How to Buy Bitcoin – credit card, cash or a bank transfer.
So you have decided to invest some money in Bitcoin and you are asking yourself what is the best method to buy cryptocurrency. In this post you will learn about the three common payment methods and the pros-and-cons of each one.
First – get your Bitcoin wallet!
It is strongly advised not to store your cryptocurrency on an exchange, only on a dedicated wallet that you own. Here you can read our full guide to Bitcoin and Altcoins wallets.
You can store Bitcoin on a hardware wallet, a cellular wallet, a desktop or a web wallet. Most wallets are multicurrency wallets so you can use them for a variety of Altcoins.
Which wallet should you choose?
Web Wallets are very convenient, but are not the safest because your private keys are stored by a third party on a remote computer. The managers of the service have access to your funds at any time.
It is strongly recommend using a hardware wallet. Hardware Bitcoin wallets are the safest wallets available. Ledger Nano S and TREZOR are currently the finest hardware wallets on the market, and both support nearly two dozen cryptocurrencies.
The Ledger Nano S is currently one of the best if not the finest hardware wallet with a screen. It can be used on any desktop computer or Android smartphone.
TREZOR (lunched on August 2014) was the first Bitcoin hardware wallet that offered secure cold storage plus the ability to spend coins with the convenience of a hot wallet.
If you have decided not to use a Hardware wallet try the following options:
When you have your Bitcoin wallet setup and ready, you can move on to the next step – buying Bitcoins.
Buying Bitcoin with a credit card
Buying Bitcoin with a credit card or debit card became a simpler process with time, and more exchanges are adopting that payment option.
Today most exchanges have a KYC policy, so you’ll be providing some personal information and proof of identification. The service is usually worldwide and the fees are between 5% 6.5%.
Here you can find a step-by-step guide on how to buy Bitcoins on Coinmama.com, one of the oldest services that made it possible to buy bitcoins using a credit card.
The processing time on coinmama varies depending on workload, but usually it takes a couple of hours.
And here you can find a list of the best exchanges were you can buy bitcoin using your credit card.
Buying Bitcoin with cash
There are a lot of good reasons to buy crypto with cash money. It’s a private process, while most exchanges require you to verify your identity. You don’t have to wait for bank transfers, or for a verification process.
You can buy Bitcoin with cash from other people you may know or contacted using dedicated platforms. This kind of trade is called F2F trade (face-to-face). You can use dedicated groups on Telegram or Facebook, or you can use an online or an offline marketplace.
Online marketplace – a person-to-person bitcoin trading sites
On a P2P site or App you can locate people near you, or even from different countries, that want to exchange local currency into Bitcoin. You can negotiate sellers; choose the rate, payment method and the overall terms of the deal. Here are some major players:
LocalBitcoins – Global
On LocalBitcoins you can buy bitcoins with cash or cash deposit. the service is private and charge a flat 1% fee for each purchase. Read LocalBitcoins full review.
BitQuick – USA
This is another service that connects you with sellers who want to sell Bitcoin for cash. BitQuick is only available in the United States and offer 2% fee for buyers. Read BitQuick full review.
LibertyX – United States, Canada, Germany + 5 more
LibertyX servcie lets you buy bitcoin with cash at a number of retail stores in the United States. however, You’ll have to verify your identity before buying. 1.5% fee plus store fee. Start buying Bitcoin with LibertyX.
Buying Bitcoin using an ATM
You can also buy Bitcoins with cash using an ATM (automatic teller machines).
Bitcoin ATM is one of the fastest ways to buy (and sell) bitcoins, depending on the machine type. You can complete the process in minutes or even seconds.
Almost all ATMs have the same basic process:
- You scan the QR code of your Bitcoin address.
- You feed bank notes into the machine.
- You click Send and wait for the Bitcoin to appear on your wallet address.
Using a Bitcoin ATM is with no doubt a very easy way to buy bitcoins, but not a cheep one. The average ATM charges a fee of 5-10%. that is the price of privacy since most don’t require verification.
here are two leading sites that can help you locate a Bitcoin ATM near your location:
Buying bitcoins with a wire transfer
Buying bitcoins with a bank transfer or a SEPA transfer does not allow any kind of anonymity. however a lot of people, mostly those who want to transfer large sums to exchanges or other parties, prefer to use a wire transfer. it is maybe the most trusted method, with relatively low fees, depending on the exchange rate.
CEX.io exchange, a trusted Bitcoin exchange that accepts bank transfers using ACH in the USA or SEPA transfer for EU. It was established in 2013 in London and serivce is Available worldwide.
If you are from the Eurozone click here for buying Bitcoin with a wire transfer on BitPanda exchange.
another European exchange but one that is available worldwide is Bitstamp. Its operating since 2011 and serves large financial institutions.
Another option is Coinbase, estimated to be the world’s biggest Bitcoin broker with 33 countries supported.
And last but not least is Kraken, the world’s largest euro Bitcoin exchange offering international bank transfer, SEPA transfer, and Interac.