Bitcoin is a popular type of digital currency which only exists virtually. This technology was first introduced in 2009 and then in 2017, it has experienced a rapid rise. Coins are minted or created when computers legitimize transactions in the currency and organize the currency process. It uses a decentralized network of computers to monitor everything called blockchain which tracks transactions in the currency. It includes the vast public record of each transaction that has taken place in the currency and network manages the ownership of Bitcoins and also currencies integrity. If you are a US resident and you want to bitcoin right now, then take a look here-
5 Ways To Buy BitCoin in United States (US)
Nowadays, there are various options to buy Bitcoins. You are not even required to open any different or specialized account to buy Bitcoins as there are several brokers who offer different ways to buy them.
Here are 5 easy ways to buy Bitcoins each of which offers different combinations of security, cost and potential upside/downside –
- PayPal – It becomes super easy to buy and sell Bitcoins using PayPal. You can trade as small amount as $1 at a time. For trades involving less than $25, you have to pay $0.50, with trades more than $25 there is sliding commission scale that starts at 2.30% and trades over $1,000 charges commission at 1.5%. You don’t have to pay fees for holding Bitcoins in your account. With PayPal, you can also trade Litecoin, Ethereum and Bitcoin Cash.
- Trading App – By using a trading app like Robinhood or Webull, you can pick up few Bitcoins with no direct commission. Robinhood is a very easy to use platform where you can buy Bitcoins directly, other digital currencies, stocks and ETFs. With Webull, you can trade few cryptocurrencies including Bitcoin, but you have to pay 1% on each transaction.
- Coinbase – Coinbase is a cryptocurrency exchange platform through which you can directly own the digital currencies. You can trade popular cryptos like Ethereum, Litecoin, Bitcoin and Bitcoin cash. It allows you to store coins in the vault with time-delayed withdrawals for more security. It has a confusing fees structure like they charge a fee of 0.5%, and also adds additional transaction fees which depends on size of transaction and funding source. This fee also adds another 1.49% or so to your costs but even much more when you use a debit card.
- Bitcoin ATM – With Bitcoin ATM, you can also buy Bitcoins directly but you have to pay much more commissions. You can buy and sell Bitcoins using cash or debit card. You require Bitcoin wallet to process the transaction. Commission ranges from 7% per transaction to 10%.
- Interactive Brokers – With Interactive Brokers, you can not buy Bitcoins directly but you can buy futures contracts. The broker cost you $15.01 per contract, through which you have exposure to 5 Bitcoins.
Things to Do Before Buying Bitcoins
You should evaluate a few factors which play a great role in influencing our choice in buying Bitcoin. Here’s what you have to consider before buying Bitcoins –
- Cost – Commission greatly depends on how you buy Bitcoins. With future contracts, you can get bigger piece of the action significantly economical, but few brokers can charge you some percent to buy directly. A little percent does not sound much, but if trading in and out, this will instantly decrease your profit.
- Security – Security is one of the most important concern with any investment. Some new players of cryptocurrency have serious problem with security. Example – In 2022, a high-profile cryptocurrency exchange, Binance, was hacked for thousands of Bitcoins. Traditional brokers may provide better security as they are experienced with this issue.
- Ownership – Ownership relates to what you wish to own exactly. You can either own Bitcoin directly or a future contract, which provide returns on the currency movement.
- Upside/downside – Your potential gain is directly related to ownership like owning the currency directly or having future contracts. Your profit increases by a dollar with every dollar increase in the currency when you own a Bitcoin directly. But with future contracts, you might gain instantly, without having to front as more capital. By owning directly, your downside is much more limited but there are chances to lose more with futures.
Although Bitcoin has grown quickly it includes risk which is not appropriate for everyone. If you cannot afford to lose money or you look for conservative investments then you should either avoid Bitcoin or trade only with that amount that you can afford to lose.