How to buy Bitcoin

In recent years, Bitcoin (BTC) adoption has exploded. While it was once taboo to invest in this alternative asset, more and more people around the globe are now buying and holding it, making Bitcoin more mainstream.

Whether you are a beginner or a seasoned investor looking to diversify your portfolio, this article will guide you through a range of ways to buy BTC in 2023, including using crypto exchanges, payment apps like PayPal or even Bitcoin ATMs.

Keep in mind that Bitcoin’s price is highly volatile. It’s gone from being worth about $3,800 in March 2020 to $69,000 in September 2021 and back to $25,000 in February 2023. This means that investors are at risk of considerable losses as well as gains, and you should exercise caution appropriately.

Today BTC is trading for $27,185.62, which is slightly up from yesterday's trading price of $26,979.09. Bitcoin's seen a a decrease of -37% over the past year. It reached an all-time-high price of $69,045.00 in November 2021.

Where to buy Bitcoin

Some of the most common places to buy Bitcoin through exchanges or trading apps. These accept US dollars via bank transfer or card which makes purchasing BTC convenient and relatively quick compared to other methods.

If you’re not sure which exchange might be right for you, please review our list of best crypto exchanges for 2023 to help you make a decision.

If you plan to buy BTC through one of the less common methods – via a Bitcoin ATM or a peer-to-peer marketplace – you’ll have to learn how to self-custody your BTC first.

What is Bitcoin?

Bitcoin is the world’s oldest and most valuable cryptocurrency by market capitalization – or the amount of money in total invested in the asset. Created in 2009 by a pseudonymous person or persons known as Satoshi Nakamoto, Bitcoin is a decentralized and cryptographically-secured digital payment blockchain network and the asset on it – BTC – was designed to provide an alternative to traditional fiat currencies like US dollars or euros.

Rather than dealing with a centralized authority such as a bank to process transactions, BTC holders can transfer their coins directly to one another on the peer-to-peer Bitcoin network.

The maximum coin supply of Bitcoin is limited to 21 million, but it’s possible to buy a small fraction of a coin – each coin can be divided into 0.00000001 BTC.

What’s the best way to buy Bitcoin?

While it’s up to you to decide how you feel most comfortable buying Bitcoin, we have provided a breakdown of the different ways and places you can buy Bitcoin.

We began by focusing on the more common ways to buy BTC, before moving on to the less common ways to buy the asset.

Buying Bitcoin from a crypto exchange

Buying BTC on a crypto exchange is the most common way to invest in Bitcoin.

Exchanges such as Coinbase, Kraken, eToro, Binance.US and Crypto.com are some of the most widely used crypto exchanges. They also enable you to buy other cryptocurrencies in case you’d like to expand your portfolio beyond BTC.

The crypto exchange you choose will depend on your investment style and requirements. Some exchanges support instant buy features, which allow you to purchase Bitcoin directly from the platform using a credit or debit card or a bank account.

Other exchanges support spot market trading – which is a slightly advanced way to buy BTC and requires placing bids and offers. Trading fees are often low when you use this method, but, as we mentioned, it can be difficult.

Holding your Bitcoin on a centralized platform like an exchange means trusting the exchange to protect your assets. Assets held on an exchange are at risk of hacks, phishing attacks and potential mismanagement by the exchange operators.

To avoid counterparty risk and have complete control over your Bitcoin, consider withdrawing your funds to a personal wallet after you have completed your purchase or trade.

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Buying Bitcoin from a trading app

Trading apps allow you to manage various investments such as cryptocurrency and stocks in one location.

If you’re familiar with traditional stock and commodities trading apps such as SoFi, Webull or Robinhood, then you can quickly utilize these platforms to start trading Bitcoin. They tend to have a focus on ease-of-use and are mobile-friendly.

Although trading apps and brokerages will give you direct exposure to the price of Bitcoin, they may not give you the actual coins for you to control. This means you won’t be able to move your BTC off the platform to your personal wallet or another trading platform. This simplifies the experience, but may be an issue for anyone who wants the full experience and security of using crypto.

Buying Bitcoin from PayPal

It’s really convenient to purchase Bitcoin on PayPal considering PayPal’s interface is easy to navigate. You can even use the Bitcoin on your PayPal to make purchases on millions of online stores confidently, knowing PayPal’s fraud protection covers you.

Some exchanges also support PayPal as a deposit method. You can transfer funds from your PayPal account to the exchange and purchase Bitcoin directly.

PayPal charges higher fees than most traditional crypto exchanges, with purchases over $200 incurring a 1.8% fee. If you’re looking to purchase large amounts of Bitcoin, PayPal may not be your best option.

