Bitcoin has become an iconic and enduring crypto currency. In the past 12 months it has reached a high level of media coverage, with the first Bitcoin ETF, followed up by an impressive amount of institutional funds moving into the digital asset.
Some of the most significant Bitcoin price movements have happened just as recently as November 2021. Bitcoin has been viewed as an interesting topic in the last two decades but for many, the topic of how to buy bitcoin is as relevant today as it was back then.
It is this decentralization, and innovation that has caused in part many to be enthusiastic and curious about how to buy bitcoin online; and in no small part due to the rapid rise in price that has been seen in the leading cryptocurrency of our time.
In this guide, we will break down some simple steps on how to buy bitcoin, as well as some of the crypto wallets used to secure your bitcoin purchase after that first step has been made.
5 Simple Steps For How To Buy Bitcoin
- Choose a cryptocurrency exchange or broker you would like to use.
- Approve the account
- Choose a payment method
- Fund your account
- Place an order to buy Bitcoin
Completing the full process highlighted above can be done in as short as a couple of minutes, with your Bitcoin purchase fully wrapped up in the time it takes to drip a coffee.
As choosing the right crypto exchange or broker can be by far the most time consuming, we have helpfully put together a list of the best place to buy bitcoin in multiple Countries. These various local nuances can be rather frustrating in terms of crypto exchange support. Feel free to take a look and make sure that your preferred choice is supported.
Then you will find each of the steps on how to buy bitcoin broken down in more detail below if you remain curious for more.
How To Buy Bitcoin Where You Are
How To Buy Bitcoin Explained In More Detail
Choose one of the best bitcoin exchanges or crypto trading platforms
A Bitcoin purchase requires identifying a crypto provider (exchange/broker) for your needs. Typically the best place to buy Cryptocurrencies is one of the crypto exchanges. Compared to other cryptocurrencies, Bitcoin investors have the easiest task due to almost all crypto exchanges providing access to the biggest of digital currencies.
There are not a list of dedicated bitcoins exchanges, more so a list of the best cryptocurrency exchanges; almost all of which make it easy for you to buy Bitcoin. Buying and selling bitcoin is easy with most cryptocurrency exchanges but there are some differences between centralized vs decentralized exchanges that you may want to be aware of.
If you are interesting in trading Bitcoin, then you can do so through certain cryptocurrency exchanges; but with most doing so through crypto brokerage accounts. These crypto brokers provide access to cryptocurrency CFD trading, and other leveraged crypto investing such as futures, or now Bitcoin ETFs.
We have highlighted a list here of some of the best crypto exchanges and crypto brokerage accounts for you to consider. Once you have activated an account, you will be able to engage in buying and selling bitcoin from one of your bitcoin addresses. You will however need to load funds into your account.
Connect your bitcoin exchange account to a payment option
Usually before you are able to buy bitcoin, you are required to provide certain documentation, the same way you would with any account opening. Depending on the particular crypto platform you have decided on for your bitcoin purchase, they may contain photographs from a driver’s license or Social Security card.
You may have different requirements depending of where you live but usually this is very straight forward and complete in a matter of minutes. The procedure is almost identical to that for the opening of an average brokerage account.
Once the account is confirmed as ready, you can then select your preferred payment method and load fiat currency. Most bitcoin purchases can be made from a debit card account instantly, but this will depend on your preference. You can choose to deposit funds into your crypto exchange account with local bank transfer; or online wallets such as Skrill, or Paypal account.
Once your deposit is accepted and in your crypto account, you can go ahead and make that Bitcoin investment.
Place your Bitcoin order
You can buy bitcoin (or any supported cryptocurrency) immediately once you have the funds in your crypto exchange account. Making an order is usually as simple as just pressing the ‘buy’ button but there are a couple of things you may wish to consider in order to get the best ‘fill’.
As crypto exchanges are completing buy orders at the best possible price at that exact moment, that is not necessarily the price that you would want to buy bitcoin for. So in the case where you have either a predefined price in mind, or you just do not want to risk getting a ‘bad fill’; consider setting a limit buy.
What this will do is only fill your order, or complete your bitcoin purchase if the exchange can complete the deal for the price you set. If it cannot fill your order, the buy order will remain open until you close or cancel it. This will allow you to buy bitcoin at a predefined price, as long as the digital asset hits that price that is!
If you choose a ‘market buy’, the platform will just match your order with the lowest agreeable seller. In all transactions there will be both a buyer, and a seller, and particularly during more volatile times, the price can change rather rapidly in the space of a few short seconds.
When you go on to sell bitcoin, you can use the same process in reverse with a ‘limit sell’ order. This will ensure again that you only sell bitcoin at the price you want, and not the price that someone is prepared to offer at that exact moment in time.
You can usually set your order to buy either in a fiat amount (if the crypto broker or exchange supports holding fiat), or directly the amount of bitcoin that you wish to buy. Many platforms will have no limit bitcoin purchases, so you can effectively buy as much or as little as you would like. Other trading platforms will have minimum values that you can buy or sell, that is usually around $100-$200 worth of bitcoin as a maximum minimum purchase.
Bitcoin Wallets – What To Know After You Buy Bitcoins
If you want to own bitcoin, there are a few ways to go about it. You can buy bitcoin, or you can get paid in bitcoin in exchange for goods or services. Either way, you’ll need to store your bitcoin somewhere.
That’s where a bitcoin wallet comes in.
What Is A Bitcoin Wallet?
A bitcoin wallet is simply a digital storage space for your bitcoin. You can think of it like an electronic bank account, where you can hold your bitcoin and make transactions with other users.
