The United States is the number one Bitcoin (BTC) market in the world in terms of trading volume. This shows the appetite of Americans towards cryptocurrencies. Bitcoin’s performance in recent years has convinced millions of people to join the market.
Given the wealth of choices for platforms that allow you to buy Bitcoin, some people might find it hard to select a suitable option. We have put together a guide that will make it easy even for newbie traders and investors to buy Bitcoin in USA. It will discuss various platforms and options for purchasing BTC.
Quick Guide to Buy Bitcoin in USA Today
Start by selecting one of the recommended crypto exchanges and brokerage platforms and open an account with them. This requires using your email address or phone number. The account opening process is followed by verification as part of the Know Your Customer (KYC) process. This stage is essential for regulated exchanges and brokers as it helps them provide you with adequate security.
Fund your account
The next stage is to fund the cryptocurrency exchange or brokerage account you just opened. You can deposit the funds using any of the available payment options. Ensure you research a platform and are happy with the payment methods they support before you open an account with them. The deposited funds are what you will use to buy Bitcoin on the trading platforms.
The last stage is to buy Bitcoin once the funds arrive in your exchange or brokerage account. Since most platforms support the BTC/USD trading pair, you can buy bitcoins directly using the deposited US Dollar with ease. This trading pair is available on virtually all platforms. Complete the transaction after you input the amount of BTC you wish to buy or the equivalent USD amount.
Where to Buy Bitcoin in USA in 2021?
Buying Bitcoin in the United States gives you two major options you can explore; crypto exchanges and brokerage platforms. American traders have access to a wide array of exchange and brokerage platforms.
However, the two sets of platforms are different in how they operate and grant access to Bitcoin. Buying bitcoins from cryptocurrency exchange is advisable for long-term investors or Hodlers since it gives them the option to move the coins to external wallets and store them for months or years.
Cryptocurrency brokers don’t work that way. They grant investors exposure to Bitcoin as a speculative asset. This means that they allow investors to speculate on Bitcoin’s price using trading vehicles like contract for differences (CFDs), futures and options. As such, investors make money from Bitcoin’s price movement without holding the actual coins in their wallets.
With the wide array of trading platforms available to US traders, it becomes tough for them to choose the best platform to buy Bitcoin. We have conducted in-depth research into various US platforms and have selected the best exchanges and brokers that support the buying and selling of BTC in the United States.
Step by Step Guide - How to Buy Bitcoin in USA
If you are an amateur cryptocurrency investor, it can be tough buying bitcoins. The technical aspect of buying bitcoins might be overwhelming for some people. To make it easier, we present these five simple steps of buying bitcoins from exchanges and brokers.
Step 1: Find an Appropriate Platform to Buy Bitcoin
As the number one cryptocurrency, Bitcoin is available on virtually all exchanges and brokerage platforms. You don’t need to stress to find a platform that supports Bitcoin and its trading pairs. Your work will be to find out more about the broker or exchange to see if their services are what you need.
If you wish to play the long game and hold Bitcoin for months or years, then your best bet would be to buy bitcoins from exchanges. You can also move the purchased tokens to external wallets to ensure maximum security.
On the other hand, traders are only interested in making money from the price performance of the cryptocurrency. If you are a trader in this category, then you should look to brokers if you wish to trade bitcoin derivatives.
Regardless of your choice amongst the two sets, we always recommend choosing a broker or an exchange that is regulated. This is because they offer tighter security, and customer funds are usually insured.
Step 2: Registration / Create a New Account
The second step after finding the right platform is to open a trading account. You can use an email address, a phone number, or your social media account to open an account on the selected platform of your choice.
The account activation process doesn’t take more than a few minutes. Afterwards, you will be required to complete the KYC process before they sell the BTC coins to you. The platforms we recommend are all regulated entities, which means that they need to verify your account to provide you with better security and a safer trading environment. The required documents include necessary copies of your ID (like passport, driver’s license or more) and proof of address (documents like utility bills and bank statements). A selfie might be needed, depending on the choice of the platform.
Account verification is an important step in opening an account with a broker as it ensures the safety of your trading funds and other personal details. Ensure you only trade with platforms with adequate KYC and AML policies in place.
Step 3: Deposit Funds
With your trading account now verified, you can be allowed to deposit funds into the accounts and use them to buy or trade cryptocurrencies. Usually, these exchanges and brokers offer users numerous payment options, including bank transfers, PayPal, and credit and debit cards. All these payment options have their advantages and disadvantages. Ensure you go through the limitations and select the platform that is most suitable for you.
Step 4: Start Trading or Buying Bitcoin
Once you have funded your exchange or brokerage trading account, you can start trading Bitcoin or buy it to hodl it securely on Bitcoin wallets. If you are going with a broker, you are only gaining exposure to Bitcoin as a speculative asset and not buying the real assets. You will gain exposure to Bitcoin via investment vehicles like contract futures and CFDs. As such, you don’t have to worry about holding the underlying coin.
