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How to Buy Cryptocurrency in USA in 5 Simple Steps

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The cryptocurrency ecosystem is enormous in the US and this is not only because this is the place where it all began, but also because of government support and crypto friendly policies. There isn’t sufficient official rulemaking at the federal level regarding crypto, but institutions such as the Financial Crimes Enforcement Network (FinCEN) are cooperating. At the state level, Wyoming and New York have the most crypto-friendly attitude.

If you wish to buy cryptocurrency in the USA, then you have come to the right place. This guide covers all the essential things you need to know throughout the purchasing process.

Quick Guide to Buy Cryptocurrency in USA Today

1

Join the right platform

Select the preferred broker or crypto exchange and create an account. You will need to enter your real name and a working email address/mobile number at the registration window. However, make sure you provide correct details because the platform might deny you an account if the information fails to check out during the KYC (know your customer) process. In addition, the platforms are legally bound to make sure they know the true identity of their clients.

2

Fund the account

Please note that some exchanges do not require users to pre-load funds into their accounts. For those that do, they provide a variety of payment options to use, including credit cards, bank transfers, and online payment providers like PayPal and Skrill. Also, all brokers require funding of the account. The time taken for the funds to reflect into your account varies depending on the payment method.

3

Buy cryptocurrency

With the account funded, you can go ahead and make the first trade. For a brokerage account, you will proceed to the trading section and select the appropriate crypto pair. Then, specify the order size and push the order to the broker. Next, you will navigate to the “Exchange” section and select the appropriate coin if you have an exchange account. Finally, select the amount you wish to purchase and the preferred mode of payment, and hit ‘BUY.’

Step by Step Guide - How to Buy Cryptocurrency in USA

Cryptocurrency usage is more widespread in the US than in many other parts of the world. Yet, we recognise that not every person has the appropriate information regarding purchasing digital assets. Therefore, the following steps should give you the start you need. 

Step 1: Find an Appropriate Platform to Buy Cryptocurrency

Let’s begin by emphasising that all cryptocurrency platforms are great places to buy tokens, as long as they are regulated. As such, your choice of the place to buy crypto comes down to personal preferences.

For example, you should select a crypto exchange if you intend to take the delivery of tokens into your custody. People who choose to buy crypto over an exchange often intend to hold the coins for an extended period. Ultimately, they would sell when prices get high enough. 

A broker is ideal for investors who intend to leverage the volatility in the crypto market for profit. There are those people who find thrill in making hundreds of trades in a day and making small gains every time. Such people could use the cryptocurrency CFDs available on brokers’ trading platforms.

Step 2: Registration / Create a New Account

If you can recall, we mentioned earlier that the USA does not have an official stand regarding cryptocurrency at the federal level. However, the relevant regulators have come up with few rules targeting the sector to ensure customers are protected. For example, all trading platforms must obtain operational licenses from relevant authorities.

One of the requirements for a licensed broker/exchange is that all clients must have an account with KYC. So, you must register with the preferred platform before proceeding. Thankfully, the registration process is fast and straightforward. 

Please be sure to provide accurate details to ensure a smooth KYC process. The KYC process enables the platforms to know you and to be able to explain your membership in case something goes awry. Also, this process increases the security of the other users on the platform. 

The brokers and exchanges have a legal obligation to verify your identity and address. As such, you will need to provide copies of documents such as ID and bank statements.  

Step 3: Deposit Funds

The deposit process varies based on the payment method used. For example, you will need to verify your bank account first before you deposit via bank transfer. However, depositing via credit card is more straightforward. 

On the trading platform, go to the “Wallet Balance” section, then hit the ‘Deposit’ button. Next, select the currency type and then the payment method. 

For your information, the payment methods available for each platform are different. In addition, while some platforms offer a long list of options, others might limit the list to just a handful.

Step 4: Start Trading or Buying Cryptocurrency

You can only start participating in the cryptocurrency market with an active account. 

When using an exchange, buy the preferred coin and send them to your private wallet. This last step is critical for the security of your funds. However, you could keep the coins with the exchange if you intend to dispose of them sooner.

If you choose a broker, navigate to the “Trading” tab, and select the appropriate crypto derivative. Then, follow the prompts and submit the ‘BUY’ or ‘SELL’ order.

Step 5: Optional Steps

If you purchased a coin, you might want to secure the tokens. For example, you could move them from the exchange’s custody to a private wallet. For the utmost security, use a wallet without access to the internet or a ‘cold wallet.’

If you open a trading position, the next important thing you should do is risk management. Risk management entails installing stops to protect your position from sudden adverse surges. Hedging your primary investment by using derivatives is a popular strategy. 

Buy Cryptocurrency in the USA today!

