How To Buy Bitcoin (BTC) (2023)

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Bitcoin (BTC) has seen meteoric growth in recent years. In May 2016, you could buy 1 BTC for about $500. As of August 2022, even with all the price drops, a single Bitcoin was still worth around $23,000. That’s growth of approximately 4,500%.

Some analysts believe the price of Bitcoin could rise even further as cryptocurrency and blockchain technology become a bigger part of people’s daily lives. But buying Bitcoin comes with big risks. Along with impressive gains, BTC has also experienced devastating declines.

After almost reaching $69,000 in November 2021, for example, the value of Bitcoin plummeted to around $17,708 in mid-June.

Today, BTC remains a highly volatile asset. According to Kraken Intelligence’s latest Monthly Market Recap and Outlook report, Bitcoin’s annualized volatility last month was slightly higher than its historical average at 61%. But it’s an improvement from June, which saw 91% volatility for BTC.

Any investors who purchased Bitcoin in the past year will have experienced a loss, as the original crypto has slid downward. Those who bought Bitcoin three years ago are looking at more than a 100% return.

If you want to buy Bitcoin, experts recommend that you invest only a small percentage of your net worth.

What Is Bitcoin?

Bitcoin is a decentralized digital currency, which operates without the oversight of banks and governments. It holds the distinction of being the first-ever cryptocurrency, launched in 2009.

In the words of its creator, Satoshi Nakamoto, Bitcoin was created to allow “online payments to be sent directly from one party to another without going through a financial institution.”

Today the entire cryptocurrency market is roughly worth $1.1 trillion, with Bitcoin representing 41% of the market.

While it began life as a payments network, Bitcoin has evolved into an investment asset. Most holders consider BTC a store of value, and it’s often referred to as “digital gold.”

How Does Bitcoin Work?

Bitcoin transactions are verified by crypto miners via a proof-of-work consensus mechanism. Proof of work is a validation process that uses a group of miners to validate each block in the blockchain.

For Bitcoin, this process usually takes up to 10 minutes. That’s much slower than many competing cryptocurrencies, to say nothing of conventional payments networks.

Still, Bitcoin is accepted as a form of payment by some retailers and merchants, such as Microsoft, Overstock and Whole Foods, to name a few.

Where To Buy Bitcoin

To buy Bitcoin or any cryptocurrency, you’ll need a crypto exchange where buyers and sellers meet to exchange dollars for coins.

There are scores of exchanges out there, but as a beginner, you’ll want to opt for one that balances ease of use with low fees and high security. If you don’t already have an exchange in mind, check out our top picks for the best crypto exchanges.

How to Buy Bitcoin

After choosing an exchange, you have to fund your account before beginning to invest in Bitcoin. Check if your exchange has a Bitcoin wallet built into its platform. If not, you’ll need to find one of your own. Once your account is funded, you can place your first order to buy Bitcoin.

Depending on the platform you’re using, you may be able to purchase it by tapping a button, or you may have to enter Bitcoin’s ticker symbol (BTC). You’ll then have to input the amount you want to invest.

If Bitcoin’s current price was around $23,000, you’d need to invest that much to buy 1 BTC. If you invested less, say $1,000, you’d get a percentage of a Bitcoin equal to about 0.043 BTC.

How To Buy Bitcoin On A Crypto Exchange

You can buy BTC on several different crypto exchanges. Here are a few exchanges where you can exchange U.S. dollars for BTC:

  • Coinbase
  • Kraken
  • Bitfinex

Note the terminology of “trading pairs,” such as BTC to Tether (USDT) or USD Coin. In the case of BTC/USDC, bitcoins can be converted into Tether, a stablecoin whose value is pegged to the U.S. dollar. Here are a couple of exchanges that pair BTC to USDC:

  • Binance.US
  • KuCoin

How to Buy BTC With PayPal

You might be tempted to buy your Bitcoin on PayPal, but purchasing crypto this way means you cannot move your Bitcoin around easily. According to PayPal’s website: “You can only hold the cryptocurrency that you buy on PayPal in your U.S. personal account. Additionally, the cryptocurrency in your account cannot be transferred to other accounts on or off PayPal. You will not be able to transfer crypto assets from your cryptocurrencies hub to another cryptocurrency wallet.”

