Invest with low fees today in the highest ROI financial asset of the last decade. Buying Bitcoin online has outperformed the S&P 500, commodities, and all other popular investment opportunities.
Bitcoin is the world’s first and most popular cryptocurrency. It is also the top-performing asset in the world, rising in value from just a few cents in 2010 to as high as $69,000 just over a decade later, that all-time high being hit in Nov 2021.
People buy Bitcoin for various reasons. It’s seen as a hedge against inflation, a store of value – like ‘digital gold’ – and a medium of exchange. Many expect it to set new highs following the 2024 Bitcoin halving, and as of 2023, the Bitcoin price is trading at a discount.
If you’re new to Bitcoin, you’ll want to learn how it works and the best places to buy Bitcoin safely. Many platforms vary in services, trading features, fees, and deposit methods. In this how-to guide, we walk you through how to buy Bitcoin online and review the best crypto exchanges.
How to Buy Bitcoin (BTC) – Quick Guide
- Choose a Bitcoin exchange – we recommend eToro.com as it’s FCA, ASIC, and CySEC regulated.
- Create an account and deposit funds – Paypal, credit card, bank transfer, and more methods are accepted.
- Search ‘Bitcoin’ or ‘BTC’ in the top menu
- Click ‘Open Trade’ and select an amount of Bitcoin to buy
Where to Buy Bitcoin Online Safely – eToro Tutorial
Looking for a more comprehensive walkthrough of how to buy Bitcoin online? If so, the section below will show you exactly what you need to do to get your hands on Bitcoin safely and cost-effectively.
Step 1: Open an Account
The end-to-end process of opening an account, depositing funds, and buying Bitcoin can typically be completed in less than 10 minutes at eToro. This is because the platform uses automated technology to verify your details.
To start investing in Bitcoin, visit the eToro.com website and create a free account. You will see a box like the image below and must enter your first and last name, email address, phone number, username, and password.
On the next page, you will be asked for additional personal information – such as your country of residence, home address, date of birth, and national tax number. eToro will then send an SMS to your mobile phone. To complete your registration, enter the code eToro sends you when prompted.
Step 2: Upload ID
As noted above, eToro is regulated by several reputable bodies. As such, you will need to have your identity verified. You can complete this step at a later date – but it does need to be done before you can:
- Deposit more than $2,250
- Make a withdrawal
With this in mind, it’s best to quickly upload the required documents now to avoid any delays in the future.
This requires a copy of your:
- Passport, driver’s license, or national ID card
- Utility bill or bank account statement issued within the last three months
In most cases, eToro will authenticate your documents immediately and remove all account restrictions.
Step 3: Make a Deposit
eToro doesn’t offer direct Bitcoin purchases, meaning you must first deposit some funds. Apart from a bank transfer, all deposit methods are credited to your account instantly.
You can choose from the following:
- Debit/credit card (Visa, MasterCard, Maestro)
- Local bank transfer (country-specific)
- International bank wire
Regarding fees, eToro charges just 0.5% on deposits – irrespective of the payment method. This is much cheaper than some of its main competitors, with Coinbase setting 3.99% to buy Bitcoin with a debit card.
Furthermore, if you are a US resident depositing funds with a USD-backed payment method, there is no transaction fee. The minimum deposit is $10 for US and UK residents and $50 for most other countries.
Step 4: Search for Bitcoin
It would be best if you now had an eToro account funded at this stage of our step-by-step guide. Now it’s time to buy Bitcoin. The easiest way is to enter ‘BTC’ into the search box at the top of the page.
Then, you’ll need to click the ‘Trade’ button to open an order box.
Step 5: Buy Bitcoin
You can now buy Bitcoin by entering the size of your stake into the ‘Amount’ box($25 minimum).
Finally, click the ‘Open Trade’ button to complete your investment.
Compare Bitcoin Exchanges
68% of retail CFD accounts lose money…
74% of retail investor accounts lose money when trading CFDs with this provider…
The price and value of any investment in digital asset products can fluctuate…
The traded price of digital tokens can fluctuate greatly within a short period…
Market prices for digital tokens can be volatile and highly unpredictable…
As with any asset, the values of digital currencies may fluctuate significantly…
The value of digital currencies can go up or down frequently…
71% of retail CFD accounts lose money…
As prices of digital assets are highly volatile, users could lose all or a substantial portion of the value of any digital asset they purchase.
Where to Buy Bitcoin
The Bitcoin market has matured quite a lot. Due to its popularity, there are now several options where you can buy Bitcoin. This is in sharp contrast with what was applicable some years back.
Everyone provides easy access to digital assets, from crypto-facing exchanges and brokerages to those that serve other asset classes.
However, the problem with this variety is that finding the best place to buy Bitcoin is a bit challenging. In this guide, we’ve vetted the platforms and provided a condensed section on their features, fees, and what makes each unique.
To save you from researching dozens of different platforms, below, you will find the best places to buy Bitcoin.
1. eToro – Overall Best Place to Buy Bitcoin
eToro is now a fan-favorite with crypto investors and is arguably the best place to buy Bitcoin. This online broker offers various assets and markets, including many leading digital currencies. You can purchase heavyweight crypto-assets like Bitcoin, Ethereum, and Ripple and Defi coins like Aave and Kyber Network.
Founded in 2007, there are many reasons why eToro has grown its client base to over 20 million investors. Firstly, the platform is really easy to use – so if this is your first time buying Bitcoin online – eToro has you covered. Additionally, eToro offers super low commissions so that you can buy Bitcoin without hefty fees.
