How to Buy Bitcoin: The Complete Guide

Read our guide and start buying Bitcoin today.

Over the last decade, Bitcoin has established itself as a new asset class. From institutions like Tesla, Square, Galaxy Digital investing in BTC to its rising relevance as a payment method - Bitcoin has undoubtedly made its mark.

The rising popularity of Bitcoin is leading institutional and retail investors to invest in Bitcoin and add cryptocurrencies to their portfolios. In this article, we take a deep dive into how to purchase Bitcoin. Additionally, we also take a look at which factors to consider and the different methods to store your BTC.

How to Buy Bitcoin

With the growing prominence of Bitcoin, many institutions now offer the services to buy and sell BTC. Here are the basic three parts that are common for making Bitcoin investments.

Select a Suitable Cryptocurrency Exchange Platform

A crypto exchange is a digital marketplace where you can buy and sell various cryptocurrencies like Bitcoin with a regular currency like the U.S. Dollar. Crypto exchanges also facilitate the trading of one cryptocurrency for another. These marketplaces incorporate an order book for buyers and sellers to trade in a particular asset. 

These exchanges offer different features and functionalities. Here are some of the factors to consider while choosing a cryptocurrency exchange for buying Bitcoin. 

  • Authenticity - Several fake platforms, disguising themselves as legit cryptocurrency exchanges, have started offering services in digital assets. Hence, it is crucial to perform thorough due diligence to ensure the authenticity of the platform.  
  • Security - Malicious actors often engage in hacking to steal funds from exchanges. It is vital to check if the platform deploys a secure architecture and provides practices such as 2FA to protect their clients’ funds.
  • Fees - Exchanges charge a certain percentage of the Bitcoin trade as transaction fees. It is necessary to check the fee structure of the platform before placing the trade. 
  • Crypto exchange calculator - A crypto exchange calculator will indicate the exact amount needed to purchase Bitcoin in exchange for fiat currency. It is a good practice to check the total amount before placing the order for buying Bitcoin. You can find a crypto exchange calculator on our website here. 
  • User interface - A smooth and frictionless user interface ensures the best experience of engaging in digital assets like Bitcoin. 
  • Payment methods - If the exchange provides services in your native country, also look for the payment methods being offered and accepted by the platform. 

These are only some of the important factors you need to take into account when selecting a crypto exchange. To make the right choice, you will need to take into account many more. On our website, you will find probably the most advanced comparison algorithm for finding the best crypto exchange for your needs.

After considering the factors mentioned above, you can open an account on your preferred digital assets exchange. Once you have successfully created your account, log in to your account. You will be asked to upload a scanned copy of government-issued means of identification. 

Find the Best Crypto Exchange for You

Choose Your Payment Method

Once you have calculated the amount in a crypto exchange calculator, you can place your trade order for buying Bitcoin (BTC).

Always ensure to double-check the amount you have entered for exchanging fiat to purchase BTC and proceed to the next step of selecting a payment method.

There are several payment methods available on various exchanges. These vary from exchange to exchange, but some are universal to the majority of crypto exchanges. They include PayPal, Credit /Debit cards, bank transfers, etc.

How to Buy Bitcoin With PayPal

Leading cryptocurrency exchanges offer PayPal as a payment method to purchase BTC. All you have to do is add the amount and select PayPal as your purchase method. You will then be redirected to the PayPal website, where you will have to log into your account and confirm the transaction. Once this is done, you'll be redirected back to the exchange's website. 

Moreover, PayPal has also announced that users can now buy, hold, and sell cryptocurrency directly using their PayPal accounts. As of July 2021, these services from PayPal are available to U.S. citizens. 

To buy Bitcoin from PayPal, follow these steps. 

  1. Log in to your PayPal account and click the ‘Crypto’ button in the top-right corner of your dashboard. The ‘crypto’ button is right next to the ‘Send’ and ‘Request’ buttons. 
  2. Select ‘Bitcoin’ from the list of cryptocurrencies that appear. This will further show a window displaying the current market price of Bitcoin, its price chart, and other related information. 
  3. Click the blue ‘Buy’ button near the bottom of the page and enter the amount of bitcoin you wish to purchase or select one of the pre-set amounts displayed on the screen. 
  4. Select the preferred payment method and click on ‘Buy Now.’ 

