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How to Buy Bitcoin (November 2022)

It seems like everyone is talking about Bitcoin and cryptocurrency investments. Cryptocurrency is more popular than ever. But many people don’t have the first clue how to get started with investing in cryptocurrency.

There are so many articles online about Bitcoin and cryptocurrency, and the information overload can be quite overwhelming to beginners. But, it’s actually quite easy to get started, thanks to the abundance of cryptocurrency exchanges and wallets on the market today.

We’ll tell you everything you need to know about how to buy Bitcoin, and even give you a list of some reputable cryptocurrency exchanges to get you started!

How to Buy Bitcoin

If you’re learning how to buy Bitcoin, the good news is that there are relatively few steps in the process.

You simply need to choose where you want to buy your Bitcoin from, choose a payment method, place your order, then choose a safe place to store your cryptocurrency.

There are a lot of different places you can buy your cryptocurrency from. Here are a few various methods you can use to buy Bitcoin.

Cryptocurrency Exchanges

Typically, a cryptocurrency exchange is a place that allows you to buy, sell and store cryptocurrency all from one app or website. Most people use exchanges to buy and sell cryptocurrency and then transfer their crypto to another cryptocurrency wallet for added security.

However, if you’re just looking to buy and sell cryptocurrency, the ability to transfer your cryptocurrency to a wallet may not be a  feature that you’re overly concerned with.

There are a lot of different types of cryptocurrency exchanges, and they all have various features. Some exchanges allow you to remain anonymous, without entering any of your personal information to buy cryptocurrency.

These exchanges are “decentralized”, which means they have no official centralized location. There are pros and cons to decentralized exchanges. For example, decentralized exchanges can be used for nefarious purposes, however they allow people who don’t have access to things like banks with a way to invest and pay their bills with Bitcoin.

Most of the widely popular exchanges are centralized, so you don’t have anything to worry about with them. There are more and more centralized exchanges entering the market, and they’re offering more and more features in order to compete with the vast cryptocurrency market.

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Every exchange platform supports different cryptocurrencies, so if you want to buy and trade a specific type of altcoin, you should read about the supported cryptocurrencies that different exchanges offer until you find the one that’s right for you.

However, if you’re interested in learning how to buy Bitcoin, then you shouldn’t have any problems finding an exchange that supports that particular type of cryptocurrency.

Coinbase and Gemini offer a variety of supported cryptocurrencies, and they’re some of the most popular crypto exchanges today because they’re simple to get started with. Binance is another popular option, but it caters more to experienced investors. It provides more features and trading settings, which may confuse beginning investors.

No matter which crypto exchange you use, you should remember to use online security practices, such as enabling 2- factor authentication and using a strong password with at least one number, a character, and both upper and lowercase letters.

PayPal

It may surprise you to find that you can buy Bitcoin from the popular payment service, PayPal.

PayPal actually supports four different cryptocurrencies currently: Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. You’re even able to use the Bitcoin that you purchase through PayPal to pay for things through PayPal using a “Checkout With Crypto” button, which is convenient.

When you’re learning how to buy Bitcoin, you should know that there are a couple of disadvantages of buying Bitcoin through PayPal. The first is that PayPal doesn’t allow you to transfer your cryptocurrency to a wallet for safety.

How To Buy Bitcoin On Paypay - Comparewise

You also can’t transfer crypto that you’ve bought from other platforms to PayPal. The other downside is that there aren’t very many vendors that allow you to pay for their products and services using cryptocurrency.

Allowing customers to pay for things using cryptocurrency is a nice feature, but if you never really get to use the feature because vendors don’t use it, it doesn’t do you much good.

We’ll get into how to buy cryptocurrency through PayPal in another section of our how to buy Bitcoin article.

A Credit Card

You’re also able to use a credit card to purchase Bitcoin through various exchange platforms. It works pretty similarly to buying Bitcoin using debit cards or using an ACH (Automated Clearing House) transfer.