In terms of fees, few Bitcoin brokers can compete with eToro. eToro is a zero-commission platform. The online broker makes it possible to buy Bitcoin without paying a penny in commission. Instead, the broker charges a small fee of 0.5% FX when you deposit.
eToro provides withdrawal and deposit options for several top channels – including PayPal, Neteller, debit, and credit cards.
eToro is heavily regulated. The brokerage firm has licenses from the likes of the UK’s Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), and the Australian Securities and Investment Commission (ASIC). In the United States, it is registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
- Accepts debit/credit cards and bank transfers
- Buy Bitcoin or copy trade Bitcoin traders
- Minimum deposit of just $10
- Accepts traders worldwide
- Regulated by the FCA, ASIC, and CySEC
- Approved by the SEC and FINRA
- A withdrawal fee of $5
- The platform is denominated in US dollars
2. OKX – Buy Bitcoin via DEX or CEX
Launched in 2017, OKX is a Seychelles–based cryptocurrency exchange that offers both DEX and CEX that investors can use to buy Bitcoin. OKX DEX is a DEX aggregator that leverages X Routing to find the best liquidity pools with low slippage and network fees, allowing veterans to swap crypto assets for Bitcoin easily without providing any details.
However, most of the platforms’ features are present in OKX CEX. OKX CEX supports over 350 cryptocurrencies and features utilities like general trading, spot trading, derivatives, and margin trading. The platform also has tools such as Copy Trading and Trading Bots. The former allows users to tap into the trading signals of more successful traders, and the latter will enable investors to automate their trading process.
Regarding fees, OKX follows a maker/taker fee model. The charges start at 0.080%/0.1% but can be reduced, provided users have enough OKB tokens in their trading account.
Another reason users prefer OKX to buy Bitcoin is because of OKX Risk Shield. The OKX Risk Shield is an asset-risk reserve where certain portions of a user’s assets are stored. It protects users’ funds from any undue security risks.
- Offers CEX and DEX features
- Allows users to copy the signals of other successful traders
- Supports over 350 cryptocurrencies other than Bitcoin
- Not available in the US
- The fee can only be reduced by holding OKB tokens
3. Bybit – Buy Bitcoin via a User-Friendly Crypto Trading Platform
Bybit is a cryptocurrency exchange that arrived in 2018 and quickly gained traction in 2022 and early 2023 to become among the world’s top 10 cryptocurrency exchanges. Currently positioned at #6, Bybit maintains a regular trading volume of around $600 million.
The platform is among the best places to buy Bitcoin because of its many utilities. For one, it allows users to buy Bitcoin or other assets with a click. AInaddition to P2P Trading, Bybit offers spot trading and margin trading facilities.
This cryptocurrency exchange also doubles as an educational platform, offering a learning program that allows users to discover altcoins, learn about DeFi, or start trading. And like OKX, it also features Copy Trading and trading bots.
Bybit has a standard fee structure with a maker/taker fee model. The trading fee varies on the type of trade an investor is engaged in. Another determinant factor is whether a user is a VIP or a non-VIP.
Bybit also has an audited proof of reserve, with a 1:1 account on all user’s assets on the platform. Users can view their audit data or the Bybit reserve ratio.
- Offers a simplified platform for buying Bitcoin
- Among the top 10 cryptocurrency exchanges by market capitalization
- Has a tiered-fee structure
- Offers copy trading
- It has a huge library of articles about cryptocurrencies and crypto trading.
- Not available in the US
- The fee structure can be difficult to understand
- Not a regulated cryptocurrency exchange.
4. Kraken – Popular Exchange since 2011
Kraken is a highly popular cryptocurrency exchange founded in 2011 and headquartered in San Francisco. It has been around for quite a while and has offices worldwide. With over 8 million active users, Kraken can be considered one of those exchanges with a strong pull in the industry. At the time of writing, Kraken is the third largest cryptocurrency exchange in terms of volume traded.
It supports over 120 popular cryptocurrencies and has constantly seen an increase in the number of good projects listed. Three major stablecoins – USDC, DAI, and USDT are supported on the platform, along with seven fiat currencies. These include USD, CAD, EUR, AUD, GBP, CHF, and JPY.
Regulated by FinCEN, Kraken ensures good security regarding holding assets. Ideally, there are two versions of the exchange- Kraken and Kraken Pro. A downside to the business is that not using Kraken Pro forces users to pay more fees to participate in advanced trading products like derivatives or futures. Kraken also offers staking services for several assets.
- Supports seven major fiat currencies
- A popular financial entity regulates it
- Has gained a reputation over the years
- Customer service may be inadequate
- Higher fees levied for non-Kraken Pro users
5. Huobi – Trusted Name to Buy Bitcoin
On Huobi, you can buy Bitcoin and own the underlying asset – spot trading – or trade the Bitcoin price action using virtual contracts – derivatives trading, to earn more BTC or more USDT with a long or short position. It offers up to 200x leverage, more than most Bitcoin trading platforms.
The Bitcoin exchange also has a free grid trading bot that users can set to automate their trades without needing to monitor the Bitcoin markets 24/7. It displays its backtested ROI for the last week.
Huobi, also called Huobi Global, was founded in 2013, in the very early days of Bitcoin, becoming a household name and trusted as one of the best places to buy Bitcoin, like eToro.
Huobi users haven’t experienced any hacking or data leak issues. The exchange offered its assistance to other smaller Bitcoin exchanges that were hacked in the past, such as Bitmart in December 2021, to improve their security protocols.
Bitcoin can’t be staked, but Huobi offers crypto staking on several other coins and tokens for a high annual yield.
- Free automated trading robot
- Gambling for crypto passive income
- High-leverage margin trading
- Good Reputation
- 0.2% maker/taker fee is higher than Coinbase Pro & Binance
- No copy trading / smart portfolios as on eToro
6. Crypto.com – Crypto Debit Card & App
Crypto.com is a relatively new cryptocurrency exchange and mobile app with a metal VISA prepaid card that users can store Bitcoin on and make everyday purchases with Bitcoin and earn up to 8% cashback.
Users can also earn up to 14.5% interest on their stablecoin crypto holdings – for holding Bitcoin, the Crypto.com interest rate is up to 8.5%.
