With everyone talking about it, you’re likely considering a Bitcoin cryptocurrency acquisition. The good news is that there are multiple ways to acquire the cryptocurrency. On the other hand, the crypto market carries various risks, so you will need to be careful.
This Bitcoin buying tutorial is meant to show you the best options to make a secure Bitcoin purchase. We will also show you how to store your coins and how you can use them.
What Is Bitcoin?
The shortest answer is that Bitcoin is a digital currency. That means it is equivalent to actual money in your bank account, except that it is not physical. Nevertheless, it has real value and can be used to pay for goods and services, both online and in physical outlets.
The other thing to note is the blockchain. Unlike the traditional financial banking system, the blockchain involves a network of computers that facilitate the creation and transfer of Bitcoins. The blockchain is thus not controlled by any single entity but is instead decentralized.
How to Buy Bitcoin?
There are many Bitcoin purchase methods to use, but the easiest and safest is through a Bitcoin exchange. One of the top exchanges is eToro, a company that is present in most Western countries and currently has over 30 million users.
eToro can be accessed on mobile and desktop, but in this guide, we’re going to demonstrate the Bitcoin platform purchase on the latter.
Step 1: Sign Up For An eToro Account
Visit the official eToro website and click on ‘Join eToro’. On the next page, you will be asked to enter your email address, username, and new password. Click on the checkboxes to indicate that you agree with the platform’s terms of service.
Note that you may be signed up to a different subsidiary of eToro depending on your location. Each subsidiary serves a different region and some of the trading conditions may differ based on local regulations.
Step 2: Verify Your Account
Regulations dictate that eToro verifies its users’ identities (KYC). So, you will be asked to upload an image of an identity card (passport, national ID, or driver’s license) to prove your identity. Then another one proving your address (utility bill or bank statement) for the appropriate local regulations to apply.
Step 3: Find Bitcoin (BTC) on eToro
From the eToro search bar at the top of the page, search for Bitcoin and select the correct option to reveal more details about it. Here, you can analyze the price and performance of the coin. eToro also offers other insights such as recent and relevant news as well as research from experts.
Step 4: Buy Bitcoin (BTC)
Click on ‘Trade’ to reveal the trade order window. Here, enter the amount you wish to spend on your purchase along with other conditions like the stop loss and take profit. In some jurisdictions, leverage may also be available, but using it means purchasing Bitcoin as a CFD. A CFD is a derivative product that mimics the price performance of Bitcoin on your trading balance, but you won’t actually own the cryptocurrency.
You should now have Bitcoin in your eToro account and can thereafter monitor the performance of your investment.
Where to Buy Bitcoin?
Crypto exchanges are the best options when you want to purchase Bitcoin online, but only if you pick the right one. CoinMarketCap reports that nearly 800 exchanges are currently active at the time of writing, but here are our top 3 picks.
eToro
As mentioned in the previous section, eToro is wildly popular among investors. One of the reasons for this is security, since the company has been active since 2007. The other reason is because, as we have demonstrated in the above Bitcoin buying guide, it is very easy to use.
As a trader, you will also get other perks such as free access to social trading features and efficient trading conditions.
- Trusted, secure, well-regulated platform
- Social trading with millions of users
- Over 80 cryptocurrencies to buy
- Access to other markets: stocks, forex, ETFs, etc.
- Easy-to-use platform with advanced trading features
- Limited range of cryptocurrencies
- High transaction fees on crypto transfers
OKX
OKX is the alternative for a more active trader that needs more flexibility. For one, you can buy and trade hundreds of cryptocurrencies at very low fees. Moreover, OKX has many other crypto services including futures, options, staking, NFTs, and access to Web3 (dApps).
OKX
- User-friendly interface
- Customizable wallet
- Advanced chart analysis
OKX
Perhaps the only downside is that OKX is not available to US residents. But the rest of the world is free to use this also well-established platform that constantly ranks highly among other crypto exchanges.
- One of the top crypto platforms
- Over 300 listed cryptocurrencies
- Advanced trading platform for professionals
- Low trading fees
- Multiple crypto features
- Not available in the US
- Limited payment options
Bybit
We would recommend Bybit to crypto enthusiasts who like to explore a variety of cryptos. Aside from being popular, Bybit lists many more coins than other exchanges. They may include altcoins with a lower market cap, but they present unique opportunities.
ByBit
- Wide range of investment products
- Transparent platform
- Free demo account
ByBit
It is regulated in 3 jurisdictions, but US residents cannot use it. Besides this, you get plenty of perks such as bonuses and the Bybit debit card. The card lets you spend crypto without having to withdraw your holdings.