For that reason, you might consider another way to buy and store your Bitcoin.

There’s also another way to use PayPal to buy Bitcoin. For example, crypto exchanges like Coinbase and eToro will allow you to link to your PayPal account (as a payment processor) to purchase crypto. In this instance, PayPal is being used as a deposit method to fund your account.

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How to Buy Bitcoin With a Credit Card

Investors should consider that platforms may charge higher transaction fees for certain funding options. While you may purchase BTC with a credit card, we strenuously advise against it. That’s because credit card transaction fees on crypto exchanges often run high.

In addition, if you use a credit card to buy cryptocurrency, it generally will count as a cash advance and be subject to a higher interest rate than you pay on regular charges. Moreover, taking on debt to buy volatile investments is extremely risky.

It’s generally advisable to pay for cryptocurrency purchases with cash, or with another crypto you own.

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How Much Bitcoin Should I Buy?

Experts generally agree that cryptocurrencies shouldn’t make up more than 5% of your portfolio. Given its position as the first and largest cryptocurrency, Bitcoin could easily be a sizable portion of those holdings.

There are many reasons why experts believe Bitcoin and other cryptos should only be a small percentage of any investor’s portfolio. One reason is that although cryptocurrencies have been lucrative for some long-term investors and still suffer from extreme volatility.

Store Your BTC

The crypto exchange you use probably has an integrated Bitcoin wallet or at least a preferred partner where you can safely hold your BTC. Some people, however, do not feel comfortable leaving their crypto connected to the internet—a “hot wallet”—where hackers may more easily steal it.

However, many major exchanges have private insurance to reimburse clients if this happens. BTC can be stored in several ways, whether with online or offline storage:

  • Hardware Wallets. A hardware device stores the private keys to your assets and allows you to interact with the wallet without exposing your data. Trezor and Ledger are examples of hardware wallets that support BTC.
  • Offline storage. Sometimes referred to as “cold storage” or a “cold wallet,” it is considered a safe way to store BTC because this type of storage isn’t accessible via an internet connection. You can keep your crypto on paper using a paper wallet—this will generate a public key and private key for your crypto.
  • Software Wallets. Desktop wallets, considered “hot” wallets, are programs downloaded to store your crypto asset. There are also mobile wallets that interface with managing crypto assets. Trust Wallet is an example of a mobile wallet where you can store BTC.
  • Crypto Exchanges. Many exchanges that trade BTC will let you store your crypto with their wallets. These crypto exchanges include Coinbase or eToro, to name a couple.

What Can You Buy With Bitcoin?

Once converted from Bitcoin to a fiat currency, Bitcoin users can use their cash to purchase anything they want.

As far as using BTC directly for payments, those options are much more limited. However, here’s a list of a few of the major retailers who do accept Bitcoin as a form of payment:

  • Microsoft: This Big Tech company accepts Bitcoin payments at their Xbox store.
  • Overstock: The American retailer has a cryptocurrency payment button, which includes Bitcoin, on the company’s checkout page.
  • Starbucks: The national coffeehouse doesn’t accept Bitcoin directly in stores but will accept Bitcoin payments through a partnership with the Bakkt app.
  • Whole Foods: The supermarket company accepts Bitcoin payments via the Spedn app.

Should I Invest in Bitcoin?

When Bitcoin’s price goes to the moon, investing in the popular cryptocurrency can be tempting. But while it has the potential to be a lucrative investment, you should be cautious: It’s an incredibly volatile purchase, and experts don’t recommend you allocate a large percentage to this risky asset class.