If you’re learning how to buy Bitcoin, it’s worth noting that some people aren’t fans of this purchasing method because it has a couple of drawbacks.

The first drawback is that not all exchanges support this payment method. This is because of the fraud risk involved in credit card payments, as well as the fees associated with them. This decision by exchanges that don’t support credit card payments may be in the best interest of customers because credit card fees can really add up.

Crypto.com-App-And-Cards-Comparewise

This would make buying Bitcoin expensive because not only would you have to pay transaction fees, you would also have to pay credit card processing fees.

The other reason that people pass on credit card payments is because they can be expensive. This is because credit card companies consider cryptocurrency purchases to be the same as cash advances, and they charge the same high fees and interest rates associated with cash advances.

So if you use an American Express card to buy $100 worth of Bitcoin, you’ll pay $10 (the current fee for cash advances), as well as the 25% annual percentage fee. On top of that, they’ll limit your Bitcoin purchases using a credit card to $1,000 worth of Bitcoin per month.

Bitcoin ATMs

Bitcoin ATMs are a way to trade cryptocurrency through an exchange, but you do it at an ATM.

Bitcoin ATMs are becoming more popular. Even the popular retail giant, Walmart is considering allowing shoppers an option to buy Bitcoin while at their stores. If you’d like to find a Bitcoin ATM, it’s just a Google search away.

Anyone learning how to buy Bitcoin should know that many people dislike using Bitcoin ATMs because they’re an expensive buying option. There are both purchase fees and exchange fees when you buy Bitcoin through a Bitcoin ATM. They’re really expensive, too. The average purchase fee at Bitcoin ATMs is 8.4%.

You also can’t just rock up to a Bitcoin ATM and make a quick first- time purchase. You’ll need to go through a verification process. After 2020, most Bitcoin ATMs require a government- issued photo ID. Some of these machines take pictures of you, or require a fingerprint.

P2P Exchanges

Another option to consider when you’re learning how to buy Bitcoin is P2P (Peer to Peer) exchanges. Unlike other cryptocurrency exchanges that facilitate trades between users anonymously, P2P exchanges allow people to interact with each other directly.

Users create posts that include the type of cryptocurrency they’re selling, the amount, the price, payment methods they’ll accept and more. Then buyers can look through the posts and choose which cryptocurrencies they want to buy and from whom.

While you don’t have the same level of anonymity on a P2P exchange as you would on other cryptocurrency exchanges, users are afforded the chance to shop around. To help you find trustworthy buyers and sellers, most P2P exchanges have a star rating system.

Mainstream Brokerages

Another option to consider when you’re learning how to buy Bitcoin is mainstream brokerages. It’s rare that mainstream brokerages offer Bitcoin purchases. This is because the regulatory status of cryptocurrencies is currently so uncertain.

However, if you can find a good mainstream brokerage that allows you to buy Bitcoin, then it has its perks. Brokerages will protect purchases and investments of up to $500,000 with a $250,000 cash limit. However, you’re not protected against password theft. It’s important to note when you’re learning how to buy Bitcoin that you don’t get this sort of protection from cryptocurrency exchanges.

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Crypto Trading Platform

It’s important when you’re learning how to buy Bitcoin to understand the difference between cryptocurrency exchanges and crypto trading platforms. A crypto trading platform allows you to buy and sell cryptocurrency, but you’re typically not allowed to transfer your cryptocurrency to someone else. Instead, you have to sell your Bitcoin to receive money.

Over the Counter (OTC)

This is another option that you should learn about if you’re learning how to buy Bitcoin. OTC trading happens outside of cryptocurrency exchanges. This usually refers to brokerages that help clients with high-net-worths to purchase millions of dollars worth of Bitcoin at once. Because of the nature of their services, they’re typically not publicly listed.

Even if you’re not looking for an OTC trading platform, it’s important to know what they are in case mention of them pops up when you’re looking for an exchange.

In Person

Another option that everyone learning how to buy Bitcoin should at least be aware of is in-person trading.