Currently, USA investors can access the app, VISA card, and wallet but not the website exchange platform, although they may be accepted.
Crypto.com has listed over 250 cryptocurrencies and supports DeFi farming, staking, and Bitcoin loans. It has its own attached non-fungible token marketplace where you can create, showcase, sell, and buy NFTs; some cheap NFTs on the site start from just $10 or, in auctions, from $1.
Founded in 2016, Crypto.com is relatively new to the crypto markets and sponsors the UFC, several sports teams, and F1 and has Matt Damon in its commercials. Its slogan is ‘Fortune favors the brave.’ Over 10 million users are on the platform.
- Up to 8.5% p.a. interest on Bitcoin
- Staking and drawing in other cryptos
- Defi farming
- Bitcoin debit card and wallet
- U.S. investors partially restricted
- High spread fees
7. Uphold – Easy Web & App Trading
Trusted by 7 million users across 184 countries, the Uphold exchange platform, app, and debit card are a fast and convenient way to buy Bitcoin.
Alongside their website, they also have an app on Google Play and the App Store for Android and iOS users.
Uphold charges a spread of 0.85% when buying Bitcoin and 1% when selling.
Some other popular assets you can invest in with Uphold include Apple stock, Amazon, AT&T, Tesla, Gold, Silver, Platinum, Palladium, and more. Their motto is ‘anything to anything’ trading.
They also open investing to anyone through fractional stock trading – you can invest as little as $1 in companies like Google; unlike some online stockbrokers, you must put up a large amount of capital to get started.
- No deposit or withdrawal fees
- The debit card pays 2% cashback for using crypto
- Also, buy and trade stocks, metals, fiat currencies
- Paypal not yet supported
- Fewer crypto assets are funded than larger exchanges
8. Capital.com – Trade Bitcoin CFDs Commission-Free
Specializing in CFDs (contracts-for-differences), Capital.com offers dozens of cryptocurrency pairs that contain Bitcoin. Not only does this include crypto-to-fiat teams but crypto-cross markets too. CFDs allow you to trade the future value of Bitcoin against major currencies like the US dollar, British pound, euro, and Japanese yen. You can even access BTC-fiat markets with emerging currencies like the Hungarian forint, Belarusian ruble, and Thai baht.
Alternatively, if you’ve got some experience in cryptocurrency trading, you might also consider speculating on the exchange rate between Bitcoin and another digital asset. For example, you can trade Bitcoin against Quantum, Cardano, Ethereum, Bitcoin Cash, Bitshares, and more. As noted above, you will be trading Bitcoin CFDs at Capital.com, meaning you do not own the underlying cryptocurrency. This is hugely beneficial for many reasons, as you don’t need to worry about storage, wallets, or private keys.
- Commission-free trading
- Tight spreads
- Leverage offered
- Educational content
- Regulated by the FCA and CySEC
- Access to the best charting and analysis tools
- $20 minimum deposit
- Cannot build custom investment strategies
- CFDs only
9. Binance – Top-Rated Crypto Exchange to Buy Bitcoin
Binance is the largest crypto exchange in the world by daily trading volume. The business is popular worldwide, with over $50 billion daily trading volumes. For users, Binance offers quite a lot. You enjoy great liquidity since assets see significant trading activity, and the business provides access to several cryptocurrencies, including Bitcoin and Ether.
Trading commissions on Binance start from about 0.1 percent, and the platform’s KYC process is quite straightforward. Binance also offers leveraged trading and access to crypto futures, allowing traders to buy cryptos bigger than their wallet balances.
You can also buy Bitcoin with fiat currency on Binance. The cheapest option on the table is to complete a bank transfer, albeit, depending on where you live, this might take a couple of days for the funds to arrive. If you want to benefit from a super-fast deposit, consider using your debit or credit card.
- More than 100 cryptos are available
- Low trading fees
- Numerous trading options
- Supports debit/credit cards and bank transfers
- Great reputation in the cryptocurrency scene
- Ideal for advanced traders twhoseek sophisticated tools and features
- Not great for newbie investors
- Debit/credit card fees are expensive
10. Coinbase – Largest Crypto Exchange in the United States
Coinbase is one of the biggest crypto exchanges available. The exchange offers several benefits, including a clear interface and many customer trading pairs.
Headquartered in Wilmington, Delaware, Coinbase is usually the go-to option for crypto newbies in the United States. Trading is also easy here, with Coinbase’s interface tailored for beginners. If you’re an experienced trader, you can use the Coinbase Pro variant.
Coinbase is also one of the biggest crypto companies. AAsidefrom its exchange service, it provides trading through its Coinbase Pro platform. Users also enjoy a payment platform for businesses, custody services, and its coin – COIN.
- The simple interface accommodates newbies and expert traders
- Coinbase is one of the most liquid exchanges, so your transactions move quickly
- Coinbase offers a lot of altcoin choices
- Low minimum balance
- Complex fee structure
- Trading is more expensive than on other platforms
11. Libertex – Industry-Leader Broker for Stocks and CFDs
Based in Cyprus, Libertex has been available since 1997. The platform is known for its zero-spread pricing structure, which is unique in the CFD trading scene. It offers two web trading platforms for traders. Libertex offers the MT4 and the Libertex Web Trader.
Libertex is a bit limited in its service offering. The trading platform covers about 213 markets. This includes stocks, forex, cryptocurrencies like Bitcoin, and more. You get to trade and purchase over 50 cryptocurrencies on Libertex. Advanced traders will also enjoy access to margin trading with leverage as high as 1:30.
Libertex provides flexibility and a seamless trading interface with a mobile app and desktop trading interface. Available deposit channels include Skrill, Neteller, credit and debit cards, bank transfers, Multibanco, Sofort, Trustly, and more.
- Demo account available
- Flexible payment and withdrawal methods
- Easy technical analysis for research and testing
- Poor education segment
- Charges for some of the withdrawal channels
What is Bitcoin?
