Guide on How to Buy Bitcoin

Bitcoin’s price experienced incredible growth in the last decade. It started out as the first mainstream cryptocurrency and became the most recognized one in the world. At the end of 2023, Bitcoin managed to reclaim its position as one of the top 10 global assets with a market cap of $850 billion.

More and more people are now wondering how to buy Bitcoin. This comes after the increased institutional acceptance of this cryptocurrency, powered by the SEC’s decision to allow the release of BTC ETFs.

Buying Bitcoin has never been simpler. This comes despite the complicated blockchain technology and the widespread uncertainty that usually comes with purchasing Bitcoin. Here, we’ll show you how to buy such crypto tokens, as well as where and where to buy and store them.

A few things to have in mind before buying BTC

Before we reveal how to buy Bitcoin, there are a few crucial things that you must know beforehand. First of all, crypto holders and traders as well as experts consider all cryptocurrencies a high-risk investment. This goes for both, new and experienced buyers.

This, in part, has to do with the decentralized infrastructure on which these cryptocurrencies are operating. So, you must have a risk management strategy in place before you purchase Bitcoin.

Secondly, Crypto Companies and cryptocurrencies are focusing on disconnecting the centralized control from the process. As a result, they utilize peer-to-peer (P2P) exchange as a core concept.

This shift comes with new security and privacy risks that don’t feature within the traditional finance market. The absence of third-party intermediaries requires investors to take control of privacy and security. They also need to protect their assets, which exposes them to far more vulnerabilities.

Thirdly, Bitcoin experiences sudden price fluctuations that make it very difficult to navigate or predict. This is due to the highly volatile market that Bitcoin and other cryptocurrencies operate in.

Next, legal and regulatory factors cause additional complexity in the crypto market. Cryptocurrencies are operating in a mostly unregulated and constantly evolving legal environment. This makes the protection of the customers very demanding.

Bitcoin investments also come with certain taxes and are subject to some country rules. All profits from trades, sales, or payments will usually trigger capital gain taxes. On the other hand, the Bitcoin you earn via staking or mining is immediately taxable.

Finally, you should know that failing to report your Bitcoin earnings can result in fines and penalties. This comes regardless of the great privacy feature of cryptocurrencies and Bitcoin-specific investments.

Buying Bitcoin tokens is a very simple process that won’t take long to complete. If you’re just starting out with cryptocurrencies, then we advise you to follow our step-by-step guide below.

Where Can You Buy Bitcoin?

The first step that we mentioned in our step-by-step guide was deciding where to buy Bitcoin. So, at this stage, we’ll provide some additional information as it’s very important to be aware of your options. After that, you can assess the available options with your risk appetite, goals, and wider investment strategy.

1. Crypto Exchanges

Most crypto traders consider Cryptocurrency exchanges as the best way to buy Bitcoin. But, we must mention that some of them offer only the most popular cryptocurrencies while others feature thousands of tokens.

You will come across two types of platforms, Centralized Exchanges (CEXs) and Decentralized Exchanges (DEXs). A centralized entity operates with the first kind while the DEXs rely on blockchain technology that operates without any intermediaries. The latter uses smart contacts to conduct automatic transaction execution.

2. Cryptocurrency Apps

You are also capable of buying Bitcoin directly through a cryptocurrency app. These apps usually take the form of a crypto wallet. With the help of blockchain technology, you can buy digital assets within the software or project’s wallet.

It’s super important for you as an investor to know the differences between custodial and non-custodial wallets. That way you can determine whether you can have control of your own assets. Or, on the other hand, you may need to rely on third-party management.

3. Traditional Stockbrokers, Trusts or ETFs

At the moment, only a few traditional brokers provide crypto transactions, but this sector is evolving. The first traditional broker to offer Bitcoin trading was Robinhood. In October 2021, Proshares joined the market by introducing the first Bitcoin-linked ETF.

