Buy Bitcoin - Guide to Buying BTC
First cryptocurrency buying guide
Bitcoin (BTC) was the first cryptocurrency ever created and is still the most valuable in the market today. As the groundbreaking digital asset has matured over the years, it has stabilized somewhat in terms of volatility but is a huge draw for both short and long term traders due to the deflationary and safe nature of its design.
In this report, we will endeavour to address your concerns and uncertainties so that you can enter the cryptocurrency world with knowledge, understanding and confidence. We will provide the latest information, tips, and steps on how to buy Bitcoin.
Buy Bitcoin instantly in 5 steps!
- Visit the platform we recommend for buying Bitcoin.
- Fill in all the requested information and open an account.
- Capitalize your account with your preferred payment method and confirm your account balance.
- Select Bitcoin and click "Instant / Market Order" to buy your coins instantly.
- Enter the amount (you'll see the equivalent in BTC) and confirm your purchase.
Our recommended platform to buy Bitcoin
Reading this guide to learn how to buy Bitcoin will get you all the information you might need by the bottom of the page. However, you may already be familiar with most of these processes and just need a helping hand to point in the direction in which to buy Bitcoin.
To save you time, we've selected one of the top platforms to buy Bitcoin on so you can skip ahead and dive right in.
Where can you buy Bitcoin in 2021?
There are more ways to benefit from cryptocurrencies than actually buying Bitcoin and storing it in a wallet. Trading the price movement of Bitcoin via a CFD (Contract for Difference) is a very lucrative approach for many experienced traders. Futures trading also allows you to set a price to be realized at some point in the future and make profits based on the accuracy of your forecast.
Because of this, it is important to have a strategy in mind before buying your cryptocurrency. Setting specific goals in the short or long term is your decision on what type of platform you want to apply Bitcoin to.
For those of you who believe that Bitcoin will appreciate in value in the future and have no plans to sell the investment in the short or even medium-term, an exchange is better suited to meet your needs. Exchange offers you the opportunity to buy and even store your Bitcoin over a long period of time.
You will always receive a wallet on the platform at the exchanges. Storing cryptocurrency here does not incur any costs and offers a high level of convenience. However, these integrated wallets are not subject to custody and are therefore vulnerable if the platform is attacked or goes bankrupt. Therefore, it is important that you choose a reputable and regulated exchange that is more secure.
If you want to buy Bitcoin and hold onto it for a year or more, it is advisable to withdraw the money from the exchange to your private wallet. Details on how to download a software wallet and instructions on how to transfer your BTC can be found later in this article.
For those of you looking for quicker returns, you are far better suited to a reputable online broker where you can get a CFD or futures contract. This is where you can invest in Bitcoin's price movement without having to buy and store the underlying asset (some select brokers are a step ahead with the ability to buy and hold real bitcoins).
Any retailer looking to take this approach should make sure they understand the mechanisms involved and properly set their risk management boundaries.
Buy bitcoin through a broker
Choosing the right broker is critical to the success of your Bitcoin investment. There are many online broker platforms to choose from, but not all are regulated. As with any online platform, a particular broker's reputation is well-publicized and the history of the company is provided to you. User references can also provide you with some insight to help you choose a broker that you can feel confident with.
When choosing a platform, factors such as a simple, effective user interface, security, and other unique selling points should be considered.
1. Register with the broker
Registering an account is a very quick and easy process. With ETFinance all you have to do is choose a username, enter your email address and choose a secure password. Your password protects your account and should contain 6-20 characters with at least one uppercase letter, number or symbol. Some brokers also offer the option to sign in with an existing Facebook or Google account to make the process even easier.
2. Check your identity (KYC process)
The documents required to verify your identity depend on the broker you choose. Brokers can take an average of up to 24 hours to review, but the process is usually automated and much faster.
Regardless of which broker you choose - if they are reputable and regulated - you will need to go through a standard KYC (Know Your Customer) process. This includes presenting an official ID such as a passport or driver's license, proof of residence and possibly even proof of income. This approach may feel a bit boring, but it ultimately provides better protection for both you and the broker.
AML and KYC regulations are essential for the mass adoption of crypto. The more companies are encouraged to implement these, the more positive the impact will be not only on Bitcoin but on the entire cryptocurrency industry. This also helps to secure your funds even further as withdrawals are only allowed for payment methods owned by the user.
3. Deposit funds using your preferred payment method
After you've chosen the broker that's right for you and checked your account, you can choose from a number of payment methods to fund your account. The most important considerations for payment methods are:
For example, many people prefer to use PayPal for ease of use and low cost, but this option is not always available. Others prefer to use credit card payments to buy Bitcoin and are willing to pay a little extra for a faster transaction time. You should think carefully about the factors listed above to ensure that you choose a payment method that works best for you.
4. Open a position for Long / Short Bitcoin
Example of a trading position to buy Bitcoin on ETFinance.
Before opening a long or short position in Bitcoin, it is important that you understand the difference between the two. Investors who focus on a particular type of position are often referred to as bulls or bears.