For crypto newbies looking to buy Bitcoin online, you must learn what the asset is and how it works.
So, what is Bitcoin?
- The easiest way to describe Bitcoin is that it is a digital currency that allows you to send and receive value digitally.
- As a digital currency, Bitcoin exists in virtual form – unlike traditional money.
- The underlying technology that backs Bitcoin is called the ‘Blockchain’ – which allows transactions to occur decentralized.
- This means that no single party or authority has control over Bitcoin.
When sending Bitcoin to another person, the transaction is completed on a wallet-to-wallet basis. This typically takes 10 minutes to process – irrespective of where the sender and receiver are based.
Bitcoin price chart on eToro
Bitcoin was introduced in 2008 by Satoshi Nakamoto – a pseudonym for someone – or a group of people – who remains unknown today. Nakamoto had published a message on a cryptography-related mailing list titled “Bitcoin P2P e-cash paper.” In the news was a link to a whitepaper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.”
Nakamoto shared the concept of Bitcoin as a digital, decentralized currency system in his papers. As a decentralized asset, no single individual or company would control Bitcoin. Instead, it will run on a public ledger of transactions known as a blockchain. Anyone can store the blockchain on the computer, facilitating sending from one person to another without the need for an intermediary.
In January 2009, Bitcoin’s blockchain launched. The asset’s first block- the genesis block – was mined, and the first Bitcoin transaction took place a week after the block’s mining. At this point, Bitcoin was worthless. Miners who solve complex equations on the Bitcoin blockchain to gain more tokens would trade it for fun.
However, on May 22, 2010, a Florida native negotiated to pay 10,000 BTC for two Papa John’s pizzas. Both pizzas were worth $25 at the time, putting the value of Bitcoin at about 4 BTC for a penny.
In Bitcoin’s early days, transactions took place on internet forums. The asset maintained an arbitrary value, with most people negotiating about Bitcoin.
2011 came, and miners and coders started looking to build their iterations of the Bitcoin network.
Blockchains like Litecoin and Ethereum came to life, attracting more people. With a broader base of applications and more users, Bitcoin’s perceived value started to rise. There was also a surge in the use of Bitcoin as a currency – especially as some companies began using BTC as a payment option. When Bitcoin became available on exchanges, trading and making transactions became much easier. These exchanges allowed Bitcoin to be priced against currencies like the dollar.
Why Buy Bitcoin? Bitcoin Analysis
People buy Bitcoin for many reasons. Some believe it is for the technology. Others believe it for speculative reasons. If you’re still unsure whether Bitcoin is right for your portfolio, below we list some key reasons you might decide to invest today.
Keeping money in the bank isn’t as lucrative these days anymore. When you put your money in the bank, you’d be lucky to earn 1 percent interest. Consider the inflation rate, and you’ll find that this rate is just too low. Most people prevent this wealth erosion with stocks, which have been shown to provide much higher returns.
Bitcoin still has a much higher return rate over time. In its early days, Bitcoin had no value – in fact, the asset was worth just $1 in 2011. But fast forward to 2022, and Bitcoin is now worth well over $30,000. This growth is phenomenal. It’s easy to think that you’ve missed the Bitcoin boom – and, in truth, you might not see these astronomical returns anytime soon. But, when you consider the returns that Bitcoin has delivered and compare it with any other financial asset – or leaving your money in the bank – you will find it too high.
Bitcoin’s Solid Economics
Satoshi Nakamoto understood that Bitcoin would become incredibly valuable once it caught on. So. the creator put a structure in place to preserve its value. Bitcoin currently has a hard cap of 21 million – meaning that no more is available for life once 21 million tokens have been mined.
Anyone with a knowledge of economics knows that scarcity gives an asset the most value. Think of assets like gold and other precious metals. Their lack increases their value because more people want them over time. The same thing happens with Bitcoin. The support can hold and maintain its value thanks to its finite supply. Bitcoin is also not controlled by any government or central authority, so its supply can’t be manipulated.
Invest Small Amounts
There is often a misconception that you need to purchase an entire Bitcoin to enter this marketplace. At $62,000 per coin – this would be out of reach for most. However, as a digital currency, it makes sense that Bitcoin can be fractioned into smaller units. A single Bitcoin can be split into eight decimal points.
You will, however, need to ensure that you are using a cryptocurrency broker that permits small investments. This is why eToro has proven so popular with newbies, as the platform allows you to invest in Bitcoin from just $25 upwards. This will enable you to gain exposure to this volatile asset class with moderate amounts.
When you invest in Bitcoin – you are purchasing an asset class that benefits from significant levels of liquidity. For example, over the past 24 hours, more than $68 billion worth of Bitcoin has changed hands.
This is crucial, as it means that your investment is never locked up. Instead, you can sell your Bitcoin back to cash 24 hours a day, seven days a week.
Ways of Buying Bitcoin
If yyouwant to grow your Bitcoin portfolio, you should know there are different ways to get that done. Some of the most popular payment options available for you include the following:
Buy Bitcoin with Ba ank Transfer
Linking your bank account to a cryptocurrency exchange allows for very easy, convenient, and often instant deposits and withdrawals with lower fees than when using a debit or credit card.
Buy Bitcoin With PayPal
PayPal is the most popular payment processor in the world. The service has hundreds of millions of customers and even started accepting crypto last year. Currently, PayPal customers can buy Bitcoin directly from the service. However, if you want to Buy Bitcoin with PayPal as a payment option on an exchange, we recommend using eToro. The online broker makes it easy to fund your trading account using your PayPal balances.
Buy Bitcoin With a Credit Card
If you plan to buy Bitcoin with a credit card, the first step is to ensure your broker accepts credit card payments. This is crucial because some exchanges refuse credit card payments. This can be due to restrictions on your location or other reasons.