When you want to buy or sell Bitcoin, this transaction would either add or remove Bitcoin from your wallet in a similar way to a cash transaction would. There are different types of wallets, but the most common are hot wallets and cold wallets.
Hot wallets are connected to the internet and are therefore more vulnerable to hacking attacks. However, they’re also more convenient to use because you can access them from anywhere in the world. Cold wallets are offline and therefore more secure, but they can be a bit more difficult to use.
You can get a hot wallet by setting up an account with a bitcoin exchange or online wallet service. Some popular hot wallets include Coinbase, Crypto com, and Binance; but there are now many. You can also create your own Bitcoin hot wallet using software like Electrum or Bitcoin Core but this is largely unnecessary.
Cold wallets are usually physical devices that look like USB drives or other storage devices. They’re not connected to the internet, so they’re much more secure against hacking attacks. However, this also means that you can’t access your cold wallet from anywhere in the world. Some popular cold wallets include the Trezor and Ledger Nano S.
How To Use A Bitcoin Wallet
Once you have a wallet, you can use it to store your bitcoin, make transactions, and even buy goods and services. Bitcoin is still a relatively new technology, so there are not yet many places that accept it as payment. However, this is changing rapidly, and more and more businesses are beginning to accept bitcoin every day.
If you take your first steps to buy Bitcoin with an exchange that offers both a hot wallet and a debit card, then you can in fact use your cryptocurrency in almost all stores that is linked up via Via or Mastercard and instantly converted upon a transaction being made. This can be potentially game changing for cryptocurrency user adoption and real world usage.
If you’re interested in owning bitcoin, then the first step is to get yourself a wallet or open an account with a crypto broker, or cryptocurrency exchange. By doing so, you’ll be able to store your bitcoin safely and securely, and make transactions with other users around the world.
How To Store Bitcoin Safely
Bitcoin cold wallets
Cold wallets are generally described as being unrestricted by their connection to the Internet, so are less likely to be compromised.
These wallets are often known as offline wallets or hardware wallets. This wallet stores a user’s personal data in something that has been unconnected to the internet and can be supplied with software that can work together to allow the user to see their portfolio.
Cryptocurrencies can be stored offline through a paper wallet. Paper wallets are digital wallets created through certain websites. The system generates public or private keys you can print out on the sheet.
Bitcoin hot wallets
The online crypto wallet is also called a Hot wallet. Hot wallets are wallets which work on computer networks, smartphones or tablets. They can be either directly provided by a cryptocurrency exchange automatically, or a separate piece of software that acts as an extension or plugin on your browser.
Certain specific hot wallets are required to interact with decentralized exchanges, and this can vary depending on the network. Bitcoin is ubiquitous in the digital asset world and with most of the major wallets and exchanges so support is not difficult to find.
Having a hot wallet generate a key to your coins on an Internet-enabled device could create vulnerabilities. While the hot wallet is convenient and allows quick and simple access to the contents in your accounts, the ability of making transactions on your account is more prone to hackers.
Deciding To Trade or Buy Bitcoin
How To Trade Bitcoin – Active investing, Long and short positions
Active investors and Bitcoin traders have a more complex method than most of us. They love volatility and use large fluctuations for quick returns.
This type of cryptocurrency trader buys, sells and trades often in hopes of making a profit. These positions can be open for a few minutes, a few hours, or even fractions of seconds in the case of scalping.
Many of those who trade Bitcoin do so using technical analysis and charts. This will also usually take place with a cryptocurrency CFD trading broker or futures trading platform as opposed to an exchange. That being said, there are a few hybrid crypto exchanges that allow you to both buy cryptocurrency with a traditional exchange interface along with a crypto trading platform.
Most often, bitcoin traders buy cryptocurrencies when they see a value or trend that is out of sync with usual patterns and either ride a trend, or take an alternative view. Both positions involve extreme risk, requiring the investors’ efforts to forecast markets, which can be hard for most experienced investors.
Passive investing: Buy Bitcoin and ‘Hodl’
Bitcoin hodlers are primarily passive investing investors who hold on to their Bitcoin and hope it will continue to grow. Hodl for those not yet familiar stands for ‘hold on for dear life’.
The average bitcoin investor will take a longer term view on their portfolio and may not sell a position for years. If you are a long term Bitcoin investor it is likely that you have a real belief in the underlying technology and potential, and are happy to make a profit along the way.
Although Bitcoin may not provide protection as an investment due to its’ volatile nature, things are changing rapidly. User adoption, real use cases, and intitutional investment are all key components for taking Bitcoin from what was a fringe asset just a matter of years ago, into a a digital asset that rivals the biggest commodities.
While passive bitcoin investing still holds risk, it is certainly a safer way to invest than via leverage and CFDs due to the exposure being more limited.
How To Buy Bitcoin FAQs
Can I purchase $100 of Bitcoin?
It’s easy to invest $100 in cryptocurrency using cryptocurrencies such as Coinbase. The exchange acts as an intermediary between the buyer and the asset you are trying to buy, and allows investors to use cryptocurrency.
How Do Beginners Buy Bitcoins?
Many beginners wondering how to buy bitcoins often end up with one of eToro, Coinbase, or Binance as a platform. Each of which will do a good job in simplifying the process, which remains the same regardless of how advanced you are. You can visit the full section which runs through the steps above for you with step by step processes; it should only take a few minutes.
Once you know how to buy bitcoins, you then only need to choose whether you would like to buy bitcoin directly with credit card or debit card; or if you would prefer to proceed with a different payment method.