Those who believe the price of Bitcoin will continue to rise and plan to capitalize on that appreciation will take a long position where they will sell their investment at a later date. Imagine a bull throwing its target in the air with its horns.
Conversely, investors who open a short position are betting that the market price of Bitcoin will fall. If you short bitcoin and the price goes down, you will get profits instantly. Imagine a bear wrestling its target to the ground.
Once you understand these principles, you can use both long and short positions to trade Bitcoin.
While trading through an online broker like ETFinance, it is important to take some time to set your risk management limits, such as B. Stop-Loss / Take-Profit. With some brokers - like ETFinance - you can own your bitcoins and keep them in your personal wallet so that you would buy bitcoin via a regulated investment platform with high-security standards.
5. Close your position
As mentioned briefly in the step above, proper risk management is very important. If you take care of settings such as stop loss or take profit before starting, your positions will be automatically closed while you still have full control over your trades.
If these limits are in place, it doesn't mean you are completely dependent on automation. There may be situations and scenarios in which you want to close your position early, regardless of your stop-loss / take-profit settings. You may be satisfied with the earnings you've accumulated, for example, or you may be one step ahead of losses before falling to a level where the position will automatically close.
It is advisable to learn all about closing your position through the educational resources available on the platform or on this website.
Buy bitcoin through a crypto exchange
Buying Bitcoin directly on a crypto exchange is often preferred by those who intend to hold onto their investment for an extended period of time. This includes investors who believe in BTC's long-term pricing and those who want to support the network and community.
You should make sure that you choose the right exchange that suits your needs and offers competitive prices for your purchase and payout. While some exchanges charge slightly higher fees than others, there are sometimes good reasons for this. For example, an exchange may charge a little more for additional levels of security or faster transaction times.
The regulatory status also plays a role when choosing your exchange. It is important to understand that not all cryptocurrency exchanges adhere to best practices set by leading financial authorities and therefore have no real scrutiny. By choosing a regulatory-compliant transaction, your investments will gain a level of protection that would otherwise not be available to you.
1. Set up a Bitcoin wallet
Before you begin, you should set up a wallet to receive your purchased BTC. This may seem a complicated process for those new to the world of cryptocurrency, but it is actually quite straightforward and the entire process shouldn't take more than half an hour to complete.
Depending on your strategy and needs, you will come across three different paths:
- Exchange / Online Wallets: This is probably the riskiest approach to keeping your money. However, some exchanges have stepped up and now offer enhanced security measures to keep your funds safe. Users who manage smaller amounts and actively trade may want to keep their Bitcoin available in their wallets.
- Desktop Wallet: Some users get the official Bitcoin wallet or some other desktop wallet that has some advantages like access to their private keys and a good reputation.
- Cold wallet: Also known as a hardware wallet. They are perfect for long-term players who want to save more money for longer periods of time. These devices use security standards such as protocols, hardware chips, and certifications (e.g. the Ledger Nano has a CC EAL5 + certification level). They are essentially portable safes that you can use to keep your BTC safe and secure. However, you have to make an additional investment to buy the physical device.
Users have their share of accountability when it comes to securing their Bitcoin funds and they must follow best practices like 2FA or use different passwords for each of their accounts. Bitcoin Core, Exodus, TREZOR One and Ledger Nano are some popular Bitcoin wallets.
2. Select and join an exchange that offers Bitcoin
As mentioned earlier, there are many leading exchanges to choose from. Some popular exchanges to buy Bitcoin are Coinbase, Binance, Coinmama, and CEX.io. Be sure to review the key features and information to help you choose the most appropriate solution for your needs.
Please note that the registration process may differ depending on the exchange rules and requirements. Some of them follow KYC standards while others just ask for basic information like your name and email address. We recommend regulated exchanges as a safer place to buy Bitcoin.
3. Choose your payment method for buying Bitcoin
Now that you are familiar with your choice of exchange, it is time to decide how to pay for Bitcoin. The recommendations we made above allow for direct payments from a credit or debit card to purchase BTC. Your bank may call you the first time you try to make sure the purchase was intended.
Another approach is to assign a bank account to your Börse account to add and withdraw funds seamlessly. This way you can always make sure that you have a fiat currency ready in case the moment comes to buy Bitcoin.
Whichever payment method you choose, it is wise to choose an exchange that requires verification so that you can be sure that you are getting your Bitcoin from a reliable source.
4. Buy Bitcoin
Bitcoin is the leading cryptocurrency, so you don't have to buy any other altcoin to acquire it. You can buy Bitcoin directly through the exchange you choose. As long as you've set up your payment method properly, all you need to do is place an order.
First, choose your fiat currency before specifying how much you want to spend. An automatic calculator tells you exactly how much Bitcoin you are getting according to current market prices. Now just send the purchase request. If you've enabled 2FA for your account, you may be asked for the authentication code before your request is approved. The balance should appear in your account within minutes.
