Should I Buy Bitcoin?
Bitcoin is the pioneer of cryptocurrencies with a promising future predicted by many. Mainstream investors are getting in on the Bitcoin act, the excitement is trickling into the masses and the number of products and services you can buy with Bitcoin is increasing. Headlines like, buy a car with Bitcoin or buy a house with Bitcoin, once considered rhetoric, are now becoming reality.
Bitcoin is a volatile currency. Subsequently, the price of Bitcoin is prone to fluctuate, something that makes it both enticing to investors and a caution to others. More mainstream payment methods are being proffered to buy and sell Bitcoin from a growing diversity of platforms and since its inception in 2009, there is no denying the rise in Bitcoin’s value.
Where to Buy Bitcoin?
The main places to buy Bitcoin online are through a broker or via an exchange. Perhaps you have seen offers of ‘buy Bitcoin with kraken’ or ‘buy Bitcoin with Bistamp’ on your internet travels. These are exchanges that allow you to both buy and sell Bitcoin while brokers act as an intermediary.
There is a huge variety of platforms to purchase crypto currencies and the list is growing. You can buy Bitcoin with PayPal and you can even buy bitcoin with your Android and other smartphones. We will explore the options and provide step-by-step details of how to begin to buy with Bitcoin on some of the most reputable platforms.
How do I Buy Bitcoins?
The number of ways to buy Bitcoin is growing. We have detailed some of the most popular and emerging methods to buy Bitcoin below.
Through an Exchange or Broker
Exchanges are a traditional ‘go to’ for those wondering how to buy Bitcoin as they allow users to change fiat money into crypto easily, offer a wide variety of crypto coins and most have a decent level of liquidity.
Brokers can often access Bitcoin more easily as exchanges can experience delays, e.g. longer ID verification processes. Although there is a premium to pay for brokers, they can buy and sell at a fixed price which can result in the best way to buy Bitcoin.
Also, brokers are often more open to different payment options and are considered the best way to buy Bitcoins with a credit card or debit card by some.
Below are the platforms we recommend:
- eToro is a social trading site where you can buy Bitcoin CFDs and copy other traders, ideal if you are new to trading crypto or trading in general as described in our eToro review
- Bitfinex is a large volume crypto currency exchange based in Hong Kong where traders can buy bitcoin in USD. Margin trading, a large variety of order types and currency pairs all feature on this all-singing platform
- Binance is a large exchange with low fees and a high range of different trading pairs. As can be seen in our Binance review, it keeps on top of its game and is an established site where you can buy bitcoin securely
- Paxful offers a great variety of payment methods, ideal for newcomers who want to buy bitcoin with credit cards, visa or other familiar payment methods
- Coinbase is one of the largest, if not the largest, Bitcoin exchanges. It has a welcoming user interface and its ‘instant buy’ feature, described in our Coinbase reviewallows you to buy bitcoin instantly with debit cards and bank transfer. At this time, you cannot buy bitcoin with paypal here
Using CFDs (Contract for Difference) on eToro, a social trading network, is a simple and popular way to buy and sell Bitcoin. A CFD is an ‘agreement between an investor and a broker to pay each other the difference in price between a price of an asset (in this case Bitcoin) at the start of a contract and the price when the trade is closed. There is no ownership of an asset, which means you buy Bitcoin ‘value’.
Your investment follows the same trajectory as Bitcoin itself, but you are invested in a contract that offers flexibility and fast trading. It also means you can buy bitcoin online instantly with credit card if that is your preferred payment method.
How do I Buy Bitcoin on eToro
Step one – sign up as below and pick your country from the dropdown menu. *Please note your username will be public so be careful when using social media sites if you don’t want to be found in searches.
There is a demo/practice account for copy trading available on eToro. It is worthwhile practising on this, so you can get used to the functionality.
Step 2 – Complete your profile providing personal ID documentation e.g. passport and proof of address. You then need to make a deposit choosing one of the many payment options available.
Step 3 – Click on the blue ‘trade’ button in the top right hand of the screen. Another window will appear outlining your trade parameters.
Here, click ‘buy’ and the amount you want to trade. If you want to see how much you have been charged for this, go to your portfolio page.
Useful Tip for eToro Trading
Note that when you click the ‘sell’ button and press ‘open trade’, you are not selling the bitcoin you have, you are ‘shorting bitcoin’ meaning you are making a sell order (leveraging). So, if the value of Bitcoin goes down, you will still make a profit.
If you want to see just how easy it is to buy Bitcoin online with eToro then sign up to eToro and become a member today.
Buy Bitcoin Online - Verification Process
All reputable exchanges and brokers, however they operate, need to verify your personal identity and address details. This means supplying your personal identification and proof of address documents to prevent money laundering and other illegal practices.
How do I buy Bitcoin Anonymously?