If you’re unsure whether investing in Bitcoin or other cryptocurrencies is a good idea for your needs, consider meeting with a financial planner who can help you figure out where cryptocurrencies fit into your investment strategy.

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(Video) How To Buy Bitcoin For Beginners | Step by Step

FAQs

How do I buy BTC? ›

5 ways to buy bitcoins
  1. Financial apps. Many financial apps such as PayPal and Venmo now allow you to trade cryptocurrency. ...
  2. Crypto exchanges. Crypto exchanges are another popular option for those looking to buy Bitcoin. ...
  3. Trading apps. ...
  4. Traditional brokers. ...
  5. Bitcoin ATMs. ...
  6. Hot wallets. ...
  7. Cold wallets.
7 Oct 2022

How do beginners buy bitcoins? ›

Here's how to invest in Bitcoin, in 5 easy steps:
  1. Join a Bitcoin Exchange.
  2. Get a Bitcoin Wallet.
  3. Connect Your Wallet to a Bank Account.
  4. Place Your Bitcoin Order.
  5. Manage Your Bitcoin Investments.

Can I buy 1 Buy Bitcoin? ›

Bitcoin can be purchased fractionally, so you don't need to buy a full Bitcoin to own some. For example, if Bitcoin's price is $10,000, you can purchase 0.1 Bitcoin for $1,000.

How much money do I need to buy one Bitcoin? ›

Coinbase has a minimum spend of $2 and the minimum deposit depends on how you transfer money. Gemini's trading minimums depend on the individual crypto -- its minimum for Bitcoin is 0.00001 BTC (about $0.60) and it doesn't have a minimum deposit. eToro has a minimum deposit of $50 and a minimum trade size of $25.

How much does a Bitcoin cost? ›

Bitcoin Price Chart (BTC/USD)
24 Hour High24 Hour LowMarket Capitalization
19,686.35 USD19,201.05 USD376,936,553,116.08 USD

What is the best Bitcoin wallet? ›

Compare the Best Bitcoin Wallets
CompanyType of WalletPurchase Cost
Exodus Best for BeginnersHotFree
Electrum Best for Advanced Bitcoin UsersHotFree
Mycelium Best for Mobile UsersHotFree
Ledger Nano X Best Hardware WalletCold$149
1 more row

Can I invest $100 in Bitcoin? ›

If you're looking into cryptocurrency for the first time, you may be wondering, “can I start by investing $100 in Bitcoin?” The answer is definitely yes.

How do I make money with Bitcoin? ›

How to Make Money with Bitcoin
  1. Lending Bitcoin. A lot of people use Bitcoin lending in order to earn some money. ...
  2. Bitcoin Mining. Bitcoin mining is another great way for investors to earn some money. ...
  3. Bitcoin Faucet Websites. ...
  4. Bitcoin Trading. ...
  5. Bitcoin Buying. ...
  6. Bitcoin Affiliate Marketing. ...
  7. Accepting Bitcoin as Payment. ...
  8. Bitcoin Tips.
26 Aug 2022

Who is owner of BTC? ›

Satoshi Nakamoto
NationalityJapanese (claimed)
Known forInventing bitcoin, implementing the first blockchain
Scientific career
FieldsDigital currencies, computer science, cryptography
2 more rows

How much is a Bitcoin per dollar? ›

19,085.7 USD

Do I need a wallet to buy Bitcoin? ›

Some brokerages and payment services like Robinhood, PayPal, Venmo and Cash App let you buy bitcoin and other crypto easily without a crypto wallet. These services store your digital currency for you in their own "custodial" wallets, which means you're trusting the company to secure, protect and hold your crypto.

Who gets the money when you buy Bitcoin? ›

(1) When you buy or transfer cryptocurrency, your money goes into your digital wallet (account) to fund the currency, or virtual tokens, via an exchange such as CoinBase or Gemini. (2) All transactions are verified through a peer-to-peer network of computers that participate in the mining, or verification, process.