Some ETFs connect with Bitcoin via holdings in crypto-related companies. Fidelity, on the other hand, made Bitcoin investing possible on 401k accounts in 2022. Another signal of growing institutional adoption came in early 2024 after the SEC approved spot Bitcoin ETFs.

4. Peer-to-Peer Platforms

Peer-to-peer (P2P) platforms conduct direct Bitcoin transactions between traders, which totally eliminates the need for exchanges. You can post a request you purchase or sell Bitcoin and conduct a transaction with another crypto trader.

These platforms utilize a system established on transaction history and not on identity. They offer you a chance to compare Bitcoin prizes and find the best deal. But, they do lack the anonymity of the decentralized exchanges.

Best Places to Buy Bitcoin

Now, it’s time to reveal the best places to buy Bitcoin tokens. The most commonly used platforms include crypto exchanges and brokers. With the first ones, you’ll get a platform where you can track each other’s orders more precisely.

Brokers, on the other hand, conduct transactions directly with the trader. However, the end transaction is usually very similar as both platforms offer you a way to purchase and sell Bitcoin. Without further ado, here are the best places where you can buy Bitcoin tokens:

1. MEXC: great crypto exchange platform that comes with 0% spot trading fees and above 1,000 cryptocurrencies
2. OKX: another top crypto exchange with over 350 cryptocurrencies that relies on a bot marketplace and trading bots
3. Coinbase: a publicly trading crypto exchange platform that features over 250 cryptocurrencies and offers advanced trading
4. Binance: one of the largest crypto exchanges in the world with around 350 cryptocurrencies and options for futures trading

1. MEXC

We start off with MEXC, as it’s the best crypto exchange platform not only for buying Bitcoin but many other crypto tokens. It currently features over 1,000 cryptocurrencies, where many of them don’t feature on other major exchanges like Binance and Coinbase.

Here, you get to trade crypto tokens with a 0% spot trading fee. You can also trade crypto with a 0.02% fee for market orders and a 0% fee for limited orders. These percentages are by far the lowest in the crypto exchange sector.

Furthermore, MEXC provides advanced charts and trading tools. Among them are the integrated TradingView charts and order book view, which can satisfy every seasoned crypto trader.

But, this doesn’t mean that inexperienced traders aren’t welcome on the platform. It’s actually the opposite, as beginners can simply purchase Bitcoin or any other crypto token without any struggle.

They can conduct these transactions via bank, SEPA transfer, or credit/debit card. But, that’s not all, as users can also use Google Pay or Apple Pay through third-party services like Mercuryo or Moonpay.

There is even a MEXC Savings option that allows you to grow your crypto portfolio. It’s similar to crypto staking, where you can lock your tokens for a period of time. This will accrue interest in the form of more tokens.

For instance, Bitcoin has an APR of up to 1.8% while USDT has up to 8.8% APR. However, there are some limitations on the amount you can earn. On some coins, you can generate a maximum APR of up to $300. So make sure to read about them before you decide to lock your tokens.

If you’re an investor who doesn’t want to actively trade crypto yourself, then you can do the following. Use the copy trading feature to follow successful traders and let them trade your tokens for you. This useful tool can potentially increase the size of your portfolio.

Fees and Pricing

2. OKX

The second largest cryptocurrency exchange platform according to derivatives trading volumes is OKX. This indicates that OKX is great for purchasing Bitcoin. But, it’s also perfect for trading this cryptocurrency and derivatives thanks to OKX’s low trading fees.

If you’re looking to purchase Bitcoin tokens, then you can do it directly at OKX. For that purpose, you can use a card, Google Pay, or Apple Pay. But, you must first register and verify an account before you can conduct transactions.

After buying BTC, you can hold it on the exchange platform or maybe use the OKX Earn option. The latter will allow you to generate an income if you decide to lock your coins. At the moment, Bitcoin has a 5% APR and it comes with a flexible lock. This allows you to unlock your assets at any time.

When it comes to spot and derivatives trading, OKX is among the best. It comes with a 0.01% sports trading fee for market orders and 0.08% for limit orders. You can even lower the fees even further. This is possible by holding OKB coins or a certain amount of assets in USD.