There are places set up in various parts of the world to facilitate in-person cryptocurrency trades for cash. However, if there aren’t any of these facilities near you, you could meet a person at an agreed upon public location.

Of course, meeting a stranger from the internet is always risky. You should take precautions if you choose this method.

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Pros and Cons of Buying Bitcoin

We want to provide you with an unbiased article about how to buy Bitcoin, so we’re going to tell you about the pros and the cons of buying Bitcoin.

Pros of buying Bitcoin

  • It’s Accessible and Has High Liquidity: Bitcoin is a currency that knows no borders. It’s easily bought and accessible to everyone. You can use Bitcoin to pay for goods and services at more and more stores because it can be transferred so quickly. Bitcoin can make spending money in a foreign country not only easier, but cheaper because you won’t have to deal with exchange rates. And, the best part about Bitcoin is that you can sell it for cash any time you want.
  • Anonymity and Transparency: Bitcoin transactions aren’t totally anonymous, but users are identified with a string of numbers, rather than their names. They can also have more than one public key. This means that transactions can’t be directly tracked back to the user. Transactions are permanently viewable, giving users transparency. However, blockchain provides security from fraud. Even better, the only person that will know how many coins a user has is the owner of the wallet. If your wallet address was to become public somehow, you can simply change your wallet address. All of this anonymity ensures security, and it’s safer when you compare transactions to bank transactions, which can result in the leaking of all of your personal information.
  • Break Free From Central Authority: One of the biggest perks you’ll discover when learning how to buy Bitcoin is that it’s not governed by any central bank or government. This means that there’s no one to freeze your funds or demand a cut of your coins. Bitcoins aren’t currently taxed. This means that Bitcoin users have more power over their money, and that’s the main reason that many people invest in it.

Cons of buying Bitcoin

  • Volatility: There are only ever 21 billion Bitcoins in circulation, which contributes to their value. But this makes them scarce, and that scarcity makes them vary in price. There are a lot of other factors that contribute to Bitcoin’s fluctuating prices, like the fact that any time Bitcoin is in the news it affects its price, and the fact that its future is unclear, plus the security breaches that have occurred over the years.
  • Lack of Government Regulation: You’ll notice that we listed this in the previous “Pros” section of our How to Buy Bitcoin article. That’s because the lack of government regulation is a double- edged sword. There are no  legal protections for Bitcoin transactions, and they’re not reversible. This means that Bitcoin transactions are vulnerable to scams. Another downside to decentralization is that there’s no minimum value of Bitcoin, so if a massive group of investors decided to sell all of their Bitcoins and then stop using them, the value would drastically decrease.
  • Limited Use: This is something that you should know when learning how to buy Bitcoin. There are more and more companies that are accepting Bitcoin as payment, like Subway franchises and Microsoft. But, outside of buying a computer from Microsoft, you’re going to have a difficult time finding places to spend your Bitcoin.
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How Much Does it Cost to Buy Bitcoin?

If you’re here to learn how to buy Bitcoin, this is probably one of the most burning questions you have.

We’ll present you with prices listed from Coinbase because it’s one of the biggest cryptocurrency exchanges.

They charge transaction and trading fees between 0.5% and 4.5%. This depends on factors like the transaction amount and the payment method you choose.

They charge a flat rate depending on your transaction amount. For transactions of $10 or less they charge $0.99. For transactions of $10- $25 they charge $1.49. For transactions of $25- $50 they charge $1.99. For transactions of $50-$200 they charge $2.99. Anything over $200 is charged a percentage- based fee.

There’s also a spread fee of 0.50%. And you can expect fees based on your payment method.

  • ACH Transfers- Free
  • Bank account or USD Wallet: 1.49%
  • Credit or Debit Card: 3.99%
  • Wire Transfers: $10 incoming and $25 outgoing
Shakepay Crypto Mobile App Exchange - Comparewise

How to Buy Bitcoin on an App

This is another important thing to know if you’re learning how to buy Bitcoin. If you’re using a cryptocurrency exchange app, here are the steps to buy Bitcoin:

1. Sign up and go through the verification process. This can take a couple of days to complete.

2. Link your bank account to the exchange. It’s important to know that some banks will question or even stop transactions made to cryptocurrency exchange sites. So, you should probably ask your bank what their policy is.