Can I invest in Bitcoin with $1? ›

Cash App makes it easy to invest in stocks and bitcoin, whether you're just getting started or already a pro.

How much should I invest in Bitcoin for beginners? ›

How much money do I need to start investing in cryptocurrency? In theory it takes only a few dollars to invest in cryptocurrency. Most crypto exchanges, for example, have a minimum trade that might be $5 or $10. Other crypto trading apps might have a minimum that's even lower.

What happens when you buy Bitcoin? ›

Once you own Bitcoin, you can transfer them anytime, anywhere, reducing the time and potential expense of any transaction. Transactions don't contain personal information like a name or credit card number, which eliminates the risk of consumer information being stolen for fraudulent purchases or identity theft.

What is the lowest price of bitcoin? ›

According to historical data at Investing.com, Bitcoin's price never broke above $0.40 per bitcoin in 2010 but did manage to hit that level in early 2011.

How long does it take to mine 1 bitcoin? ›

With today's difficulty rate but much more advanced systems, it may take a solo miner about 10 minutes to mine one bitcoin. The average rate for most miners, however, stands at 30 days.

What does a bitcoin look like? ›

Bitcoins look like a line of 1s and 0s on a computer screen because they have no physical form. Like other forms of cryptocurrency, Bitcoin is a purely digital product that doesn't exist outside of the digital world.

How do I open a Bitcoin account? ›

How do I create a bitcoin wallet?
  1. Go to the App store (iOS) or Google Play store (Android).
  2. Search and download Coinomi.
  3. Open the app and write down your 24-words recovery phrase. ...
  4. Set a strong password.
  5. Add bitcoin to your wallet.
  6. Use your receiving address to receive bitcoin.

Where to store btc? ›

Just the way we keep cash or cards in a physical wallet, bitcoins are also stored in a wallet—a digital wallet. The digital wallet can be hardware-based or web-based. The wallet can also reside on a mobile device, on a computer desktop, or kept safe by printing the private keys and addresses used for access on paper.

Which crypto to buy now? ›

4, 2022.
  • Bitcoin (BTC) Bitcoin has been around for the longest of any cryptocurrency. ...
  • Ethereum (ETH) ...
  • Binance Coin (BNB) ...
  • Cardano (ADA) ...
  • Polygon (MATIC) ...
  • Terra 2.0 (LUNA) ...
  • Avalanche (AVAX) ...
  • Chainlink (LINK)
5 Oct 2022

How do I buy bitcoins with my debit card? ›

A quick step-by-step guide on how to buy bitcoins with debit card on Coinbase:
  1. Create account. Open your account on Coinbase.
  2. Connect debit card. Add your debit card to your Coinbase profile.
  3. Verify ID. Verify your ID with Coinbase.
  4. Buy bitcoins! Buy bitcoins using your debit card.

How can I buy bitcoins without a broker? ›

As for these cryptocurrency exchanges, one can turn to digital platforms like Coindesk, ZebPay, or Coinbase. These digital exchanges allow investors to purchase Bitcoins at the current market price.

Can I still buy Bitcoin in UK? ›

The best places where and how to buy Bitcoin in the UK are Coinbase, where ACH deposits are free, SEPA is €0.15; eToro where the deposit is free; and on LocalBitcoins where deposits are also free, if you are considering the cost.

Which is the best Bitcoin investment site? ›

These cryptocurrency sites can help investors earn profits through various methods
  • Coinbase. Coinbase is by far the most popular and one of the best cryptocurrency exchanges that investors can use. ...
  • Binance. ...
  • Voyager. ...
  • BlockFi. ...
  • Kraken. ...
  • Bitfinix. ...
  • KuCoin. ...
  • Changelly.
16 Feb 2022

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2. Buy Bitcoin with a Debit or Credit Card
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3. How to Buy Bitcoin on Cash App Instantly (Buy Bitcoin with Debit Card)
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4. How to Buy Bitcoins in 2022? (4 different methods reviewed)
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