Also, please keep in mind that you can’t send the BTC that you purchase on PayPal to an external crypto wallet. PayPal custodies your Bitcoin for you.

Buying Bitcoin from Venmo

It’s quite convenient to purchase Bitcoin on Venmo, as well. Much like PayPal, Venmo’s interface is clean and user-friendly.

One of the main differences between Venmo and PayPal, though, is that Venmo is a social app through which you can broadcast your Bitcoin purchases if you’d like.

Like PayPal, Venmo charges higher fees than most crypto exchanges, as you’ll pay 1.8% on Bitcoin purchases between $200 and $1,000.

Also like PayPal, you can’t send the Bitcoin that you purchase on Venmo to an external crypto wallet.

Buying Bitcoin from Cash App

Cash app is another handy app through which you can purchase Bitcoin.

Like PayPal and Venmo, Cash App makes buying Bitcoin simple. But like PayPal and Venmo, the fees for purchasing BTC are quite high – approximately 1.75%.

However, there is one major differentiator between Cash App and PayPal and Vemno – you are able to send your Bitcoin from your Cash App wallet to another crypto wallet.

Hence, you get the convenience of buying Bitcoin in an easy-to-use app and the option of sending it to a more secure, offline wallet if you so please.

Buying Bitcoin from a traditional broker

You cannot buy Bitcoin directly from traditional financial brokers like Charles Schwab or Fidelity.

Instead, you can buy financial products based on Bitcoin’s price, like Bitcoin futures products (e.g., the Proshares Bitcoin Strategy ETF) or shares of the Greyscale Bitcoin Trust (GBTC).

When you buy these types of Bitcoin-related financial products, you don’t technically own any Bitcoin. These products are mostly used for speculative purposes.

Buying Bitcoin from a Bitcoin ATM

Buying Bitcoin using an ATM is a way to purchase the digital currency in a physical location. The process typically involves using cash or a debit card to purchase Bitcoin, which is then transferred to a digital wallet, which you must have set up before using the ATM.

The benefit of buying Bitcoin through an ATM is the convenience and immediacy of the transaction.

However, it’s worth noting that the fees associated are often much higher than purchasing via an online exchange and Bitcoin ATMs are only available in some locations. Also, newbies might feel uncomfortable setting up a Bitcoin wallet address and entering the long string of letters and numbers the address is composed of via the ATM screen.

Buying Bitcoin from a P2P marketplace

A (peer-to-peer) P2P crypto marketplace is a platform that allows individuals to buy and sell cryptocurrencies directly with one another through offers, a bit like eBay. An example of such a marketplace is Paxful.

The exchange or platform helps facilitate Bitcoin transactions by holding funds in escrow via smart contracts on a blockchain network. This ensures that the terms of the trade are met and that the cryptocurrency is transferred securely and transparently.

P2P marketplaces typically support a wide range of fiat currencies, including US dollars.

Low or no fees are common for P2P trades, and since order prices are fixed, you can potentially find Bitcoin below market value.

Purchasing Bitcoin through P2P exchanges on a regular basis can be challenging, as it may be hard to consistently find a seller willing to sell you the exact amount you want each time.

Buying Bitcoin from a crypto wallet interface

For those who believe in the concept of “not your keys, not your Bitcoin“, using a hardware wallet to buy Bitcoin may be a good option. These wallets offer exchange services like Changelly and Simplex, which are integrated into the software apps for wallets from companies like Ledger or Trezor. These apps are easy to use and typically accept credit or debit card payments.

Hardware wallets provide a secure and private way to hold your Bitcoin, which is stored directly on the blockchain rather than being entrusted to a third-party exchange or platform.

Although the Bitcoin blockchain is more secure than exchanges and has never been hacked, your security depends on you. You are responsible for managing your private key or seed phrase, which, if lost, may result in inaccessible funds.

Compare crypto platforms: exchanges, apps and brokerages

If this is your first time buying cryptocurrency, you’ll need to look for a platform that accepts US dollars. Once you’ve purchased your Bitcoin, you should be able to transfer it to another exchange later, so don’t worry too much about extra features for now.

Use the table to choose a platform that meets your needs, and click the Go to site button to get started.