- Popular exchange with over 40 million users
- Excellent 24/7 customer support
- Wide range of cryptocurrencies
- Automated trading by copy trading and trading bots
- Platform may be a bit daunting for beginners
- Not regulated in the US
Alternative Ways Of Buying Bitcoin
Besides the above Bitcoin transaction methods, you can also get the coin through other methods. Keep in mind that these may not be recommended to beginners.
Peer-to-peer (P2P) Exchanges
These are crypto exchanges that simply act as an intermediary between buyers and sellers. They do not hold any cryptocurrencies like conventional exchanges do, but they usually provide an escrow service to ensure safer transactions.
To facilitate the trade, sellers publish posts detailing which cryptos they hold and the price they are willing to accept. Then potential buyers can look through these posts and choose a seller of their choice.
Decentralized Exchanges (DEXes)
DEXes don’t hold cryptos either, but unlike P2P exchanges, they utilize a pool of cryptos provided by investors. The investors stake Bitcoin in the DEX to create a pool of available BTC for potential buyers. In return, investors earn interest from the fees that buyers are charged.
The main advantage of DEXes is that they are decentralized and don’t require users to sign up. This anonymity can be an advantage for you if you prefer to keep yourself and your transactions private.
Bitcoin CFDs
A CFD is a derivative financial product, meaning that it doesn’t involve the trade of an actual product. Instead, a crypto platform will track the value of an underlying asset, in this case, Bitcoin. By investing in the Bitcoin CFD, therefore, your investment mimics that of actual BTC.
CFDs have an advantage in that you’re able to buy and sell the asset, that way making a profit even when prices trend downwards. Moreover, CFDs can have leverage, wherein you can make trades worth more than the capital in your account. However, using leverage increases the risk.
Bitcoin ATMs
When you need to make a quick and anonymous Bitcoin purchase, check out one of the 38,000 Bitcoin ATMs around. It is a physical booth similar to a traditional ATM, into which you can deposit cash and buy Bitcoin instantly.
It’s quick and straightforward, but they typically charge higher fees. Yet, the biggest challenge is locating one, since most countries don’t have them.
Why Buy Bitcoin?
- It’s a digital currency: Satoshi Nakamoto’s vision was to create a currency that isn’t controlled by banks or governments, allowing users to transact directly with low fees and no restrictions
- High ROI investment: the price of Bitcoin has skyrocketed way faster than any other financial investment. In the future, it shows promise to continue delivering higher ROI albeit at a higher risk
- Globally accepted: Bitcoin can be used for shopping worldwide. Plus, it is becoming increasingly accepted even by authorities with the launch of the Bitcoin ETF and publicly listed Bitcoin mining companies
- Store of value: Bitcoin has been designed to increase in value, thereby becoming a valuable hedge against inflation
Are There Risks to Buying Bitcoin?
- Price volatility: the price of Bitcoin is highly volatile and can rise or dip by large fluctuations in brief periods. This makes it unattractive when investing for, say, retirement, where security is paramount
- Crypto hacks: Bitcoin wallets and platforms have been known to be hacked, with users losing their holdings. The risks can be minimized but not completely eliminated
- Accidental loss: losing your private key means permanent loss of your holdings, with no recourse to recover the Bitcoin
What Can You Do With Your New Bitcoin?
Now that you have used our Bitcoin acquisition tips, what good can it be to hold BTC?
- Hodl (hold): simply leave your BTC in the wallet and wait for its value to rise. Experts predict further rise over the coming years
- Remittances: Bitcoin transactions don’t have a lower limit, meaning that you can send micropayments globally at very low fees
- Invest: lending allows you to invest your BTC without having to sell first. This is where you lock up your BTC in a liquidity pool and receive interest as high as 5% APY
- Swap/Trade: for advanced users, crypto trading can be a great way to earn consistent profit by predicting future price fluctuations
Where to Store Your New Bitcoins
Digital currencies can only be stored in crypto wallets, but these come in different forms for different purposes:
- Custodial wallets: these are wallets managed by a third party, usually a crypto exchange. They can be mobile or web-based, but the idea is to let the custodian manage your private keys. The custodian is thus responsible for security, but they provide easier usability
- Non-custodial wallets: as the name suggests, you store your private keys. It can be as simple as a piece of paper or as sophisticated as a hardware wallet, but the idea is to keep total control over your crypto assets.
Conclusion
We hope the Bitcoin buying tips illustrated here will help you buy your first BTC. Since its launch in 2008, this cryptocurrency has revolutionized the financial industry. More is still to come as the industry grows, so you’re already on the right path with this Bitcoin acquisition.