In addition, some credit card issuers might define your Bitcoin purchase as a “cash advance.” This means you must pay a cash-advanced fee to complete the transaction. This fee usually ranges between 3 and 5 percent of the total transaction. You should speak with your credit card issuer if this describes your situation.
Buy Bitcoin With Debit Card
The debit card option is probably the most common method for purchasing Bitcoin. It is easy, quick, and cheap. If you want to buy Bitcoin with a debit card, the most important consideration is the processing fee. Bitcoin exchanges have different payment processors and, as such, charge different prices. Some businesses can set as high as 4 percent on debit card purchases, while others could be lower. For instance, eToro charges just 0.5 percent on debit card purchases.
Buy Bitcoin with eCheck.
Please read our guide on how to buy Bitcoin with eCheck on sites such as Paxful.
Use A Bitcoin ATM
Bitcoin Automated Teller Machines (ATMs) have become quite popular over the past few years. Like their traditional counterparts, specialist cryptocurrency ATMs allow you to make crypto purchases via a machine interface. Data from Coin ATM Radar shows that there are currently 22,130 crypto ATMs worldwide.
Most of these machines support Bitcoin. Regarding Bitcoin ATMs, the primary difference is that the fees tend to be very large. The transaction fees can sometimes be between 10 and 20 percent of the total purchase.
You can follow this process to purchase Bitcoin with a crypto ATM:
- Find the nearest ATM to you
- Enter the amount of Bitcoin for purchase. This is usually expressed in the form of your local currency.
- The ATM will show a preview of the Bitcoin to be purchased for that amount.
- Submit your cash to the Bitcoin ATM
- Input your wallet address or use a QR code to receive the Bitcoins
- Print out your receipt and complete the transaction
The main drawback of Bitcoin ATMs is that the fees are often astronomical. In some locations, this can average 10-20% of the transaction amount.
What to Remember Before Buying Bitcoin
Are you considering buying Bitcoin? Consider a few things as you foray into the crypto market.
1. Bitcoin is Volatile
You probably heard about this one a lot. In truth, Bitcoin is very volatile. Bitcoin’s price can change unexpectedly, which can happen in less than a day. A perfect example of this came in December 2017, when Bitcoin’s price was just a few points off $20,000. The next month, the asset lost 83 percent of its value, trading at around $3,000.
In May 2021, Bitcoin’s price also fell from $64,000 to $30,000, and similarly, between November 2021 and January 2022, it crashed from $69,000 (Bitcoin’s all-time high) to $33,000.
This volatility is common. The forces of demand and supply determine Bitcoin’s price. If more people are buying it, then its value will go up. Bitcoin’s price is also shaped by market news and events. If bad news comes from regulators or the government, it will likely affect Bitcoin’s price over time.
Most people who criticize Bitcoin talk a lot about its volatility. Before you buy Bitcoin online, you want to keep this in mind.
2. Public Transactions
No payment method in the world is as transparent as Bitcoin. Thanks to its blockchain, all Bitcoin transactions are public and traceable. So, whenever you buy and sell Bitcoin, the information immediately goes into the blockchain, and everyone can see it.
3. Addresses are Anonymous
While transactions are available for everyone to see, it’s difficult to identify who owns what. Bitcoin transactions are executed using wallet addresses–numbers and letters. Anyone snooping around needs your wallet address to check your transaction history and account balance.
Choosing the Right Bitcoin Broker
If you would like to buy Bitcoin online, choosing the right broker or exchange is crucial. But this is easier said than done. With so many options available, it might be more difficult to determine. We’ve highlighted some details you should consider before choosing one:
It is recommended that you choose a broker with reasonable fees. When trading Bitcoin, the costs can add up pretty fast. Depending on the option you settle for, you might have to pay for deposits, trading, withdrawal, and sometimes, for converting your Bitcoin to another coin. Fixing for an online broker with affordable fees can save you hundreds of dollars in fees.
Most people store their Bitcoin on the platform where it’s purchased. This isn’t the safest option, but you can reduce the likelihood of theft by ensuring you only deal with media with strong security protocols.
If you have problems, you should be able to reach out to the exchange and get a response as quickly as possible. No one anticipates that any issues will arise, but a strong customer support service will come in handy now and then.
4. Payment Methods
How can you deposit funds and request a withdrawal? What are the channels available? The best platforms usually support bank transfers and debit cards. You can also look out for payment processors like Square and PayPal.
5. Volume and Liquidity
A broker service must have the right volume and liquidity levels. You want to ensure that the service gets the right transaction volumes and that you can withdraw your funds whenever you like.
The Bitcoin price has seen its fair share of crests and troughs in the past. The biggest bullish movement came for this crypto in late 2021, pushing its price to its highest level, $68.2k. However, the story couldn’t be maintained as 2022 brought three major events that created a bearish scenario for this crypto.
- Halving – Halving is a way to limit the amount of Bitcoin people can mint. With the arrival of Halving, people could only mind half the amount of BTC tokens they could while using the same processing power.
- LUNA Crash – May 2022 LUNA’s crash upended people’s belief in the asset and pushed the price of Bitcoin close to $30k. LUNA crash led much of people’s faith in crypto to be vaporized, encouraging aggressive sell-offs by institutions and individuals alike.
- FTX – Crash – The third and the biggest negative event to happen to the crypto market was the FTX Crash. SBF, long thought to be the messiah of the cryptocurrency market due to his “effective altruism,” turned out to be just another scammer that evaporated $8 billion to disappear from the cryptocurrency market.
Bitcoin’s price suffered during these major bearish events. Factors like environmental concerns and Ethereum’s shift to proof-of-stake also played a role in keeping the value of BTC low. By the end of 2022, Bitcoin was trading at just above $15k.
But since Bitcoin is a speculative asset, bulls came in full force to support Bitcoin and pumped its value beyond its $20k support. Mid and late January 2023 saw Bitcoin forming a bullish engulfing pattern, and Bitcoin blew past its $23k resistance. While the value of BTC has dropped below that level, $20k support, at least for now, is still holding strong.