The very nature of blockchain technology, the system on which Bitcoin operates, means that transactions are always traceable. So, if you are asking yourself ‘how do I buy bitcoin anonymously?’ Unfortunately, it simply isn’t possible.
If you wish to keep your financial matters private or prefer not to put your trust in big financial organisations, then two options below are considered the best way to buy Bitcoin anonymously:
- Buy Bitcoin from an ATM that doesn’t require you to go through the verification process. The machine, connected to the internet, allows users to change BTC and cash. Each machine is different and they charge a fee of around 5 – 11 %. Be aware that some machines may ask you to confirm your identity.
- Buy Bitcoin with a prepaid credit card. On some exchange sites, you can use this method of payment without having to verify your details. Similarly, you can buy Bitcoin with a Visa gift card to serve the same purpose. Bitpanda, Coinbase and Coinmama accept prepaid visa card payments.
Which Payment Methods Can You Use to Deposit?
In days of old, there were fewer ways to make a deposit to buy crypto currencies, to buy Bitcoin using PayPal was simply unheard of. But now you can buy Bitcoin direct using bank transfers, cash, debit or credit card and ATM machines.
If you want to find out how to buy Bitcoin from PayPal, you can use a site called Virwox. Here, you can put money from your PayPal directly into your account and continue to buy and sell on the exchange.
Other Ways to Buy Bitcoin
Yes, there is more than one best place to buy Bitcoins…
How to buy Bitcoin in person?
You can buy Bitcoin with cash if you prefer a traditional approach or if you want to buy Bitcoin fast. Firstly, find a seller locally who wants to sell coins. Make sure they are legitimate by checking their feedback history on the exchange you will be using. Deposit the cash into their account, take a copy of the receipt and upload this into your wallet. Money transfer companies like MoneyGram and Western Union are also used to buy Bitcoin with cash.
How to buy Bitcoin with cash at Walmart?
Don’t be mistaken here, if you are in the US, you cannot simply show up at a Walmart store and buy a Bitcoin like a pack of Doritos. But, you can buy and sell Bitcoin through Walmart-2- Walmart, a money transfer service. You will need to acquire a wallet, join an exchange and find a seller to buy Bitcoin from using Walmart-2-Walmart. Fees do apply.
How do I buy Bitcoin on eBay?
Yes. Input ‘Bitcoin’ in the search tab as you would do for any other eBay item. You can add these to your wallet straight from eBay when you have purchased.
Should I buy Bitcoin with an Amazon gift card?
Yes. Exchanges like Paxful where you buy bitcoin from other people, also allows you to redeem the value of your Amazon gift card by purchasing Bitcoins. This allows for a fast purchase in small denominations. Backpage is a similar market place that lets users buy Bitcoin with Skrill and Google Wallet.
Does it Matter Where I Live to Buy Bitcoin?
If you want to buy and sell Bitcoins from the country you are in, this is not an issue if that country has not banned trading or deemed it illegal. Different countries have different legal rules when it comes to buying Bitcoin. These rules are changing all the time. So, whether you want to buy Bitcoin online in Australia or if you want to buy Bitcoin online from India, this should not be a problem.
It is worth noting that if you buy Bitcoin in the UK, it is a quicker process to put down a deposit than other countries because restrictions do apply depending on where you are from. From some corners of the globe, the process can take a few days.
It is also worth being aware that trading accounts are in USD on the eToro platform, so you will need to buy Bitcoin online with USD. If you are buying Bitcoin online with Euro, or another currency then you will be charged a conversion fee.
Which Places Accept Bitcoin Payments?
The popularity of Bitcoin means that some retailers accept Bitcoin as a means of payment. For example, you can Buy Bitcoins with a credit card on reddit and you can also use it to buy services from:
- KFC Canada
Investing in Bitcoin
A Bitcoin investment is the same as any other financial trade. In other words, you buy into the market at one price in the hope you can cash out at a better price. While that’s true at a basic level, the way the industry has evolved means there are actually three ways to join the market:
Using Bitcoin Exchanges to Invest
Whenever someone asks us how to invest in Bitcoin, the standard answer is always: via exchanges. When you scroll through our list of recommended crypto exchanges, there are plenty of platforms that allow you to purchase BTC in the same way you would a fiat currency. For example, if you read our Binance review, you’ll see that this platform gives you the option to buy coins using crypto i.e. you can create an account, load it up with ETH and then purchase BTC.
That, in simple terms, it how to invest in Bitcoin via an exchange. The thing to remember when you make a Bitcoin investment using these sites is that you’re purchasing the underlying asset (actual coins), so you can only make money if its value increases.
Using Bitcoin Trading Sites to Invest
If you want to know how to invest in Bitcoin and make money whichever way the market moves, you need to use a traditional trading site. For example, if you read our eToro review, you’ll see that you can speculate on the price of Bitcoin increasing and/or decreasing. In technical terms, these are known as buy and sell orders. The reason this is possible is that you aren’t buying the underlying asset.
