identity is verified within minutes. That is because the platform uses automated technology for identity verification.
Step 3 Make A Deposit
You need to first fund your eToro account as the exchange does not offer direct Bitcoin purchases. You can send funds to the account via credit and debit cards, or third parties like Skrill, Sofort, PayPal, iDEAL and Rapid Transfer. For some specific countries, local bank transfers and international wire transfers. Apart from bank transfers, all other payment methods guarantee that the funds will reflect in your eToro account almost immediately.
Regardless of the payment, eToro charges just 0.5% as deposit fees. What’s more, if you reside in the US and are depositing funds in USD-backed methods, you don’t get charged transaction fees at all.
The minimum deposit required for deposit on eToro is $10 for US and UK residents. People in other countries can pay as little as $50 to $1,000.
Step 4 Search For Bitcoin
After successfully depositing, it’s time to buy Bitcoin. You can simply type “BTC” into the search box at the top of the page. The Bitcoin trade screen appears and then you click on the ‘Trade’ button to open up an order box. You should pick what order type you want at this point. If you are a non-U.S. customer, you can set a buy rate, stop-loss, and take profit upon opening the position, however, U.S. customers are limited to market orders.
Step 5: Buy Bitcoin
The final step is to buy Bitcoin by imputing the size of your stake into the ‘Amount’ box($10 minimum). Finally, click on the ‘Open Trade’ button to complete your investment.
How to Buy Bitcoin with Plus500
Step 1 Create An Account
Plus500 requires that you fill out an account opening form online. You will have to go through identity and address verification.
Step 2 Deposit Funds
You can only find your Plus500 trading account with fiat currency, however, there are various methods of payment available. You can deposit via credit/debit cards, bank wire options or e-wallets, such as PayPal, Skrill, and Neteller.
Regardless of what option you chose, the funds must be transferred from a source that bears your name, as 3rd party payment or anonymous funding are not accepted. With bank transfers, you have no deposit limit but debit or credit cards and e-wallets are limited.
Step 3 Trade
You can begin trading Bitcoin CFDs as soon as your Plus500 trading account has been funded.
How to Buy Bitcoin with Binance
Step 1 Sign Up on Binance
This first step is super easy, all you need is your email or phone number. You can register a Binance account from the Binance website, the App or the desktop App. There are no fees attached to this registration, it is absolutely free to open an account on Binance.
Note that this first step is for people who don’t already have an account with Binance.
Step 2 Identity Verification
Binance takes its KYC policy quite seriously. Before you can purchase cryptocurrency up to certain amounts you need to go through an identity verification process. Your current level of verification determines the trading limit placed on your account. Each verification milestone you complete increases your trading allowance. For example, you can only access the fiat deposit and withdrawal after verification.
Identity verification on Binance takes just a few minutes. To begin the verification process, click the ‘Get verified’ button on the homepage or user center of the app. You will be asked to select your country of residence, this is important as specific documents are compulsory for some countries and optional for others.
You will need to fill in your names, dob and upload pictures of your ID documents, you can use a driver’s license, passport or ID card. Make sure to indicate the country your ID documents were issued from the menu.
When you are done uploading the photos of your documents, you will be prompted to upload a selfie from existing photos on your phone or computer. After that, you will be asked to perform a face recognition exercise. You are advised not to wear glasses, hats or use filters.
Errors sometimes occur during the verification process so they allow up to 10 verification attempts per day. If your verification fails after all 10 trials, you should wait for 24 hours before you try again.
Step 3 Deposit Fiat (optional)
There are different methods of paying for Bitcoin on Binance. One of those is to go to the ‘deposits’ page and deposit fiat currency into your Binance account via bank transfer or cards. There are up to 50 fiat currencies accepted by Binance including EUR, BRL, and AUD.
After the deposit is done, you can use your cash balance on Binance to buy Bitcoin. The advantage of this method is that it helps you set aside dedicated funds for crypto trading and take timely advantage of buying opportunities.
Step 4 Make An Order
If you choose to skip step 3, you can proceed directly from step 2 to buying Bitcoin. You will find a list of cryptocurrencies on the home page or when you tap on the trading button. Select Bitcoin and enter the amount you want to buy in fiat value. The system will calculate the value according to real-time Bitcoin prices and show how much Bitcoin you will get for the price entered.