What is the Best Payment Method for Buying Cryptocurrency in USA?

Each platform supports a unique range of payment options because they know clients have unique personal needs. Thankfully, all major payment methods worldwide are available in the US. Therefore, it is upon you to vet the channels and select what suits your budget and needs.

  • Buy Cryptocurrency with Cash: Crypto ATMs enable fast, seamless, and anonymous crypto purchases.

  • Buy Cryptocurrency with Credit Card: Not ideal because most credit card companies charge high fees.

  • Buy Cryptocurrency with Bank Transfer: Funds take time to reflect, but the channel is safe and affordable.

  • Buy Cryptocurrency with PayPal: Fast funds transfer and very convenient.

  • Buy Cryptocurrency with Bitcoin: Cost-effective, and one can purchase crypto anonymously.

Why Buy Cryptocurrency?

Cryptocurrency is no longer a buzzword, especially in the US. Instead, there is a growing feeling that digital money is powerful enough to supplant paper money. To illustrate just how significant support digital assets are receiving in the country, consider Silicon Valley’s attitude.

For example, top billionaires in Silicon Valley, such as Elon Musk, believe cryptocurrency is the future of money. In an episode of the “FYI — For Your Innovation” podcast released on Tuesday, February 19, 2019, Musk said that “Paper money is going away”.

Interestingly, Musk anchors his argument for cryptocurrency on the belief that digital money is built on a “brilliant technology” that provides “a far better way to transfer value than pieces of paper”.

Twitter’s Jack Dorsey is also an ardent supporter of cryptocurrency. He is also a top executive at Square, a digital payments company that accepts Bitcoin. Dorsey himself is a Bitcoin holder, and he was behind the idea for Square to acquire about 8,000 Bitcoin in 2020.

Interestingly, the billionaire supporters of cryptocurrency seem to be onto something. So far, cryptocurrency has shown the ability to gain value over time, something that paper money cannot accomplish. 

For example, at the time of writing, the market capitalisation of the cryptocurrency ecosystem is up 73% year-to-date to $1.35 trillion. Most of the value comes from the tokens’ ability to store value better than fiat currency, such as the US dollar.

Total Cryptocurrency Market Cap (year-to-date 2021) 

Source: CoinMarketCap

Despite the volatility in the cryptocurrency market, digital assets have demonstrated that they gain value over time. This could be a great incentive to buy cryptocurrencies today.  

Is it Legal to Buy Cryptocurrency in USA?

In the introductory section of this guide, we mentioned that the US does not have an express ban on cryptocurrencies. But digital money is not legal tender either. However, the Financial Crimes Enforcement Network (FinCEN) considers crypto-focused platforms such as brokers and exchanges as money transmitters. This recognition creates a legal space for the exchanges and brokers to operate, purchasing crypto in the USA legally. 

Where Can I Use Cryptocurrency in USA?

Since the last bull run in the cryptocurrency market, more companies in the US are coming to terms with the possibility of cryptocurrency becoming money. Therefore, as of June 30, 2021, 11 major companies were accepting crypto payments.

For example, Microsoft started accepting Bitcoin payments in 2014, although for the online Xbox Store only. On its part, Overstock accepts multiple coins, including Bitcoin. The company also holds a substantial amount of cryptocurrency. Other companies that accept cryptocurrency include Home Depot, Namecheap, Starbucks, Whole Foods, NewEgg, Tesla, and more.

Besides big-name brands and retailers, you can use cryptocurrency at 21,173 ATMs available countrywide, as of July 24, 2021. The tellers allow customers to buy and sell up to 11 tokens including Bitcoin, Ether, Litecoin, Monero, and Ripple.

 

Frequently Asked Questions

  1. Yes. The IRS considers cryptocurrencies as taxable assets, and charges a tax rate ranging from 10% to 37%. However, the tax rate depends on the period you have held the crypto-assets.

  2. No. There are thousands of platforms offering a chance to purchase a wide variety of tokens. Most exchanges accept various payment methods, including debit cards, bank transfers, and even PayPal.

  3. Yes. Most reputed platforms will insist on identity verification as part of KYC norms.

  4. Yes. Recall that cryptocurrency exchanges enable you to buy digital currencies using fiat, i.e., US dollars, euros, etc. So, in the same way that the platforms take your cash and give back cryptocurrencies, they can also take your tokens and give back cash. Just log onto the exchange’s platform and find out how to sell cryptocurrency.

  5. As with any other highly volatile market, cryptocurrency comes with a certain degree of risk. Sometimes, price fluctuations in the market could be unsustainable, which means you need to install proper hedges whenever you open a position. Thankfully, security risks have gone down. As a result, the cryptocurrency ecosystem is safer today than ever before, and it is likely to continue on this path as it matures further.

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