How to Buy Bitcoin in the US: In 3 Easy Steps
Let's face it, Bitcoin is all the craze around the world right now, and there are a couple of ways you can get hold of this digital currency. A few years back, Bitcoin mining was the most popular way of obtaining Bitcoins.
But as more and more Bitcoin is mined, the difficulty of mining Bitcoins has now become huge. And unless you have vast Bitcoin mining firms making incredible profits, mining Bitcoins is now almost out of the question.
That said, buying Bitcoins from exchanges has now become the other popular option.
Briefly, Bitcoin is not only the oldest but also the most prominent digital currency by market cap. The currency was first introduced in 2009 by the alias Satoshi Nakamoto.
Bitcoin presents a form of decentralized digital currency that's supposed to provide a viable alternative to traditional currencies.
That said, rather than dealing with a decentralized authority such as banks to process transactions, people with Bitcoins can transfer them to one another seamlessly through the peer-to-peer network.
Bitcoin transactions get tracked on the blockchain, where the miners verify transactions and update the blockchain.
The Step-by-Step Guide to Buying Bitcoin in the US
Buying Bitcoin in the USA is relatively straightforward. That said, follow these three simple steps.
Step #1: Choose a Bitcoin Wallet
Before you jump into buying Bitcoin, you first need to set up a digital wallet to safely store your coins.
Essentially, the Bitcoin wallet doesn't hold the coins but instead keeps private keys that you can use to access your public Bitcoin address and make transactions.
There is a wide range of wallets that you can choose from. That includes;
- Desktop Wallets; this kind of wallet can be easily downloaded to your desktop. You can then use it to store your private keys to your computer's hard drive. Some of the desktop wallets include Electrum and Exodus.
- Hardware Wallets; the hardware wallets give you highly secure offline or cold storage for your private keys. Some of the standard hardware wallets include; Ledger Nano S and Trezor.
- Mobile Wallets; the mobile wallets allow you to manage your Bitcoins from your iOS or Android device. Such mobile wallets include; Coinomi and Jaxx.
- Web Wallets; if you want to have easy online access to your Bitcoins, then a web wallet such as Blockchain wallet is the best choice for you.
- Paper Wallets; paper wallets have not yet become a popular option among Bitcoin holders, but with paper wallets, you get to print out your Bitcoin's private and public keys then using the paper as your wallet.
Step #2: Choosing a Bitcoin Exchange
After you have set up your Bitcoin wallet, the next thing is deciding where and how you acquire your Bitcoins.
There is a wide range of well-known Bitcoin brokers, but the best crypto exchange to buy Bitcoins in the US is Coinbase.
With that in mind, in this section, we will discuss a step-by-step guide on how to buy Bitcoin in the US using Coinbase.
So, What is Coinbase?
Coinbase is a popular cryptocurrency exchange based in the USA. Coinbase provides a platform for users to buy and sell various crypto coins.
Coinbase also remains one of the most used and secure exchanges in the market. Unlike most other crypto exchanges, Coinbase provides a wide range of altcoins that you can choose from.
In fact, Coinbase offers more than 25 cryptocurrencies for trading, staking, and investment. What's more, Coinbase comes with a straightforward user interface.
Coinbase also has a very short sign-up process, and you get to buy your Bitcoins in a matter of minutes. That said, let's take a look at the guide on buying Bitcoins on Coinbase.
Creating your Coinbase Account
- Create your account at Coinbase.com
Coinbase has, for years, been the go-to cryptocurrency exchange for buying Bitcoin in the US, and that's for a good reason. It's relatively easy and straightforward to create your account on Coinbase. You will get your account up and running in just a few minutes. All you need is to enter your name, email, and password for the sign-up process.
Click the link below to go directly to their sign up page.
Step #3: Buying your Bitcoin
Once you have completed the sign-up process and your account is secure, you need to add your desired payment method to your account.
On the Coinbase website, you can add your desired payment method by tapping on the 'Add payment method' button for the first time.
That will launch you to an interface where you will enter your payment method details.
You can link your debit card and bank account. With the bank account, you will access a higher buying limit of $25,000.
However, your purchases will always be on hold for a few days before they are processed. As for the debit card, you will get instant access to the purchase, but you will have a buying limit of $3,000.
After adding your payment method, click on the 'Buy crypto' button.
You will be taken to a new page, just select Bitcoin as the currency you'd like to purchase, choose your desired payment method and how much Bitcoin you'd like to purchase.
You will be charged a fee for your transaction. The cost will vary depending on how much Bitcoin you buy.
To complete your transaction, tap on the 'Buy Now' button.
To buy at the current Bitcoin price, you need to move fast; otherwise, the purchase might fail as soon as the exchange range changes.
Coinbase Fees and Costs
Coinbase used to be one of the most popular brokers worldwide, but currently, it stands as the most expensive broker.
That's because the fees are very high at the moment.
Some traders find it easier to use other brokers that may require you to pay a fee of only 0.25% and have more diversity in their payment methods.
At Coinbase, you can make real-time payments with your credit card, although the fees tend to vary from one country to the other and the payment method. In the USA, the withdrawal fees with a credit or debit card range at 3.99% and up to 1.5% for the instant card withdrawals and a minimum of $0.55.