Bitcoin Price Prediction
Technical indicators are the only way that we could base our prediction. But the price charts have started to move erratically because of the mid-terms, two crypto crashes, and increased emphasis on utility-focused cryptocurrencies. Bitcoin, being little more than a tradable asset, sseemsto be losing value in the eyes of individual investors. But institutional investors are still banking on it.
After the initial uptick received due to the crypto investors waiting for the Fed Announcement to slow the pace of increasing the interest rate, Bitcoin’s initial bullish surge has dampened. No word from regulations has caused a minor surge in sell-offs, and the support of $23k has been lost.
Not meeting expectations are not the only behind the recent stoppage of the bull run. Factors like the US Dollar’s bullishness and countries like Sri Lanka rejecting the tokens also have a fair share of the blame.
The US jobs opportunity report also showed the arrival of new opportunities, which likely caused the Fed to keep increasing the interest. While it is not a fact set in stone, the resultant certainty was more than enough for people to drop the crypto price.
From the technical perspective, Bitcoin is still moving above its 200-day moving average, thanks to the massive green candles that formed earlier this year.
Weekly charts show that the green candles still weigh more than the red ones. Activity is ongoing, but the bulls have started struggling after failing to break through the $24k resistance.
That said, factors such as the arrival of more progressive regulations regarding crypto may push Bitcoin’s value even further. And while South East Asian countries have discussed Bitcoin, other continents continue to have faith. With that in mind, Bitcoin may likely see a major bullish momentum by the middle of 2023.
AAsmore people adopt Bitcoin as a tender the next year, Bitcoin may exceed the prophesized $100k price mark in 2025 and beyond.
Also, see our updated guide: Is it too late to buy Bitcoin?
Investing in Bitcoin vs. Trading Bitcoin
Investors have different strategies that determine their actions in the crypto market. Some prefer to buy Bitcoin for the long term. Others want to trade BTC. When should you pick one over the other? We examine the difference between investing and trading in Bitcoin.
Investing in Bitcoin
Investing is the path chosen by most crypto holders – especially the newbies. The strategy is simple – purchase Bitcoin from a broker, keep the asset in a wallet, and wait for the price to rise. Once it gets to a level you’re comfortable with, you sell. Most crypto investors look to put their money into the asset and leave it for the long run – at least a year. The strategy makes sense – long-term holding has proven very profitable if you consider how Bitcoin started in 2009 and where it is today.
Investing is also convenient for many people who don’t want to endure the stress of monitoring prices daily. They keep their coins in a secure wallet and “forget about it.” Daily market swings don’t exactly concern them since they’re in it for the long haul.
Trading is the other side of the coin. It involves entering positions with the asset and cashing out based on price swings.
Bitcoin trading aims to make money when the price swings in your favor. So, you could enter today and buy 1 BTC at the price of $30,000. If its value increases to $32,000 hours after and you sell off, you’ve gained $2,000. If Bitcoin’s value drops below $30,000 again – remember that the asset is volatile – you could enter a position and hope for another price gain.
Regarding trading, you make decisions based on your asset price analysis. So, you could open a long position on the purchase today and short it tomorrow. Trading usually occurs over a few days or weeks. However, there are also swing traders and day traders who hold positions for much faster time frames.
You could also engage in leverage trading – trading with more money than you have. Exchanges and brokers usually provide leverage to their professional customers, allowing them to maximize their chances of making a profit.
So, Which is Better?
Like most things crypto-related, it’s never clear-cut. People have different reasons for holding cryptocurrencies; there’s no one-size-fits-all answer. To help you make a decision, here are some factors to consider:
1. Time Frame
How long do you plan to hold your crypto? If you’ve got the long game in mind, you could invest and ddon’tbother yourself about price swings. Cryptocurrencies – especially Bitcoin – have provided steadily increasing returns to investors for the past few years. So, you can rest assured that your money is safe.
2. Reason for Holding Bitcoin
Like it or not, some people see crypto as a “get rich quick” scheme. They hear of assets jumping by over 100 percent in less than a month and want to try such. It’s understandable – every asset class in the world has such people.
You might be better off trading if you’re such a person. Watch for price swings and jump on the train till it flatlines. You might get lucky to witness such bullish momentum.
3. Consistent Effort
Effective trading requires a lot of research and attention to price charts. It’s easy to jump from one hot cryptocurrency to the other, but the truth is that these types of holders eventually pick losers and see their wealth erode.
While no one is discouraging you from choosing hot assets and maximizing your gains, you must ensure that your decisions are based on facts and research. Also, always keep an eye on price charts and make sure not to get swept during a market downturn.
If you’re too busy and have no time to research and check prices, you might be better off investing in Bitcoin. Just leave your coins in a wallet and let the forces of demand and supply decide your fate.
Buying Bitcoin as a CFD Product
Like many other financial assets, Bitcoin is also available as a contract for difference (CFD). A CFD is simply an agreement between a buyer and a seller showing that the buyer must pay the seller the difference between the current value of an asset and its value when the contract expires. The value of a CFD doesn’t consider the asset’s underlying value – simply the difference between the entry and exit prices.
Buying a CFD allows you to profit off Bitcoin’s price movement without owning the asset. Several CFD brokers will enable you to make a trade, although eToro is the best. It is regulated and has a healthy selection of help to choose from if you want to purchase a CFD.
Taxation on Bitcoin Earnings
There have been several attempts to impose taxes on crypto earnings, but the U.S. Internal Revenue Service (IRS) has yet to develop a stable regulatory regime. The IRS defined cryptocurrency as “property” in 2014, meaning it qualifies for capital gains tax treatments.
However, there are also some instances where crypto activity is treated as income – and, as such, is subject to income taxes.