Once your order is placed, you will receive a confirmation, and the exchange will reflect the volume of bitcoins you purchased on your PayPal account dashboard.

Apart from PayPal, leading exchanges that offer services for buying BTC and other digital assets include Binance, Coinbase, Paxful, and more. You can send your PayPal funds to these exchange platforms to buy cryptocurrencies. 

How to Buy Bitcoin With a Credit Card

Apart from PayPal, another popular option for purchasing Bitcoin is through credit or debit cards. So, how to buy Bitcoin with a credit card?

On leading cryptocurrency exchanges, you will get this option on the payment page. Click the ‘Add payment’ button and select the ‘Debit/Credit Card’ option.

You need to fill in your credit card details into the form that the screen displays. The required information is the card number, card number, expiration month and year, CVC number, and postal code.

Once you have carefully filled in all these details, click the ‘Add Card’ button, and you’ll be faced with a confirmation screen that says ‘Credit Card Added.’ Now, you can use your credit card to buy Bitcoin directly from the platform.

Placing Your Order

After you have entered the relevant details of the Bitcoin trade:

  1. Ensure that all the figures are correct.
  2. In the next step, choose your preferred payment method.
  3. Place the order to become a Bitcoin holder. 
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We Understand That the World of Crypto Trading Might Sound Complex and Difficult

That’s why we’ve put together a comprehensive page full of useful information to get you started on the world of day trading

Where to Store Your Bitcoin

One of the key factors after purchasing Bitcoin is to store them on a secure wallet. Your storage method must be completely secure so that hackers or malicious actors cannot access your BTC. 

Bitcoin is stored in a digital wallet that is represented with a wallet address. Digital wallets usually fall into these categories: 

  1. Web-based wallets or hot wallets
  2. Hardware-based wallets or cold wallets

Let’s understand the difference between these two wallets and also which option is more secure. 

Hot Wallets or Web-based wallet

A hot wallet is a web-based digital wallet that is easily accessible with access to the internet. Bitcoins are stored online in the hot wallet so that you can access them from anywhere through your smartphone or laptop. 

If you are a regular cryptocurrency user or trader, you may need to use a hot wallet for convenience. A hot wallet can be accessed quickly and easily but requires a constant internet connection to work. 

Hot crypto wallets can be categorized into software wallets, exchange wallets, and mobile wallets. 

  • Exchange Wallet - Wallets provided by crypto exchange platforms are hot wallets. In other terms, if you are storing your Bitcoin on any exchange platform, they control the custody of your digital asset. 
  • Software Wallet - A software wallet is a web-based wallet installed on your computer or desktop that holds the private key of your Bitcoin or any other crypto. 
  • Mobile Wallet - A mobile crypto wallet enables accessibility to your cryptocurrency funds through your mobile phone. It stores your crypto funds i.e., private keys to your tokens like Bitcoin in a smartphone.

Cold Wallets or Hardware-based wallets

They are also called hardware or offline wallets because they are not connected to the internet, and they typically require a USB drive device that carries your private keys. Cold wallets are considered more secure for storing your tokens’ private keys. They are only connected to a computer and the internet while performing a transaction. They are relatively less accessible in comparison to different types of hot wallets but provide optimum security. 

Cold wallets are categorized into hardware wallets and paper wallets.

  • Hardware wallets - Hardware wallets are the most secure digital wallets because your private keys are not in contact with your network connection. So, it is almost impossible for hackers and other criminal elements to steal your Bitcoins.
  • Paper wallets - Paper wallets are another type of cold wallet that functions without a user interface. It is a piece of paper containing your private and public keys, which you can use to access your Bitcoins.

The cold wallet is almost impossible to hack. On the other hand, these cost much more than the hot wallets. 

Buy Your First Bitcoin

Now that you've learned how to buy Bitcoin, it's time to make your first purchase.

If you don't know which platform to use, check out our crypto exchange comparison page. You just need to answer a few simple questions (it will only take 2 minutes - we promise!), and our algorithm will show you which crypto exchange is best suited for your needs. Try it now!

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