Here is an example of how you can place an order to buy Bitcoin through an exchange (Binance). Some exchanges make the process a smooth one and all you have to do is specify the amount that you want to invest. Before purchasing, check the Bitcoin price and fees on the order preview to make sure you're getting BTC at a competitive price.
5. Keep your Bitcoin safe
Withdrawing your Bitcoin for storage in your private wallet is also very easy. It should be noted, however, that this step is not necessary and is primarily intended for those with a long-term strategy in mind. If you intend to trade your Bitcoin in the short term, you should leave your investment in the non-custody wallet made freely available by the exchange to avoid withdrawal fees.
When you need to transfer the money to your wallet, you need to have your public key on hand. Simply enter this address in the "Recipient address" field of the withdrawal request and select the Bitcoin amount you want to transfer.
If you have 2FA (2-Factor Authentication) enabled, you will need to provide an additional code to initiate the request. It is also worth noting that many exchanges, such as B. Binance, do not allow a withdrawal request within 24 hours of the first purchase.
Should You Buy or Trade Bitcoin?
Buying a coin and trading a coin is not the same thing, and again trading a coin through an exchange is different from trading through a broker. You need to have a clear idea of your strategy to ensure that you are choosing the right trading environment.
What is the difference between a Bitcoin exchange and a broker?
An exchange facilitates trading between different cryptocurrencies. In fact, an exchange wants to promote trading between altcoins and the leading cryptocurrency Bitcoin. If you want to get a good exchange rate while acquiring various assets and expanding your portfolio, a recommended exchange rate is the arena for you.
Conversely, if you want a passive income from the volatility of the cryptocurrency market, it is better to use an online crypto broker. When properly regulated, these companies provide a surefire way to make money from CFDs and futures contracts. Many leading brokers also allow leverage on your trades. This will multiply your initial investment and maximize the potential returns.
Bitcoin: Long Vs Short Term Investment
As mentioned earlier, there is a fundamental difference between short-term and long-term investments. To guess, a long-term investment would usually involve holding Bitcoin for an extended period of time. Therefore, buying and keeping the coins through a reputable and recommended exchange is the right way to go.
For those who aren't interested in long-term pricing or support the ethos that Bitcoin is based on, a short-term strategy can be a smarter course of action. This involves registering with a reputable and recommended broker to bet on the price movements of Bitcoin. This approach is useful for those who don't want the added complications of setting up a wallet and keeping an eye out for distant developments in the crypto world.
3 tips for buying Bitcoin
Now that you've learned so much about buying and trading Bitcoin, here is a shortlist of tips that are often overlooked.
1. Pick the right time and do your own research on Bitcoin
Do not take a single source as the absolute truth about how Bitcoin will perform and what developments will occur. Try to get the opinions of several experts and news sites to come up with your own ideas and make your decisions. This will help you identify moments of great opportunity. Professional investors also like to take a look at the technical outlook for trends and key buying and selling levels, so technical analysis always increases your chances of making a profitable buy.
2. Compare costs to buy Bitcoin
Simply comparing the costs between exchanges and brokers before entering into a transaction can save you a lot of money, but it is forgotten by many.
It is important to understand whether these costs will be applied to your fiat currency or part of your bitcoin. If you are expected to pay a percentage of BTC, the current market price should also be taken into account as this will determine the actual value of the fee.
Surprisingly, too often security is overlooked. For this reason, we have mentioned the importance of this point several times throughout the guide. Security protocols, regulations, and general security protect not only your investment but potentially your private personal information as well. Make sure these things are in place before investing any money on the platform you plan to use.
What's the best payment method to buy Bitcoin?
- Buying Bitcoin with Cash: Bitcoin ATMs are a popular choice for this method
- Buying Bitcoin with a Credit Card: A very common and widely used option
- Buy Bitcoin with bank transfer: Very convenient and inexpensive
- Buying BTC with Crypto: For those who want to buy Bitcoin with altcoins like Ethereum
- Buy Bitcoin with PayPal: Fast and inexpensive, but not available in all countries.
Other ways to buy bitcoin
We have now brought you the most common and practical ways to buy and trade your own Bitcoin and hopefully, you are feeling much better prepared than you were before.
We'll close with options that are a little less well known, but equally workable methods of obtaining Bitcoin.
Peer-to-peer (P2P) exchanges allow Bitcoin to be transferred between wallet addresses, and the fees are often the lowest available, although this depends on the congestion on the network at the time the transaction is initiated.
Another option is mining. This is where ASIC (Application Specific Integrated Circuits) are used to secure new blocks in the Bitcoin chain by solving complex math problems. When this is achieved, a miner is rewarded with an allocated amount of Bitcoin. ASICs are very powerful computers that serve a single purpose. The process is not cheap and the industry is competitive.
Bitcoin ATMs allow you to exchange your money for Bitcoin directly. The number of these machines has steadily increased and their use offers a high level of anonymity.
So there you have it. You are ready to begin your Bitcoin journey. Remember, we've already taken the time to pick a shortlist of Bitcoin exchanges and Bitcoin brokers so you don't have to. These are the companies that, in our professional opinion, are the most reputable and reliable.