How to Buy Bitcoin (USA)
Whether you are getting started with crypto trading, investing over the long term, or just using it for making purchases, it's important to understand what Bitcoin is and how to protect yourself. Just the same as when you are dealing with any other digital currency.
Learn How to Buy Bitcoin in the USA
About 25 percent of the world's Bitcoin trading activities are attributed to the US. That should at least paint a picture of how this cryptocurrency is readily available and popular in the United States. With the Bitcoin acceptance rate growing, it has become pretty easy to acquire it.
If you'd like to join in the wagon and reap the profits like the rest of the other crypto traders, the best way is to buy and try out Bitcoin. We always advise starters to begin small with a $1 worth investment to build a learning experience. However, whether to invest massively, what you'll invest, and when to do so is entirely up to you.
What Makes Buying Bitcoin in The US So Popular?
One is the fact that so many institutions and individuals readily accept it. And many platforms and exchanges are in provision to facilitate buying and selling of Bitcoin. But the most crucial reason is that it's not restricted nor regulated by the federal government.
Only the states have to make their own decisions regarding digital currency, but none has taken any action yet. Buying, selling, or exchanging Bitocin ad other cryptocurrencies is entirely legal all over the country. As a budding investor, that leaves you with an incredible opportunity to try out Bitcoin in every capacity.
Even though no federal legislation about cryptocurrencies exists, some guidance to states about these digital currencies does exist. After the popularity of cryptos exploded in 2014, federal entities made some cryptocurrency classifications. According to IRS, they're treated as property. SEC refers to them as digital currency, while the CFTC classifies cryptocurrencies as commodities.
As such, it's entirely legal to carry out transactions using cryptocurrencies, even though they aren't legal tender yet.
Where Can You Buy Bitcoin?
There are multiple ways to buy Bitcoin in the US. Among the most common include the crypto exchange platforms, Bitcoin ATMs, and peer-to-peer markets. Let's have a look at each of these methods.
Crypto exchange platforms enable you to buy Bitcoin from other users through bank transfers, debit or credit cards, or other cryptocurrencies. The downside to this, though, is that the platforms can be daunting to new users. They resemble stock exchanges with order books, charts, and more. Apart from that, take note of withdrawal, deposit, and the trading fees charged.
Buying Bitcoin using Bitcoin ATMs
Bitcoin ATMs are an easier, more traditional way of buying Bitcoins. They operate like standard cash ATMs but instead have internet where you can connect to your wallet, whether buying or selling. Some also have requirements to create an account first before transacting.
One challenge with these ATMs is that they charge incredibly high fees than the exchanges. However, they rank almost the same as the exchanges security-wise.
The US ranks top in the number of Bitcoin ATMs with over 3,500. Visit website such as Coin ATM Radar to see some of the Bitcoin ATMs within your vicinity.
Buying Bitcoin Peer to Peer
Peer-to-peer transactions can either be two individuals meeting to transact or through platforms that create an avenue for two entities to sell and buy. A friend, family, or acquaintance can link you with a seller. If you opt to meet a seller in person, make sure to do so in a public setting.
Alternatively, you can opt for P2P online markets where buyers list their offers and sellers interested will connect to complete the transaction. Buyers may specify their preferences, such as how much Bitcoin they want to buy, their mode of payment, among others.
P2P transactions are, however, not safe as they pose the risk of losing your money through a scam. The platforms operate using escrow services, with each user having a rating, but it's still very possible to fall prey to scammers. Some of the popular P2P markets in the US include Bitquick, Bitsquare, and LocalBitcoins.
How Do You Buy Bitcoin?
For practice purposes, it's advisable to start your first purchase through an exchange platform, such as Coinbase.
Up to this moment, we believe you've done some research about Bitcoin and are ready to try them out. As mentioned earlier, the secret to absorb the knowledge better is to try buying in small bits, like $1 worth, though you can go as high as you can afford.
The most important thing to know about purchasing Bitocin is where to buy from and where to store them. The most common Bitcoin marketplace is the exchanges. The transaction occurs in rather a similar fashion as buying foreign currency, only that it's digital. You won't receive any tangible item such as fiat currency.
Setting Up Your Cryptocurrency Wallet
A crypto wallet is secure storage for your acquired Bitcoins. It can either be a cold or hot wallet. For starters, a hot wallet is the most ideal. A cold wallet is a storage that's not connected to the internet and is the most secure, such as storing it in a flash disk. On the other hand, hot wallets are storages that are online-based, offered mainly by exchanges.
When getting started, the least complications you experience, the smoother your learning curve. Coinbase, which acts as an exchange platform and a wallet, is an ideal choice due to the ease of use for starters. But in terms of security, there are many better options than using an exchange.
The reason for Bitcoin's existence is to make you the sole owner of your money through a private key. Coinbase is insecure in that it stores this private key, and that exposes it to cyber theft. As such, it's a good platform for budding crypto traders but not ideal for keeping serious investments.
Create an Account
Creating an account on an exchange platform follows the same standard procedure as opening a bank account. You'll need to provide some form of identification, usually a passport or a government-issued ID. The application process involves filling and submitting the application form with other requirements, like your address, phone number, email, your photo, and more.
After submission, the approval process can take a couple of days and can be annoying with requests to make changes.
Connecting a Bank Account or Card
Once your account is approved, next, you'll have to connect a source of funds to pay for your Bitcoins. The process is straightforward and standard for most exchanges, just like adding your debit or credit card to a service app like Uber.
Take note that some banks may not readily authorize this process. Banks such as Scotiabank will deny people from spending their hard-earned cash to purchase cryptocurrencies.
Verify and Place Your Bitcoin Purchase
Any cryptocurrency exchange platform will present a list of cryptos on sale and their rates. If using Coinbase mobile app, click the “Accounts” link and see the list on the next screen. After selecting BTC as your preferred cryptocurrency to purchase, the subsequent steps will be straightforward until you complete the purchase.
Before executing the purchase, remember that you should only buy any cryptocurrency with money that you're willing to lose. Losing is a common occurrence in these highly volatile markets. You simply have to invest wisely.
Another vital thing to remember is that cryptocurrencies are taxable as capital gains or income. Therefore, track all sales and purchases from day one. Else you might find yourself in a bad mess with the taxman.Want to learn more about trading cryptocurrency?
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