The US wire transfer fees are $10 and $25 for the outgoing wire transfer.
Pros & Cons of Coinbase
Coinbase is undoubtedly one of the best exchanges in the world, but what sets them apart from an average exchange? Let's have a look!
Pros of Using Coinbase
- Coinbase comes with a user-friendly interface.
- It comes with an all-in-one feature from the purchases to the sale and cold stage of your coins.
- It is a reputable broker in the crypto world.
- The cold storage wallets are covered in the Coinbase insurance.
- You get instant transfers between the Coinbase users.
- Coinbase offers a wide range of fiat withdrawal and deposit options.
- The platform comes with a 2-factor authentication and multi-signature security systems.
Cons of Using Coinbase
- As much as the platform is user friendly, that comes at a price; the platform is costly.
- The waiting line for the customer support team is usually long.
- Most of the time, local payment methods are not supported.
- When you use Coinbase, your data is available on the American server.
Is Coinbase Safe?
Coinbase is the first broker in the cryptocurrency world to reach more than 30 million users.
The number is always increasing tremendously by the day. The services of this Crypto broker are becoming more popular, and currently, Coinbase is active in over 100 countries.
Coinbase has become the go-to choice for most traders because, with this broker, you get full control of buying and selling the coins and storing your coins.
These features are owing to the success of Coinbase. And the fact that the platform is fully accessible on iOS and Android devices, that's a plus.
Different Types of Cryptocurrency Exchanges Explained
There are currently many exchanges worldwide, and we can separate them into three subcategories; bitcoin brokers, cryptocurrency trading platforms, and peer-to-peer Bitcoin exchanges.
Currently, Bitcoin brokers offer not only the easiest but also the quickest way to acquire Bitcoin.
The good thing with Bitcoin brokers is that they allow you to pay for your digital currencies with fiat currencies such as USD.
What's more, these brokers offer user-friendly platforms where you can buy Bitcoin using standard methods such as bank transfers or credit cards.
However, the brokers tend to have higher fees as compared to the other options.
The Crypto Trading Platforms
With the cryptocurrency trading platforms, you can buy Bitcoins using other cryptocurrencies. Such platforms include Huobi that offer relatively lower fees as compared to the Brokers.
Also, the cryptocurrency trading platforms opens you up to a broader range of coins. All in all, with the crypto-trading platforms, you need to be already a holder of other coins. Therefore, this option is not ideal for beginners.
The Peer-to-Peer Bitcoin Exchanges
Over the years, the peer-to-peer Bitcoin exchanges have helped cut out intermediaries, assisting the user's trade with each other directly.
On the peer-to-peer exchanges, the seller gets the freedom to specify their prices and state their preferred payment methods. This is a trading method that helps you to trade with complete privacy.
The only problem is that you may have to settle for higher prices with the peer-to-peer exchange platforms than the current exchange rate in the market.
The most common peer-to-peer exchange for bitcoins is Local bitcoins.
Factors to Consider When Choosing a Bitcoin Exchange
There is a wide range of Bitcoin exchanges that you can choose from, and that is why finding the best can be such a hassle.
To make the process lighter on you, we have come up with a list of factors you need to pay attention to before choosing your ideal cryptocurrency exchange platform.
Before you jump in and choose a cryptocurrency exchange platform, you need to consider its security features. Some of the everyday things that you need to consider include two-factor authentication and PGP encrypted emails. Also, you want to make sure that the exchange has never been linked to any suspicious activity. You may also keep track of the exchange's history with hack attacks.
- FeesThis is something that most people tend to overlook, but it's essential to find out the fees you are likely to be charged per transaction before you jump aboard. The fees tend to vary depending on the platform you choose. Some of the standard fees you are likely to be charged include transaction fees, trading fees, withdrawal, and deposit fees.
- ReputationBefore you register on a cryptocurrency exchange platform, you also want to research the platform's reputation. You can check the online reviews, as well as the Bitcoin forums. Here you can check the kind of experiences that other users have had with the platform.
- Customer Support If you have a problem navigating a particular cryptocurrency exchange platform, will you be assisted, or you'll have to wait for hours before you get someone to attend to you? This is also another essential thing that you need to check before choosing an exchange platform. You can also check the available contact methods and how fast you can get assisted by the customer support team.
- Regulations of the Exchange and Location While the rules surrounding the digital currency exchange platforms are becoming more transparent in the US, we can't say the same for all other overseas countries' exchanges. That is why before you choose an exchange, you also need to do your research and find out where the exchange is based and the country's regulatory environment. That is something that will help you work out if the exchange is suitable for your needs.
- Transaction Limits When choosing a cryptocurrency exchange platform, you need to identify the transaction limits the platform offers. Identify those maximum and minimum limits or the Bitcoin you purchase. On the same note, you need to be sure if the platform restricts the amount you can withdraw in one transaction or within 24 hours.
- The Supported Currencies Bitcoin is the most significant digital currency in the world right now. That means that Bitcoin can be easily bought and sold on the big platforms. But in cases where you want to purchase other currencies besides Bitcoin, you need to be sure that the exchange platform offers other coins through the platform.
