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Bitcoin is a type of virtual currency that you can use for digital purchases or trade like stocks or bonds. To buy and sell cryptocurrency, including Bitcoin, you need to use a bitcoin exchange.
A bitcoin exchange will allow you to buy Bitcoin in exchange for other assets, including traditional currency or other digital currencies. The best cryptocurrency exchanges are secure, cost-effective, quick to set up, easy to use, and accept a variety of funding sources. Here are our picks for the best places to buy bitcoin.
Best Places to Buy Bitcoin in 2022
Unlike traditional brokerage firms, cryptocurrency exchanges are not members of the Securities Investor Protection Corp. (SIPC). Therefore, unless user terms specify otherwise, investors with cryptocurrency assets commingled on a custodial cryptocurrency exchange could potentially lose their funds as unsecured creditors.
Investing in cryptocurrencies, Decentralized Finance (DeFi), and other Initial Coin Offerings (ICOs) is highly risky and speculative, and the markets can be extremely volatile. Consult with a qualified professional before making any financial decisions. This article is not a recommendation by The Balance or the writer to invest in cryptocurrencies nor can the accuracy or timeliness of the information be guaranteed.
Best for Beginners : eToro
- Currencies: 75+
- Transaction Fees: 1% for buying or selling crypto in addition to the spread price
- Wallet Included: Yes
eToro is currently offering a $10 bonus for customers that purchase $100 worth of cryptocurrency through their platform. This promotion is in select U.S. states.
This review promotes virtual cryptocurrency investing within the European Union (by eToro Europe Ltd.), United Kingdom (eToro UK Ltd.), and the United States. (by eToro USA LLC). Virtual cryptocurrency investing is highly volatile and unregulated in some European countries and the UK. There are no consumer protections in Europe or the UK, and trading activities in the virtual crypto trading sector are not regulated by any European or UK governing body. Investments are subject to market risk, including the loss of principal.
eToro is our choice for beginners thanks to an easy-to-use platform and practice accounts that let you test out buying bitcoin without risking real funds.
Free practice accounts with virtual money
Copy-trading system to learn the ropes
Pricing involves a flat fee as well as a spread
If you’re looking for a simple and focused platform that allows you to buy bitcoin while learning more about the cryptocurrency ecosystem, eToro could be right for you. Those new to bitcoin will appreciate the simple and straightforward platform and CopyTrader system that allows you to mimic trades from others on the platform.
When you sign up, you can test the waters with a $100,000 virtual account with no risk to your actual money. Once you're comfortable, you can enter a live trade with real dollars. Just take note of the 1% fee per buy or sell transaction and a separate spread for each cryptocurrency.
Best Instant : CoinMama
- Currencies: 16
- Transaction Fees: Up to 3.90% commission fee plus a spread added to the market price
- Wallet Included: No
We picked Coinmama because it offers instant bitcoin purchases with many payment options and high limits.
Instant order delivery
Transfer to any crypto wallet
Numerous funding options
Slightly complex and often pricey fee structure
No ACH bank transfer support
If you want to own bitcoin as quickly as possible and already have a bitcoin wallet, Coinmama may be your best choice. Coinmama features fast account setup and verification. Once you’re logged in, you can buy bitcoin instantly using several payment methods, though there may be a fairly high price tag for those instant purchase privileges.
You can use a credit or debit card to buy one of 16 different currencies. Americans can also pay with wire transfer or SWIFT, but not ACH. When you place an order, the funds are instantly verified with your connected card by Coinmama, then the cryptocurrency you chose is deposited into your crypto wallet. Those in the UK and EU have additional instant funding options not available in the US.
Hopefully, they’ll add US-based ACH payments as a funding method, though electronic transfers in the U.S. wouldn’t allow for instant purchases with this funding method. But if you have a credit or debit card and don’t mind the fees, Coinmama allows you to instantly buy coins with any bitcoin wallet.
Best for Privacy : Bisq
We like Bisq’s decentralized features that improve privacy and anonymity when buying and selling bitcoin through an open-source desktop app.
Decentralized network improves privacy
Software is open source
No registration required
No identity verification required
Potential for slow transactions
Not ideal for active traders
For those drawn to the anonymity provided by bitcoin, Bisq may offer what you’re looking for. Bisq is a decentralized exchange that doesn’t require any signup or account. That means you can use Bisq to buy and sell with nearly complete privacy. The required Bisq desktop app is open source and free to use.
Bisq supports a wide range of payment methods, including bank transfers, Popmoney, Zelle, and Western Union. On Bisq one side of every transaction must be in Bitcoin. For these Bitcoin based transactions, the maker fee is 0.12% and the taker fee 0.88%.
Bisq is best for those with at least a little crypto experience.
The right cryptocurrency exchange for you will strike an ideal balance between fees, security, and trading options. That’s why it’s important to determine what you want out of an exchange before you dive in. But if you aren’t sure exactly what you want, eToro is our choice for the best place for beginners to start. In addition, CoinMama is our pick for the best place for instant purchases of bitcoin, while Bisq offers the most privacy.