Taxable events that qualify for capital gains tax in the United States include:
- Selling your crypto for fiat currency
- Purchasing goods and services using crypto
- Trading one cryptocurrency for another – via an exchange or through peer-to-peer channels
Events that qualify for income tax are:
- Receiving crypto from an airdrop
- Interest earnings through lending on decentralized finance (DeFi) platforms
- Block rewards got from crypto mining
- Crypto accepted as payment for work
- Cryptocurrencies earned through staking and liquidity pools
Note that you can use losses gained from trading to offset some of your capital gains. You can also deduct up to $3,000 from your income tax, depending on how long you’ve held the assets.
Calculating Your Capital Gains Tax
In the United States, your capital gains tax for crypto activities will depend on how long you’ve held your assets and your income tax brackets. This classification will help you determine the following:
Short-term Capital Gains
If you made gains or losses from crypto held less than a year ago, your capital gains tax is treated at the same rate as your tax bracket. This list provides information on tax brackets for 2022. Note that you can use losses to offset taxable income by up to $3,000. You can also carry losses forward into the next year.
Long-term Capital Gains
If you hold crypto for more than a year, gains or losses from activities will incur 0%, 15%, or 20% in taxes based on your income.
You can find a classification of income in this list.
The Importance of Responsible Bitcoin Investment
From its humble beginnings in 2009 till date, Bitcoin has delivered over 48,22,525%. BTC has also produced an average annualized return of 230%–ten times more than the second-ranked asset class (Nasdaq 100 index). Little wonder why everyone wants to jump into Bitcoin and become rich overnight. However, investing in Bitcoin comes with risk. You must take precautions when investing in Bitcoin. To ensure that you’re doing the right thing, keep the following in mind:
1. Consistent Research
This point can’t possibly be stressed enough. When investing in Bitcoin. Remember to do as much research as you possibly can.
You can get signals from some dedicated social media channels, read the news, and listen to experts having analyses for Bitcoin. You can also get expert studies from review sites such as ours. Inside Bitcoins has experts who regularly analyze Bitcoin and other altcoins.
2. Hedge your Bets.
It’s important to have a limit when investing. If Bitcoin’s price drops by a certain percentage, cut your losses and take your money out. You’ll lose money, but you’d at least be wiser. Many people make the mistake of keeping their cash and waiting out the storm. However, this should only be done with the money you can lose.
Would You Try Bitcoin Mining?
Many people who want to earn Bitcoin tend to buy or trade it. However, there’s a third option – mining. Bitcoin mining is a process where you perform complex mathematical functions and verify transactions on the blockchain. You validate and confirm transactions, and add them to the Bitcoin blockchain, thus contributing your part to the Bitcoin ecosystem.
Transactions that are verified on Bitcoin’s blockchain are grouped into blocks. When a block is confirmed, the trades are added to the blockchain, and the miners get Bitcoins as a reward. While mining seems easy, it’s quite the opposite. The Bitcoin blockchain is so congested that miners now must use specialized tools. In Bitcoin’s early days, mining was possible with your personal computer.
Now, the competition in the blockchain has made PC mining essentially obsolete. You must use an Application-Specific Integrated Circuit (ASIC) to make money through mining. Sadly, ASICs are quite expensive. Some ASICs could cost as much as $5,000. You will also need to consider electricity costs as mining is a highly energy-dependent endeavor – except you live where renewable energy is abundant if there are government subsidies on electricity.
Even with all this, you might not make any money from mining. Blocks are mined on a first-come-first-serve basis, so it will likely take a while before you can earn. All in all, much work will have to go into mining before you can make enough money to justify your costs. If you want to earn Bitcoin, you’re better off just trading – it is less expensive, and you can start with as much money as you have.
Minimizing Your Risk With Crypto Investment
Two of the most important points we’ve raised are these:
- Bitcoin is very profitable
- Bitcoin is very risky
When you put money into Bitcoin, you must find a way to minimize your risk as much as possible. To wit, consider the following tips to reduce your chances of Bitcoin investing:
1. Do Your Research
A famous acronym in crypto lingo is Do Your Research (DYOR). Before investing, always do the work and be as confident as possible in your position.
Learn as much as possible and get your information from trusted sources. Remember that review sites can show some of the best analyses and get good news from experts online and via social media.
2. Beware of Fraudulent Schemes
Crypto is largely unregulated, which means that many individuals and companies are on the prowl looking for who to swindle. Before committing funds to a platform, know its security levels. This is another benefit you can get from review sites.
We will also recommend that you only do business with regulated brokers. Services like eToro are held across different countries and have a track record of success. So, you can be much more confident with them.
3. Only Invest Funds You Can Lose
Every investment carries a risk – especially Bitcoin. To be on the safe side, it is recommended that you invest only funds that you can lose.
Don’t lie to yourself or take a loan because you want to make a Bitcoin investment. Only invest when you have enough capital, and you should be ready to lose that capital if things go wrong.
One of the best things about Bitcoin is that you can start investing and trading with as little money as you have – especially if you’re a newbie. Grow from there, both financially and in your trading skills. Soon enough, you’ll be raking in the big bucks.
4. Track Your Results
Whether you’reinvesting or trading, you need to know how your portfolio is holding up. This is especially true if you’re a trader. You must understand the market’s outlook and how it could affect your position.
Bitcoin’s volatile nature makes it difficult to track its price. However, several apps make it easy to keep an eye on the asset and monitor your portfolio’s performance. Once you make a habit of checking your account, you reduce the risk of suffering big losses.
5. Resist FOMO
It can be challenging to handle the pressure of crypto trading – especially if you’re new. But, never enter a position or invest just because others are doing the same thing. That’s the Fear of Missing Out (FOMO).
Remember to take your time and do your research. If people are FOMO-ing into a trade, the worst that can happen is that they miss out on an earning opportunity. Your money will at least be safe. Don’t invest utemptation’s confidence don’trepared, no matyou’ree temptation’s strength.