Alternatively, you can buy Bitcoin on Binance via Peer-to-Peer (P2P) trade, this means you are buying from crypto investors like yourself. To begin, you click on P2P trading on the homepage to enter the marketplace. You can either enter the amount of fiat currency you want to spend and wait to be matched with the best offers. Or you can manually sort through advertisements placed by other traders.
Step 5 Select Payment Method
To complete your Bitcoin purchase, you need to choose a payment method. To buy with your Binance cash balance you must have done step 3. If your cash balance is insufficient, you will be redirected to the ‘deposits’ page to top up your balance.
If you do not have a cash balance, you can choose to pay with a Visa or Mastercard credit or debit card.
Bitcoin price is highly volatile and subject to change at any time, so it is best to quickly confirm your order and pay within a minute or so. After a minute, your order will be recalculated by the system to give you Bitcoin at the most current price.
How to Buy Bitcoin with Coinbase
Step 1 Open A Coinbase Account
Obviously, you will need to sign up for a Coinbase account if you are completely new to the platform. This process is simple and quick, your email is enough to sign up. You can sign up via the Coinbase website or download the Coinbase app.
Step 2 Verify Your Account
You need to be at least 18 years old to use Coinbase. Apart from personal contact information, you need your social security number, a valid ID and proof of address depending on where you live. Identity verification on Coinbase may take more than a few minutes, it depends on where you live. As soon as verification is done, limitations on buying and selling cryptocurrencies are lifted off your account.
Step 3 Add A Payment Method
Now that you have a verified account it’s time to set up your preferred payment method. The options available include debit card, bank transfer, wire transfer, instant cashouts to bank accounts. You can also use Google pay, Apple pay and PayPal. Note that wire transfers and bank transfer payments take 1 to 3 days to process while the rest are instantly processed.
Coinbase will charge a transaction fee, 0.5% to 4.5% when you buy Bitcoin and your payment method will influence how much you are charged. Debit card payments attract a 3.99% fee while paying from a U.S. bank account or with a Coinbase wallet costs 1.49% of your purchase.
Step 4 Start A Trade
Once the payment method is decided and fixed, go to the homepage and search for Bitcoin. When it shows up in the results, tap on it and select “buy” from the options presented. Enter the amount you wish to purchase in your local currency and the app will automatically convert that into the current Bitcoin value.
Step 5 Finalize Your Purchase
To complete your transaction, tap on “Preview buy” and you will see details of your purchase. If everything looks good to you, confirm your purchase, the funds will be deducted via the payment method you have previously selected. Understand that Coinbase takes a cut of the purchase, so if you buy $5 worth of Bitcoin, 99 cents is Coinbase’s share of the transaction.
How to Buy Bitcoin with CEX.io
Step 1 Register On CEX.io
The registration stage requires more details than most. You will be asked to provide your email address, first and last names, date of birth, and country of residence.
Step 2 Verify your account
As a highly regulated crypto exchange platform, CEX.IO has high user verification standards. Only verified users can buy crypto on the platform.
A user who has completed identity verification can purchase Bitcoin instantly and gets a daily deposit limit of up to $3,000 and withdrawals of up to $10,000. The user also gets Skrill and Epay payment options. To be able to use the bank transfer payment option and increase your limits you will have to go through an address verification.
For identity verification, US residents must provide a Social Security Number in addition to a government-issued national ID card or driver’s license like everyone else. An international passport is also a general requirement. All documents must first be submitted as photos and then you must upload selfies with you holding those documents.
Step 3 Place An Order
To place the order for your Bitcoin, go to the ‘buy/sell page on the CEX.IO website or mobile app. Select Bitcoin and the fiat currency you wish to pay with from a drop-down list on that page. You will be presented with already prepared packs of Bitcoin in commonly purchased amounts. The set price for each pack is calculated using the current market rate and frozen for 120 seconds before it is up for recalculation. The freeze helps to mitigate the risks of Bitcoin price fluctuations.
You can select from any of the prepared packs or customize your purchase by entering any amount you wish. Note that the minimum amount you are allowed to purchase is 20 USD/EUR/GBP worth of Bitcoin. The calculated purchase amount already includes the commission for the service.
Step 4 Select A Payment Option
You can pay for your Bitcoin with a debit or credit card or your CEX.IO cash balance. Whichever method you decide on, you first need to connect your card to the account. The platform accepts Visa or MasterCard and you just need to provide the card number and expiry date. US residents need to provide their zip code and state while UK users will submit postcodes, addresses and a few other information. This card verification should only take 5 minutes.