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Name	Product	Deposit methods	Fiat Currencies	Cryptocurrencies	Offer	Disclaimer
OFFER SoFi Invest Crypto SoFi Invest Crypto	OFFER	Bank transfer (ACH), Cash, Debit card, Wire transfer, Rollover or personal check	USD	30 cryptocurrencies	Win up to $100 in crypto with a qualifying first trade. T&Cs apply.		Go to site View details	Compare	loading Fetching your data...
OFFER eToro USA LLC Cryptocurrency Trading eToro USA LLC Cryptocurrency Trading Finder Award	OFFER	Bank transfer, Debit card, PayPal, Wire transfer	USD	51 cryptocurrencies	Get $15 when you sign up and buy $100 of crypto. T&Cs apply.	Disclaimer: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.	Go to site View details	Compare	loading Fetching your data...
OFFER KuCoin Cryptocurrency Exchange KuCoin Cryptocurrency Exchange	OFFER	Bank transfer, Credit card, Cryptocurrency, Debit card, P2P	USD, EUR, GBP, RUB, CNY, AUD, KRW, JPY, TRY, VND	742 cryptocurrencies	Sign up through Finder and get a free 14-day VIP upgrade to reduce your trading fees. T&Cs apply.		Go to site View details	Compare	loading Fetching your data...
Kraken Cryptocurrency Exchange Kraken Cryptocurrency Exchange Finder Award		Bank transfer, Credit card, Cryptocurrency, Debit card, Apple Pay, Google Pay	USD, EUR, CAD, AUD, GBP, CHF, JPY, AED	186 cryptocurrencies			Go to site View details	Compare	loading Fetching your data...
OFFER Uphold - Digital Asset Platform Uphold - Digital Asset Platform	OFFER	Bank transfer, Credit card, Debit card, Bank transfer (SEPA), Apple Pay, Google Pay	USD, GBP, AUD, EUR, CAD, CNY, JPY, SGD, INR, NZD	229 cryptocurrencies	Refer a friend to earn US$20 — $10 for you and $10 for the person you refer. T&Cs apply.		Go to site View details	Compare	loading Fetching your data...

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Is Bitcoin safe to invest in?

All investments have risk associated. Before you buy Bitcoin, make sure you do due diligence in research and understand these risks:

Price volatility.

Bitcoin’s price is largely based on speculation, meaning it can rise or fall quickly. It’s common for Bitcoin to move by 5% or more in a single day.

Exchange vulnerabilities.

Leaving your Bitcoin on a crypto platform exposes you to several counterparty risks, including scams, hacks and theft, and fiscal mismanagement, like we saw in the case of FTX in 2022. To reduce this risk, it’s best to keep your Bitcoin in a non-custodial wallet.

Regulatory uncertainty.

The regulatory environment for Bitcoin and other cryptos is constantly changing. In some countries owning and trading Bitcoin is legal, and in others it isn’t. Even in countries in which it is legal to own Bitcoin or other cryptos, there can still be some jurisdictions that don’t permit certain Bitcoin or crypto services and platforms. For example, not many crypto companies are permitted to operate in New York State in the US, so there are only certain ways to buy Bitcoin in the state of NY.

Novel technology.

Bitcoin was created in 2009, making it relatively new as a form of technology and currency. Bitcoin doesn’t yet have the same track record or performance history as some other asset classes.

Technological learning curve.

If you plan to invest in Bitcoin and to custody the asset on your own, you’ll have to learn how to use a non-custodial crypto wallet.

Wallet vulnerabilities.

The Bitcoin network is near-impossible to hack, but the hardware and software used to manage your funds – known as wallets – can still be vulnerable. We researched BTC wallets and shared which ones we felt were best.

Transactions can’t be reversed.

Once you’ve submitted a transaction to the Bitcoin network, it can’t be canceled or reversed. Double-check the receiving address before sending a Bitcoin payment or moving Bitcoin off an exchange. One good way to do this is to check the first and last four digits for the address of the wallet you are sending to before setting the transaction in motion. There is no way to refund BTC sent to the wrong address.

What to look for in a crypto platform?

There are a few key factors to keep in mind when looking for where to buy Bitcoin.

Check your exchange is FinCEN registered.

If you choose to buy Bitcoin via a crypto exchange, it’s good practice to use a locally registered exchange. It’s more likely to accept US dollars and local payment methods like SWIFT, which helps avoid foreign exchange fees. Choosing a US-based exchange also means the exchange is likely to be registered with the Financial Crimes Enforcement Network (FinCEN), which means it has to comply with local laws in the US.

Set up 2-factor authentication.

Whether you use an exchange or a financial app, look at the platform’s security features, like 2-factor authentication and PGP-encrypted emails. Cold storage of user funds is considered an industry standard, but insurance funds are less common and indicative of good security practices.

Learn whether the exchange has insurance fund.