Meanwhile, if you are using a cryptocurrency exchange, you will buy real BTC coins. By holding the actual bitcoins, you can move them to external wallets to ensure they are safe, or you can trade them against a wide range of cryptocurrencies and fiat currencies. The BTC/USD pair is perhaps the most popular on trading platforms.
There are some platforms that provide both services. Binance is a crypto exchange that also allows users to gain access to cryptos via futures and options contracts. eToro is a brokerage platform that allows its users to buy the actual bitcoins.
Step 5: Optional Steps
You can take extra steps to ensure the security of your Bitcoin investment or boost your chances of making more money.
Store BTC in an external wallet: You can store the coins in an external wallet like KeepKey, Trezor or Ledger. This will ensure that your BTCs are safe, even if you are holding them for months or years.
Hedge the bitcoins: If you are a derivative trader, you can hedge your bitcoins to manage risk.
What is the Best Payment Method for Buying Bitcoin in USA?
Cryptocurrency traders in the United States have access to a wide range of payment options when it comes to buying BTC from exchanges and brokers. There are numerous payment options, including PayPal, bank transfer and credit card. The option you choose depends on your preference. Some of the available payment options are discussed below.
Buy Bitcoin with Cash: You can use cash to buy bitcoins from peer-to-peer (P2P) exchanges.
Buy Bitcoin with Credit Card: The credit card option is popular due to its fast transaction speed and security. However, it has a higher fee as compared to some of the other payment options.
Buy Bitcoin with Bank Transfer: Some traders prefer to fund their accounts using bank transfers since it has low fees and adequate deposit security. However, the transaction time is longer compared to other payment methods.
Buy Bitcoin with PayPal: PayPal is another convenient method of buying Bitcoin directly in USA.
Why Buy Bitcoin?
You can buy Bitcoin from an investment point of view. The leading cryptocurrency has outperformed several financial asset classes since it launched 12 years ago. BTC’s performance over the past few years has convinced both retail and institutional investors to enter the cryptocurrency market and buy Bitcoin. So many investors now see Bitcoin as a hedge against inflation.
BTC/USD 1-year chart. Source: Coinmarketcap
Over the past year, Bitcoin’s price surged by over 300%, despite the recent bearish sentiment in the market. As of July 2020, Bitcoin was trading above $9,000 per coin, and now it is trading above $32,000. The huge ROI generated from Bitcoin investment has convinced more people to join the market.
You can also buy Bitcoin to use it as a payment option. Bitcoin has gained huge adoption from retail outlets across the United States. Thanks to this adoption, you can buy bitcoins from cryptocurrency exchanges and use them to pay for goods and services.
Is it Legal to Buy Bitcoin in USA?
There are no laws against buying Bitcoin in the US. There is no clear regulation for crypto in the United States. However, regulatory agencies such as the Securities and Exchange Commission oversee some of the activities in the market.
To ensure that your investment is safe at all times, we recommend buying bitcoins from a regulated exchange or broker. They provide better security for your funds and a safer trading environment.
Where Can I Use Bitcoin in the USA?
Bitcoin has gained massive adoption in the United States. The cryptocurrency is accepted as a payment option by some major retailers such as Microsoft. Home Depot, Namecheap, Starbucks, Overstock, AT&T and more.
Currently, there are over 21,000 Bitcoin ATMs in the United States. It is the country with the highest number of Bitcoin ATMs in the world. With Bitcoin ATMs in virtually every city across the country where you can buy, sell and transfer BTC with ease.
Our Recommended Best Way to Buy Bitcoin in USA
Americans can buy Bitcoin from numerous cryptocurrency exchanges and brokerage platforms. To make things easier for you, our research team has conducted in-depth research on various regulated platforms and has selected the most reliable, convenient, and cost-effective way to buy Bitcoin in the US which is displayed below.
Frequently Asked Questions
Yes. MoneyGram is a financial institution that recently permitted US customers to buy and sell bitcoins at any of their outlets across the country. This was possible through its partnership with Coinme.
The fee structure varies from exchange to exchange and from broker to broker. Some of the exchanges adopt the maker/taker fee system while others have a flat-fee system. Ensure to check the transaction fee on each platform before deciding to buy bitcoins with them.
Yes. However, we recommend using regulated crypto exchanges and brokerage platforms to buy Bitcoins but you can also buy bitcoins from P2P platforms in the United States.
There are a number of things you should consider such as their regulatory status (only deal with regulated platforms), trading volume (to ensure your order can be processed easily at all times), trading tools and payment options.
Yes. The Internal Revenue Service (IRS) considers Bitcoin or other cryptocurrency holdings to be “property” for tax purposes. This implies that the cryptocurrency is taxed in the same way as any other assets you own, such as stocks or gold.