After its introduction, Bitcoin has received massive attention from all over the world. It’s not surprising, though, that many people have no idea how to buy Bitcoin.
This article gives you a step-by-step breakdown of how to buy Bitcoin in the USA.
Table of Contents
What is Bitcoin?
Bitcoin is a decentralized digital or virtual currency that you can use to make or receive payments. It was introduced in 2009 by Santoshi Nakamoto, and since then, it has experienced tremendous growth as more people continue to adopt it.
Transactions require no intermediary as you can send and receive bitcoins directly to or from another person’s wallet. This is commonly referred to as peer-to-peer transactions. It’s not like physical money that can be printed and distributed for making transactions. Any transactions made with are recorded and stored as a block in the blockchain.
Bitcoin & Cryptocurrency Trading in the USA
The USA is among the many countries that have accepted Bitcoin as a mode of transaction. People can buy and sell bitcoins, as well as trade them for other currencies. Bitcoins’ popularity in the USA is significant as many merchants are beginning to accept its usage. According to the US treasury Departments’ Financial Crimes Enforcement Network, Bitcoin trading in the USA is legal.
Since this declaration in 2013 by the US Treasury, many crypto exchanges have sprouted giving an opportunity to millions of US citizens to participate in trading Bitcoins. Since Bitcoin is not regulated by any institution, the safety of your fund depends on the crypto exchange platform you choose to meet your trading needs.
How to Buy Bitcoin in the USA (Step-by-Step Guide)
You can buy Bitcoin either through a crypto exchange or through a cryptocurrency broker. There are many crypto exchanges that you can choose to meet your needs. Your choice on these crypto exchanges is dependent on the goals you want to achieve.
The best crypto exchange for buying and trading is eToro. To start buying, you’ll first need to create an account with eToro. Here’s a step by step guide on how to sign up.
eToro accepts payment through different payment methods. Some of them are Credit cards, PayPal, Bank Transfer, Rapid Transfer, Skrill, Neteller, and Union Pay.
You can deposit a minimum of $50 and a maximum of $2,000 for an unverified account for users in the USA. If you prefer depositing by wire transfer, your minimum deposit will be $500.
To fund your account,
Click on the “Deposit Funds” icon on your account.
Choose from the amount options shown or click on “Custom Amount” to enter your amount.
Choose a payment method.
Click on the “submit” icon.
Depending on the payment method you choose, your funds should show in your account anytime.
Step 3 – Buy Bitcoin
Most of the payment methods on eToro deposit money instantly into your eToro account. Once the funds reflect on your account, you are free to buy Bitcoins.
On the profile menu list, click on “Trade Markets.” On the pop-up window, click on “Crypto.” Choose the option to buy Bitcoins, enter your desired amount, and then click on “Open Trade.” The bitcoins you have purchased will appear in your Bitcoin account.
There are several reasons why eToro is the best option for US citizens when buying Bitcoin and other cryptocurrencies.
eToro charges no commissions and doesn’t charge any hidden fees.
It has a $100k demo account that uses real market data so that you can have a live market experience on the demo. The demo account gives you a chance to practice and play in the market until you get the hang of it. You can switch to a live version when you’re ready.
Your Bitcoin is safe in the eToro wallet because there are regulations put in place by FCA, CySEC, and ASIC to protect investors.
Bitcoin Buying Fees on eToro
When buying Bitcoin, eToro charges a fee called Spread. Like most trading platforms, eToro uses the difference between an asset’s buying and selling prices to determine the charge to apply.
The formula to calculate the fees charged is as follows:
Spread x Price in USD x Number of units
A typical Spread that is used for Bitcoin is 0.75%
If the trade goes overnight, a night fee is charged. It is calculated as:
Fee x amount of units
You can view the fees you’ve paid by visiting your portfolio page. On the history tab, you’ll see fees that were paid for each trade you placed.
How Registering with eToro Work in Detail
Let’s go through the registration process one more time.
You’ll first need to visit the eToro’s official website at etoro.com. On the homepage, find the “Join Now” green icon, and then click on it. You’ll be redirected to a page with an application form for you to fill in.
Choose a unique username for you to use on the site. Enter the username on the “Username” slot. On the next space labeled “Email,” enter a valid email that you can access because eToro will send a confirmation link to your email.
Finally, choose a strong password for your account. Your password should contain at least one uppercase, lowercase, a number, and a symbol. Remember, keeping your account safe is a priority.
After filling in these details, accept terms and conditions by ticking on both boxes and then click on the “Create Account” blue icon to complete the registration. Go to your email and click on the confirmation link sent so that you can activate your account. Easy-peasy! Your account is now ready for use.
One crucial step is to verify your eToro account. A new unverified account has a list of limitations pegged to it. For example, you cannot deposit more than $2000 until you verify your account.
To complete the verification, you’ll need to provide this information to eToro.
A government-issued Identify Card.
A verified phone number.
Proof of address.
Other documents may be requested by eToro just in case they are needed. This whole process is legal and in accordance with regulations.
A verified account enjoys all the features and benefits of the platform, including unlimited deposits and withdrawals.
Here is how to verify your account.
On your eToro profile, click on the “Complete Profile” icon next to your name. On the pop-up window, click on “continue” at the bottom left, and you’ll be redirected to a page where eToro asks for your information.
You’ll be required to provide your full name, your address, and your birthdate. You’ll also need to tell eToro about your past trading experience.