A small number of exchanges now offer insurance on users’ funds. Two of these exchanges are Coinbase and Gemini. Beware that policies vary significantly between exchanges, so you’ll need to research this thoroughly if insurance is important to you.

Decide where you will custody your Bitcoin.

Where is your Bitcoin stored? If you plan to keep it on the platform you purchased it on you may want to learn more about their storage practices and how they manage customer funds. Certain platforms like PayPal and Venmo don’t allow you to custody your own Bitcoin. These apps hold your Bitcoin in their custody. Others like Coinbase or BInance.US allow you to move the funds you purchase via the exchange into a crypto wallet. But when you do this, the responsibility to manage your assets responsibly falls entirely on you. If you lose the private keys to your Bitcoin, that Bitcoin is lost forever.

Bottom line

Before purchasing Bitcoin, compare a range of crypto exchanges and brokerages available in the US. Look at their features, fees, security and overall reputation to decide which platform best suits your needs. Consider an exchange registered with FinCEN for added peace of mind.

Remember that owning and using Bitcoin is not without its risks. Consider investing in Bitcoin as part of a wider investment strategy, and talk to a financial advisor if you have any questions about cryptocurrency investing.

Once you’ve purchased Bitcoin, think about your short- and long-term goals. This will help you decide whether to keep it on an exchange or move it to a non-custodial wallet.

Frequently asked questions

• Can I buy Bitcoin without ID?

  There are still a small number of ways to buy Bitcoin (BTC) without an ID. However, it tends to be safer to purchase BTC through a platform that’s registered with FinCEN. You won’t be able to create an account on a FinCEN-registered platform without providing identification as part of the Know Your Customer (KYC) verification process.

• How is Bitcoin taxed?

  If you hold Bitcoin as an investment, you’ll be taxed on any capital gains you make when you sell it, including spending it on goods and services. In the US, tax obligations also apply to mining, professional Bitcoin trading and a range of other scenarios, so make sure you’re fully aware of what you need to report to the IRS.

  Learn more in our crypto tax guide, or use our round-up of the best crypto tax software to make tax reporting more straightforward.

• What will I need to buy Bitcoin?

  You only need an email address or mobile number to create an account with your chosen crypto platform. This will usually allow you to deposit cryptocurrency, but not USD.

  You’ll need to pass a Know Your Customer (KYC) check to buy Bitcoin using US dollars.

  This is a standard security procedure for most exchanges in the US and requires you to upload a photo ID and, in some cases, a selfie with today’s date.

  KYC is usually approved instantly, but you may have to wait a few hours or days in rare cases.

• Can I buy Bitcoin for $10?

  Yes, Bitcoin can be divided into fractions, called Satoshis, allowing you to purchase small amounts for $10 or even less. Many investors buy Bitcoin in small recurring quantities, like $5 daily.

• How do beginners buy Bitcoin?

  Beginners will probably find it easiest to buy Bitcoin from a crypto exchange that offers instant purchases with USD. Once you’re comfortable, buying Bitcoin on the spot is usually a less expensive option.

• How much Bitcoin should a beginner buy?

  Bitcoin is widely considered a high-risk asset, so you should only invest what you can afford to lose.

  To help cushion the highs and lows of market volatility, consider dollar-cost averaging (DCA). DCA involves buying small amounts of Bitcoin at regular intervals, such as every week or month. This strategy removes some of the emotion from investing and can help support a long-term investing plan.

• What is the safest way to buy Bitcoin?

  The safest way to buy Bitcoin is through a reputable cryptocurrency exchange or broker that complies with US laws and regulations. Look for one that promotes stringent security measures such as registration with FinCEN, KYC for all users, 2-factor authentication, and an insurance fund.

  Once you’ve purchased some BTC, consider moving it into a self-custodial wallet for added security.

• What is the best way to buy Bitcoin?

  The best way to buy Bitcoin is to identify your investment goals first. Do you plan to trade frequently or hold long-term?

  For regular trading, fees are lowest on a spot market, while casual investors might feel the convenience of a higher-fee instant purchase is worthwhile.

  Compare exchanges and trading platforms to decide the best place to buy Bitcoin.

• How do I sell Bitcoin?

  The most common way to sell Bitcoin is through a crypto exchange, investing app or brokerage. Other options are Bitcoin ATMs and P2P marketplaces. There are a variety of factors to consider when selling BTC. Before registering on a platform, be sure to check that the asset is listed and that your desired fiat currency is supported for withdrawing to a bank account. Compare platforms to find the lowest deposit fees, withdrawal fees and transactional fees.