Best Bitcoin Wallet
As we have explained through this guide, if you want to invest in Bitcoin, you must think about where you will store your digital funds.
There are hundreds of Bitcoin wallets in the markets, some of which can be accessed via a mobile app or desktop software. It’s even possible to store your BitcIt’son on a hardware device. Nevertheless, we discuss the best Bitcoin wallets in the market now.
eToro Bitcoin Wallet
The eToro Bitcoin wallet comes with a plethora of handy tools and features – all of which are suitable for inexperienced traders. Not only does the wallet allow you to store your Bitcoin safely – but 120 other digital currencies. This is super-useful if you are invested in a full range of crypto assets and want to store all your coins in a single wallet.
The eToro wallet can be downloaded free of charge to your iOS or Android device. Once you set up the wallet, you can buy and sell cryptocurrencies without leaving the app. You can also exchange one cryptocurrency for another – with eToro supporting more than 500 pairs.
When we explored security features, we found that the eToro Bitcoin wallet is authorized and regulated by the Guernsey Financial Services Commission (GFSC). You will also benefit from a password recovery service that allows you to regain access to your wallet if you misplace your private keys.
If you want to read and share Bitcoin-related news developments with like-minded investors – it’s worth considering Reddit. The Onit forum is home to a huge Bitcoin community with over 2.9 million subscribers.
You will find interesting posts and viewpoints from the Bitcoin Reddit group around the clock. Although you can view posts as a non-member, it’s best to quickly open an account it’s Reddit to post and reply to comments.
Bitcoin Against Other Top Cryptocurrencies
Bitcoin isn’t the only cryptocurrency available. Here’s how it compares against some oHere’sptions:
Bitcoin vs. Dogecoin
Dogecoin was one of the best-performing cryptocurrencies of 2021. The meme coin was created in 2014 as a parody of cryptocurrencies, but it somehow caught on and is now the world’s sixth most valuable digital aworld’sogecoin’s value comes in large part from Dogecoin’sommunity. Celebrity endorsements have also helped the purchase, with Snoop Dogg, Jason Derulo, and Elon Musk regularly promoting it on social media.
Bitcoin vs. Ethereum
Ethereum is the second most valuable cryptocurrency. It also presents a unique investment opportunity, especially with its value rising significantly in recent years.
Most of Ethereum’s value comes from its use of Ethereum’s Ethereum blockchain – for paying transaction fees, etc. However, its status as Bitcoin’s biggest competitor means Bitcoin’szable community and significant functionality benefits.
Bitcoin vs. Litecoin
Litecoin and Bitcoin are quite popular. The former launched as a “lite version of Bitcoin,” with its creators”s touting it for its tra”section speed and ability to produce more coins per time.
As of 2023, Litecoin is currently the 20th highest market capitalization cryptocurrency. It is a popular option for some investors seen as a ‘blue chip’ crypto and is available on all the top ‘exchanges and brokerage platforms.
Bitcoin vs. Libra
Libra was a planned crypto project from the Facebook-backed Libra Association. When it was announced, the Libra Association explained that the asset’s value would be backed by a basket of assets of the world’s most popular fiat currencies. Seveworld’s sulatory pushbacks since then have delayed the launch, and Libra has gone through a rebranding in terms of name and structure. It’s now called “Diem,” the organization wants to roll”out D”em as a stablecoin in 2021. As of 2023, it is yet to be released.
Where Does Bitcoin Go From Here?
Bitcoin corrected in Q1 2022 – With the current market situation, you could be skeptical about investing in Bitcoin. Its price and that of every major cryptocurrency crashed far below 2022 open in mid-January 2023.
However, this doesn’t necessarily mean Bitcoin is dead. It has repeatedly shown that it can always come back, so investors continue to have that confidence – especially those who invested for the long term. Bitcoin’s price might take a while to bounce, but it eventually happens. It’s only a measure of how long you can waIt’sMany believed Bitcoin was dead when its price crashed from almost $20,000 to $3,000 in 2018. But it came back.
The fact that Bitcoin is still severely affected by news and current events shows it is still in its earliest days. Many proponents have also pointed out that Bitcoin hasn’t been accepted by most governments yet. When it does, a framework will govern the crypto market, and Bitcoin will finally become a legitimate asset.
At the time of writing, Bitcoin looks to be attempting to put in a higher low and break out of its bearish market structure – the Bitcoin price has now recovered and is not far off its 2022 open.
The Bitcoin price opened in April 2023 at $28,465, based on the Binance BTC / USDT monthly chart. 2023 has seen a strong recovery for the Bitcoin price compared to the 2022 bear market.
Bitcoin hit its 2022 yearly lows after the insolvency of the FTX exchange in November 2022, crashing as low as $15,476.
The Bitcoin 2022 yearly open was $46,217, and the 2021 annual available was $28,924. So the return on investment (ROI) of holding BTC in 2021 was over 50%, but 2022 holders lost 65%.
Currently, 2023 holders are up 70%, as Bitcoin opened in 2023 at $16,541.
Many investors are confident the next crypto bull run could be underway and pick up more steam in the March 2024 Bitcoin halving run-up.
eToro – Best Place to Buy Bitcoin
Bitcoin has again shown the global investment world that it is here to stay in the long run. With the digital currency increasing in value by over 1,000% in the past 12 months alone – it’s clear why so many people are now looking to buy Bitcoin and hold for future gains. Read thirty quotes from rich Bitcoin investors here – including Elon Musk, Mark Cuban, and George Soros.
If you are ready to take the cryptocurrency plunge and wish to buy Bitcoin right now – you can get started at our recommended broker eToro.com in under five minutes.
It would be best if you also remembered the following:
- Do your research before investing in and trading Bitcoin
- When trading or investing, do so with only registered brokers and exchanges
- You should also check out review sites and online experts to get their opinions about Bitcoin
- Resist FOMO. Only invest what you can afford to lose.