This platform is also popular for its bot marketplace. It allows you to subscribe to trading bots or create your own and sell it to other users to earn extra funds.

Fees and Pricing

3. Coinbase

Coinbase is a company that trades on the Nasdaq stock exchange under the ticker COIN. It features over 100 million users worldwide, which makes it the largest publicly traded exchange platform at the moment.

The company’s initial purchase offering (IPO) valued Coinbase at $86 billion. This helped them build a stable exchange platform for trading and other crypto-related services. Among them are crypto lending, storage, and staking services.

Users enjoy many benefits of using a publicly traded exchange in the form of regulation and transparency. Coinbase’s earnings reports and SEC fillings offer a modern view of the financial health of the company. It does that by also adhering to the regulations in the US and many other markets.

With the help of Coinbase Advanced, you’ll end up saving money on trading fees. It’s a feature-rich trading platform that comes with Trading View charts, which provide over 100 trading indicators.

Despite being “Advanced”, this platform isn’t difficult to use. Coinbase made sure to include trading controls that provide an easy reach and offer helpful tips.

The trading fees that feature at Coinbase Advanced are lower than the fees at some competitors. Here, you’ll find limited order trading fees at just 0.6%.

Fees and Pricing

4. Binance

Last but not least, we have Binance, which is an exchange that offers the cheapest way to buy Bitcoin. However, the country you reside in is very important. For instance, in the US, you can only access Binance.US, which became a crypto-only exchange.

So, to purchase Bitcoin on Binance.US, you must transfer USDT coins onto your account via a third-party provider. After that, you can trade the USDT for BTC tokens with zero trading fees.

We went through the troubles of executing such a transaction and we discovered that $100 worth of USDT cost around $112. However, we must point out that the fees vary depending on the network demand and region.

Although Binance.US is super easy to use, the additional step of purchasing crypto before acquiring Bitcoin makes it less attractive. Because of that, many US users prefer to buy Bitcoin at Coinbase.

The Binance Advanced Trade platform comes with many advanced features. Some users who are only using the platform for buying Bitcoin dislike these features. In the Advanced Trade service, you’ll find trading tools such as margin trading, which gives you a chance to trade with leverage.

Some other advanced features that we can mention are trading bots and futures trading. The first ones allow you to make trades automatically. With the latter, you can speculate on the future price of BTC or other crypto coins.

Fees and Pricing

Other Ways to Buy Bitcoin

As cryptocurrency evolves rapidly, newer and better ways to buy Bitcoin arise on a regular basis. Below we’ll reveal the most common payment methods to buy Bitcoin.

1. Using a Credit Card

You can choose to use a credit card to purchase Bitcoin. However, these transactions usually come with higher fees than the other payment options. Because of that, many traders avoid it altogether. In the beginning, exchanges and credit cards didn’t support these transactions. But, this isn’t an issue anymore.

2. Purchasing Bitcoin With PayPal

There are a few ways to buy Bitcoin with PayPal. You are free to deposit funds into a crypto exchange using PayPal. Or, you can fund your account and purchase BTC tokens directly on the platform. Many users who are familiar with PayPal’s user interface prefer the latter option

3. Buy Bitcoin With Cash

Purchasing Bitcoin is also possible with cash funds. To do this, you must deposit cash into a Bitcoin ATM. These are actually normal ATMs, but they connect to your wallet instead of a bank account. Just make sure to check the fees before conducting such transactions.

Conclusion

Investing in Bitcoin seems like a very prosperous activity that anyone can conduct. It seems like this type of investing will become much easier and more accessible in the future. This is due to the crypto industry getting closer towards decentralized finance and institutionalization.

However, you have to keep in mind that diversification is crucial for risk management when investing in Bitcoin. You must construct a well-balanced portfolio that should feature more than just Bitcoin tokens.

We suggest getting various coins with diverse use cases, market caps, and blockchain networks. With this approach, you can effectively spread your investments across the broader crypto market.