Compare the Best Places to Buy Bitcoin
|Company||Currencies||Fees||Security||Transactions||Max Trading Amount (in USD)|
|eToro Best for Beginners||75+||1% for buying or selling crypto in addition to the spread price||Two-factor authentication||Buy, Sell, Transfer||Customized trading limit. $40,000 per debit card transaction|
|Coinmama Best Instant||16||Up to 3.90% commission fee plus Coinmama's spread added to market price||Two-factor authentication||Buy, Sell, Transfer||Max order and deposit limit of $15,000|
|Bisq Best for Privacy||Dozens||0.12% for maker and 0.88% for taker||Multi-signature address||Buy, Sell, Transfer||No trading limits|
What Is a Bitcoin Exchange?
A bitcoin exchange is a digital marketplace where you can convert currency like U.S. dollars into bitcoin. Many exchanges that support bitcoin also support other cryptocurrencies.
Every bitcoin exchange uses its own pricing and platform, which may instantly draw you to one exchange over another. Advanced bitcoin users may be interested in more details about the type of exchange. For example, some exchanges use centralized systems and user accounts, while others are decentralized with a focus on privacy. Depending on what you’re trying to accomplish, you may prefer one type of exchange over another.
How Does a Bitcoin Exchange Work?
In some cases, bitcoin exchanges connect buyers and sellers and act as a middleman or a broker. When you buy bitcoin using a bitcoin wallet, the transaction is recorded on the Bitcoin Blockchain, which publicly tracks bitcoin-based transactions. In some cases, exchanges may transact on your behalf and not deliver bitcoin to an external digital wallet.
Are Bitcoin Exchanges Legal?
Bitcoin exchanges are generally considered legal in the United States. However, it is your responsibility to report capital gains to stay on the right side of the law for your annual tax filing.
What Are Some Differences Between Bitcoin Exchanges and Wallets?
Bitcoin exchanges are a place you can buy and sell bitcoin. In many cases, the exchange also includes a wallet, which is the account that holds your cryptocurrency. When you use a centralized exchange online or through a mobile app, the exchange effectively will hold the bitcoin on your behalf.
Bitcoin also enables you to use external wallets outside of an exchange. These include computer-based and web-based “hot wallets” and offline “cold wallets” that work kind of like a USB security fob. If you buy bitcoin at most exchanges, you have the option to transfer your coins to any bitcoin wallet.
What Are Some Differences Between Bitcoin Exchanges and Mining Software?
Bitcoin mining software helps maintain the Bitcoin Blockchain. Every transaction on the blockchain is public and recorded on countless computers around the world. When a transaction takes place, computers called miners race to record the transaction and get a small fee, which is paid by those who make the transaction.
When you run a bitcoin miner, you can effectively create your own bitcoin if you win the race and get paid the transaction fee. To improve your chances, you can join a pool with other miners. However, be aware that mining is power-intensive and could cost you more than it makes you. Bitcoin mining is best for those who are computer savvy.
Is Buying Bitcoin Safe?
Buying Bitcoin is safe whenever you use a vetted and respected platform. It’s important to research any platform where you’re considering purchasing Bitcoin before you decide to take the plunge. In terms of Bitcoin being a safe investment, the value fluctuates more frequently than many other traditional investments, meaning it's usually considered to be more risky, often much more risky. If you’re looking to support a decentralized method of making payments, Bitcoin can be valuable. However, there’s no guarantee or insurance protecting the value of what you're purchasing.
How Can I Buy Bitcoin?
If you’re looking to buy bitcoin, follow these steps to get started:
- Pick an exchange and wallet provider: The first step is to pick a place to buy and store your bitcoin. The easiest and fastest way to start is to choose an exchange that also offers secure bitcoin storage.
- Open an account: Once you’ve picked your favorite exchange, you most likely will need to open an account and supply basic personal information. Some decentralized exchanges don’t require an account, but you’ll need an existing wallet and more technical know-how to use this type of exchange.
- Fund your account: If you choose a provider that allows you to deposit fiat currency (dollars, euros, pounds, etc.), you’ll probably have to fund your account before you can make an order. You may be able to buy right away with a debit or credit card, but beware of extra fees.
- Place an order: Now it’s time for the big moment. Place your order and wait for it to fully execute. Because blockchain processing takes some time, your purchase may not be instant. There are many factors that can lead this to take anywhere from a few minutes to longer than an hour to complete.
Once your order is done, you should see your new bitcoin in your bitcoin wallet or account. Congratulations! You're a cryptocurrency owner.
We looked at more than a dozen of the best places to buy and sell Bitcoin online and settled on the top six places based on a number of factors. These factors included the history of the exchange, customer reviews, the fees each charge, the strength of features for each digital wallet, and the speed at which you can buy Bitcoin.