Instead, what you’re doing is investing in BTC using something known as a contract for difference (CFD). Without going too far into the specifics, that means you are speculating on the price of BTC instead of buying coins (something you do via an exchange). For novices, this system is perfect for two reasons. Firstly, you have the ability to make money if the price increases or decreases. Secondly, the eToro website has used this model to offer social trading. This means you can follow someone in the same way you would on social media, and the software will copy their trades. Essentially, this allows you to make a Bitcoin investment like a pro, even if you’re a complete newbie.
Using Bitcoin Funds to Invest
It's now possible to invest in funds that have some sort of exposure to the cryptocurrency market, which normally involves Bitcoin. This works by either buying a stock of that mutual fund or simply signing up to it. They invest your money on your behalf and if you choose a fund that does offer crypto exposure they will have some in their portfolio.
For these funds to gain access to the markets, they will have to do one of the two methods above; either buy it via an exchange or another broker / trading site.
How to get Started with Bitcoin Investment
Should I invest in Bitcoin? If you want to answer that question correctly, you need to first decide how you want to play the market. If you’re happy with buying the underlying asset, you should use an exchange. However, if you want the flexibility of CFD and social trading, you need to use a trading site. Whichever option you choose, you’ll need the following things to make a Bitcoin investment:
A Starting Bankroll: Every trader needs a sum of money they can use to make investments. This money should be enough to get you into the action but also not so much that you can’t afford to absorb a loss. As a general guide, you will need to deposit at least £100 if you want to make a Bitcoin investment at eToro.
A Trading Platform: Learning how to invest in Bitcoin is just one of the things you need to do if you want to make some money as the price of BTC changes. To trade with confidence, you need a platform that’s secure and easy to use. When you use our eToro sign-up link, you’ll be able to join a platform that’s designed for novices and regulated by the FCA and CySEC. These features make the investment process simple, safe and slick.
A Bitcoin Wallet: For those using crypto exchanges, a Bitcoin wallet is an essential piece of kit. If you read through our Bitcoin wallet guide, we list some of the leading online and offline storage solutions such as Trezor. For those using a trading platform like eToro, a wallet isn’t necessary. Because you’re not buying coins, you don’t need to store them anywhere. Instead, your investment is held by the site and the money is released into your account once you’ve completed a trade.
A Wealth of Information: The key to making money from any Bitcoin investment is information. Reading the latest Bitcoin headlines, reviewing the price of Bitcoin and taking advice from experts is the only way you can get a handle on how the market is going to move. In addition to these provisions, the social trading options at eToro are a great way to stay ahead of the game. Because you can review the profiles of experienced traders and then copy each move they make, it’s possible to accelerate your earning potential with a fairly limited amount of knowledge and experience.
Where to Invest in Bitcoin?
Now you know how to invest in Bitcoin like a pro, the next step is to join a reputable trading platform. As we’ve already said, there are two main ways to invest in the market. If you’re slightly more experienced or simply want to own some Bitcoins, you can look through our list of top-rated Bitcoin exchanges and make a purchase. If, however, you’d prefer a more flexible solution, we’d suggest using eToro.
Before making any Bitcoin investment via eToro, take a look at our review. By reading through our overview of eToro, you’ll get an insight into how it works and the features it offers. What’s more, we’ve also taken the time to explain how eToro is regulated by two financial authorities. That’s something you won’t get with a Bitcoin exchange such as Binance. Even though these new platforms as safe, they aren’t overseen by an established regulator.
For the sceptics that are asking “should I invest in Bitcoin?” and “will my Bitcoin investment be safe?”, the main benefit of using eToro is that your funds are protected. Indeed, just as professional traders speculating on forex or gold are able to invest in confidence, eToro offers the same peace of mind when it comes to cryptocurrencies. For this reason alone, eToro is our go-to choice for investing in Bitcoin.
Can I Profit from Bitcoin Mining?
Finally, bitcoin mining. Put simply, this is another way of profiting from Bitcoin that doesn’t involve a typical investment approach.
Bitcoin is built on the blockchain, a computer network that administers every transaction on it. ‘Miners’ are individuals who solve the mathematical equations for each transaction on the blockchain and they earn a commission from this.
If you want to become a miner, you will need to buy bitcoin mining hardware and buy a bitcoin mining rig (the system mining runs on). For a bitcoin miner like ASIC or to buy a used bitcoin miner, you can use eBay, Amazon or Alibaba. Note that set up costs, including electricity usage can be extensive.
Hopefully we have answered the question ‘should I buy bitcoin’ and with any luck, a few more! If you would like to know more about investing in bitcoin or the latest bitcoin news click here.