To fund your CEX.IO account, go to the finance page and click the deposit button next to the currency you want your deposit to be in. You can make your deposit in any local currency and it will be converted to any of the USD, EUR, GBP, RUB options you select for deposit currency. Pay with your card and you have your deposit from which you can pay for your Bitcoin.
To pay via card, select a verified card as the payment method and enter the CVV or CVC code. Next is to accept the terms of purchase and click on buy now. The Bitcoin should show on your balance within a few seconds.
Bitcoin Buying Methods
You can buy Bitcoin using different platforms and different payment methods. Multiple buying methods give room for flexibility and ease of purchase. Briefly, we introduce some of the most popular methods below.
Buy Bitcoin with Bank Transfer
Bank transfers are one of the most popular ways to pay for Bitcoin. It’s convenient and gives some form of security as no sensitive account details are shared. It is almost quite fast and often comes with low charges. Read our “Buy Bitcoin with Bank Transfer ” guide to learn more.
Buy Bitcoin With Credit Card
You may not have enough personal funds to invest in Bitcoin and a credit card can come in handy. However, if you want to buy Bitcoin with credit card you should first ensure the exchange platform has no restrictions against credit card payments. Cash advance fees are also an issue.
Buy Bitcoin With Debit Card
Buying Bitcoin with a debit card is quick, easy and cheap. It is probably the most used Bitcoin buying method. If you want to buy Bitcoin with a debit card, consider the processing fee the exchange charges. The charges are different and may be cheap or costly depending on factors unique to the exchange.
Buy Bitcoin With Skrill
Skrill is a well-known online wallet that offers fast and secure money transfer services. The web wallet focuses on low-cost international money transfers and has lenient regulation requirements.
To buy Bitcoin with Skrill there are a few things you must know.
Bitcoin Trading Robots
Bitcoin is known to be extremely volatile. The price fluctuates so rapidly and unpredictably that an investor can go from earning profit to sustaining great losses in a matter of minutes.
One of the reasons for losses is the inability to take advantage of opportunity buys at any time, anywhere in the world. This could be due to time difference, unavailability or lack of timely information.
One solution technologists have come up with is the crypto robot. These bots make the process of buying and selling Bitcoin automatic and execute transactions on the behalf of human investors.
What Are Bitcoin Trading Robots
Bitcoin bots are trading automation software that buys and sells Bitcoin on behalf of someone at the right moments. The bot uses complex mechanisms and algorithms to scan multiple Bitcoin markets all at once, it reads signals and makes the best decisions on which trades to place to provide profit.
The chief reason for using Bitcoin bots is so that you get more profit and sustain fewer losses and risks. One of the more popular bots is arbitrage which takes advantage of price discrepancies across exchanges.
Why Bitcoin Robots
Although we live in a world where information moves digitally and with great speed, delays often arise. A 0.1 seconds delay can make an investor miss out on a trading opportunity. So one justification for the existence of Bitcoin bots is that traders aren’t always able to react quickly enough to price changes to take advantage of the optimal trades that are theoretically available.
Another reason is the physical limitations of humans. Even if they wanted to, human investors just can not give 24 hours, everyday day of the week to monitoring crypto markets. And due to the global nature of Bitcoin and continental time differences, round-the-clock monitoring of crypto exchanges all over the world is the optimal trading strategy. Humans need rest, food and they get involved with other activities that require their attention for extended periods. Bots don’t have to rest or do anything apart from trade.
Limitations of Bitcoin Bots
Many bots, even when operating correctly, provide only marginal returns on investment. Also, because they are relatively new inventions and hurriedly put out, many Bitcoin bots have design flaws.
However, Bitcoin bots are helpful if an investor understands how to best use the tool. For one, investors need to have proper accounts set up across multiple Bitcoin exchange platforms. Also, they must understand the algorithms that the bot works with. Using a Bitcoin bot does not absorb the Investor of all decision-making, it ultimately falls to the trader to decide whether to buy or sell.
A Bitcoin bot is not a get-rich-quick scheme for anyone. Investors that are not ready to put in the time and effort necessary to maximize bots for success will still find themselves at a loss.
BWCEvent aspires to share balanced and credible details on cryptocurrency, finance, trading, and stocks. Yet, we refrain from giving financial suggestions, urging users to engage in personal research and meticulous verification.