3. Place an order. Choose the cryptocurrency you want to purchase (in this case Bitcoin) and select your payment method. From here you can typically go ahead and make the purchase or decide to set up recurring purchases of the same type.

4. Choose a wallet and transfer your Bitcoin. This ensures that if the exchange is hacked, your investments won’t be stolen.

How to Buy Bitcoin with a Credit Card

Many exchanges are steering away from credit card purchases because of their high fees. But if you find one that allows for purchases, then the steps are the same as the steps listed under the “How to Buy Bitcoin on an App” section of our article. All you have to do is select your credit card as the payment method and pay the additional fees.

Another way to buy Bitcoin with a credit card is to get a Bitcoin rewards credit card. They work the same as other rewards credit cards, but they provide you with Bitcoins as rewards. Watch out for the high fees associated with these cards, though!

How to Buy Bitcoin with PayPal

Another buying option you should know about when learning how to buy Bitcoin is PayPal.

You’ll need to provide them with information like your address, name, date of birth, and tax ID number.

It’s important to note that you can’t use a credit card to buy Bitcoin on PayPal. Your two payment options are your PayPal balance or the bank account linked to your PayPal account.

PayPal makes its money off of what’s known as “the spread”, which is the difference in the market price of the Bitcoin and the USD exchange rate. They also charge a flat fee for each transaction. They charge a percentage- based fee for any transactions over $200, as well.

How to Buy Bitcoin Conclusion

Bitcoin is one of the most popular cryptocurrencies on the planet, and as a result, many people are learning how to buy Bitcoin. If you’re considering buying Bitcoin to pad your investment portfolio, then the tips in this article should help you navigate through the process. Thanks for checking out how to buy bitcoin.

You might also like…

  1. How to Buy Litecoin
  2. How to Buy Solana
  3. How to Buy Ethereum

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FAQs about How to Buy Bitcoin

What are some good cryptocurrency platforms to use?

Here’s a list of reputable cryptocurrency apps and platforms for anyone learning how to buy Bitcoin:

What are the most popular ways to buy Bitcoin?

Of course you should know about the most popular ways people buy Bitcoin when you’re learning how to buy Bitcoin! By far the most popular method is cryptocurrency exchanges. Other popular methods include both cryptocurrency and mainstream brokerages, as well as PayPal and other payment service platforms. If you’d like to find a way to indirectly own Bitcoin, you could consider investing in companies that invest in cryptocurrency, like Tesla.

How much should I expect to pay to buy Bitcoin?

This varies from exchange to exchange, so there’s no one answer to this question. There are trade fees, as well as fees to convert fiat currencies to cryptocurrency. The bigger the purchase, the more you can expect to pay in fees. You should also look into the features that the exchange you’re using offers because they typically charge for additional features.

Is Bitcoin covered by the CIPF?

First, the CIPF or Canadian Investor Protection Fund is an insurance program that was created by Canadian securities regulators that protects investors from bankruptcy. It provides up to $1 million in protection for investors. So, if you were to make a transaction under $1 million and something went awry, the CIPF would kick in and cover it to protect your investment and keep you from having to file for bankruptcy. The short answer is that no, Bitcoin isn’t covered by the CIPF. There is no government regulation of cryptocurrency. This is one of the main draws of this investment medium because it means that government entities can’t freeze Bitcoin funds, or tax them. But it also means that they aren’t protected by things like the CIPF or other government regulation.

Where Can I Buy Bitcoin Other Than Cryptocurrency Exchanges?

You have the option to buy Bitcoin from a number of venues, such as:

  • Bitcoin ATMs
  • Mainstream or cryptocurrency brokerages
  • Online payment service platforms like PayPal

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