Payment Methods to Buy Bitcoin in the US
Generally, there are many ways in which you can buy your Bitcoins. Each of these ways comes with its own pros and cons.
That said, in this section, we will discuss some of the most popular forms of buying Bitcoins as well as their pros and cons.
Buying Bitcoin with a Credit or Debit Card
Some exchanges will accept credit card payments. However, most of the central banks in the USA have banned crypto purchases using credit cards. Such banks include; Citibank, Capital One, Bank of America, JP Morgan Chase, Wells Fargo, and Discover.
Although debit cards are far from being banned, they are not as nearly acceptable as credit cards.
That said, if you want to purchase your Bitcoins using your credit card or debit card, you need to do your homework and discover which banks allow crypto purchases. The good thing is that you can buy Bitcoin in the US using credit and debit cards from cryptocurrency brokers, cryptocurrency exchanges, and peer-to-peer exchanges.
The only downside is that the process of purchasing cryptocurrency using credit and debit cards may seem a little overwhelming for complete beginners.
Buying Bitcoin with Cash
Do you have some cash that you would like to turn to cryptocurrency? Well, there are a couple of ways you can buy Bitcoin with cash in the US. You can start by finding a seller who accepts cash from peer-to-peer cryptocurrency exchange platforms.
Also, you can consider loading a pre-paid card with some cash then using it to buy Bitcoin.
There are a couple of websites, such as Paxful and Bitit, that accept the pre-paid cards. Another viable option is finding a Bitcoin ATM and then depositing your cash, which will be converted to BTC.
You may also find a cryptocurrency broker that accepts cash deposits. And an excellent example of that is Coinbase.
Lastly, you can consider buying your Bitcoins from an exchange that allows you to deposit funds into the account through a money transfer service like Money Gram and Western Union.
Although buying Bitcoins with cash might be the easiest and straightforward option, it tends to be a bit expensive than the other options.
Buying Bitcoin with your Bank Account
Another option for buying Bitcoin in the US is choosing a platform that will accept bank transfer deposits. There is a list of platforms that allow bank transfers. With this option, you are required to deposit funds using your bank account.
The good thing is that this will not attract any fees. However, you may have to wait at least 2-3 days before the funds are cleared to your exchange account.
That said, despite the bank account payment method you choose, pay attention to;
- Fees the Bitcoin exchange or broker charge
- Set transaction limits
- How long it takes for the funds to be cleared in the bank account
Buying Bitcoin with other Cryptocurrencies
As we mentioned earlier, there is a wide range of ways in which you can buy Bitcoin. Another viable option is exchanging one cryptocurrency for another. And Bitcoin is one of the most popular trading pairs on most cryptocurrency exchange platforms. Therefore, you can easily exchange other cryptos for BTC.
All you need to do is find an exchange that seems to fulfill your needs. What's more, you will need to list down your trading pairs then compare the pros and cons. As soon as you find a suitable exchange platform, you can follow these steps to acquire your Bitcoins;
- Register your account on the exchange.
- Enable the two-factor authentication.
- Click on the deposit funds option on the platform.
- Go ahead and select the digital currency you would like to deposit, then copy the wallet address.
- Using your external wallet, transfer the digital currencies into your account.
- Proceed and click on the 'Exchange' button.
- Search your trading pair.
- Choose your market limit order.
- Enter the amount of Bitcoin you'd like to purchase.
- Review the details of the transaction, then proceed and make the purchase.
However, you must understand that this process tends to vary from one platform to another.
Buying Bitcoin Directly with PayPal
Another option that you have for buying Bitcoin is by using PayPal.
Although it's a great option, the bad news is that very few platforms actually accept purchases through PayPal.
The good news is that PayPal is one of the easiest ways to buy Bitcoin, mainly if you have used PayPal to purchase something else online.
On top of that, you need to look around for platforms that accept PayPal and be fully aware of the fees if the platform doesn't support payments using USD.
Buying Bitcoin Anonymously
Buying Bitcoin in the US is relatively easy. However, most exchange platforms will require you first to verify your identity.
But if you are the kind of person who values their privacy, don't worry, as you can still buy your Bitcoin anonymously.
Some of the right options for purchasing your Bitcoin anonymously in the US include;
- Trading directly with a seller on peer-to-peer platforms like Local bitcoins
- Through the Bitcoin ATMs, you can deposit your cash anonymously. The good thing is that your cash gets automatically converted to BTC, which allows you to transfer the BTCs to your wallet.
- Purchasing Bitcoins with a pre-paid cash or credit card doesn't require any ID verifications.
- Trading your altcoins for Bitcoins on the exchange platforms is another option that does not require you to verify your identity.
Well, now, there you have it! Buying Bitcoin in the US is such a straightforward process, especially with a cryptocurrency exchange such as Coinbase.
The number of exchanges and merchants who are accepting Bitcoin is growing every day.
Therefore, we can expect the Bitcoin market to continue to evolve as Bitcoin continues to be accepted as an alternative digital currency to fiat.
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