After that, you’ll be required to provide your phone number. eToro sends a verification code to your phone as an SMS. Check the code and enter at the required place on the browser and complete the phone number verification process. Proceed to the next step.
Your proof of identity can be a government-issued identity card or a passport. It should clearly show the name, date of birth, valid expiry date (for documents like driving licenses), a colored photo, and the date it was issued. You’ll upload these in the 8th step of the verification process.
Finally, you should provide your proof of address. It can be your bank statement, Credit card statement, utility bill, Council Tax Bill, Tax Bill, Rental/Lease agreement, employer letter, etc. This document should have been issued within the past six months.
When uploading documents for Proof of Identity and Proof of Address, always ensure that the documents are scanned flat, with all four corners showing and all the details visible and clear.
eToro team takes about 2-3 days to verify your documents and then email you the outcome individually. It could be positive that your account has been successfully verified or negative, that the documents were rejected. They give a clear explanation of why the documents were rejected, and then you can reapply correctly.
Deposit Money to Buy Bitcoin & Crypto
With a wholly verified account, nothing can stop you now. You can use any payment method accepted on eToro to deposit funds and start trading.
At the bottom corner of your profile menu, click on the blue “Deposit Funds” icon. A “fund your account” pop-up window shows up, and you can choose how much you’d like to deposit. You can enter any amount using the “custom amount feature at the top right corner of the pop-up window.
Choose a payment method and submit it. After submitting, your money will automatically show on your eToro account—the speed of upload fast or slow depending on the payment method you choose.
Buy Bitcoin with PayPal
PayPal has, in recent years, been solidifying its relationship with Bitcoin, making it the most popular method for deposits. It’s preferred because of its no added commissions and the transactions are instant.
While choosing a payment method to use and make a deposit, choose PayPal. A new window will redirect you to a page where you can enter your PayPal login details for verification. After verification, click on “Pay” to authorize payment and complete the purchase.
Buy Bitcoin with Credit Card
The process is relatively easy. First, find the “buy crypto” icon and click on it. Enter the number of Bitcoin you’d like to buy, add your payment details to Simplex’s billing firm.
The difference is in the leveraging. If you place a buy position for Bitcoin without leverage, you are trading with the real asset. eToro buys the Bitcoins in your name and keeps them in a different account under your name.
When you leverage a position while trading, then the trades are executed as CFDs. CFD is an abbreviation for Contract For Difference. It’s an excellent way to trade for someone looking to profit without really owning the asset, in this case, Bitcoin.
Buy “Real” Bitcoin
Let’s look at the steps in buying real Bitcoin.
On your profile menu, click on the “Trade Markets” icon.
On the drop-down menu, choose “Crypto.”
On the window that opens, you’ll see a buy/sell option under Bitcoin. Click on “Buy.”
Another window will open, prompting you to enter an amount. The default settings on this page are for buying the underlying asset. Unless you make changes to the settings here, then you are purchasing the real Bitcoin.
Click on “Open Trade” to complete the process.
You can now monitor price developments on your Bitcoin from your portfolio.
Buy Bitcoin CFDs
The process is basically the same as buying the real Bitcoin. You only need to make small adjustments.
On the new window prompting you to enter an amount, find where leverage is showing, and adjust it to X2. This means that your stake is twice the amount on the Bitcoin price. Leverage of X2 is the only leverage eToro offers, for now. They might decide to introduce higher leverages in the future.
Leverage amplifies not only the profits but also the losses. Therefore, it would be great to set a stop loss to limit losses and take profit to close the trade when you achieve your profit goal.
The eToro Crypto Wallet
The eToro Crypto Wallet is easy to use and offers access to over 120 cryptocurrencies in the world. It also has enhanced security to keep your cryptocurrencies safe.
The wallet had terrific features to enhance your experience as you transact with your cryptocurrencies. Here are some reasons why the eToro Crypto Wallet is the best.
There are more than 500 Crypto pairs to work with. You can easily change one crypto to another right there on the wallet.
You can easily access your wallet using your private key.
A personal and unique on-chain address is provided every time you want to send, receive, or transfer your crypto. It’s completely private.
It has advanced security features and Standard protocols that keep the wallet security-tight.
From the app, you can exchange from one crypto to another, make payments in shops, and make deposits.
The app is available on the Google play store for Android devices and on the Apple store for IOS devices.
Where Can I Use Bitcoin in the US?
The use of Bitcoins to make purchases is growing substantially in the United States. Now you can use Bitcoin to buy in some selected stores and online.
Here’s are some ways and places you can use Bitcoin in the US:-
Using Coincards – Coincards allows you to buy gift cards using Bitcoin from over 140 merchants. It’s a safe and convenient way to use Bitcoin because Coincards is accepted even in stores that do not support Bitcoin.
Using Purse.io – This platform allows you to spend your Bitcoin to buy things from online retailers like Amazon. Here’s how it works:
Let’s say you want to buy from Amazon. On the site, select the item you wish to purchase.
io identifies someone with points or a gift card for Amazon and prompts them to buy the product.
io now buys the Bitcoins from you and gives them to the person who purchased the product.
You get your product, and everybody wins.
On Whole Foods – It’s in partnership with Winklevoss Flexa app ‘Spedn,’ which allows you to buy groceries from Whole Foods using Bitcoin and several other Altcoins. It doesn’t limit you to Whole Foods only because you can use the Spedn App to make payments at Regal Cinemas, Gamestop, Jamba Juice, Baskin Robbins many other merchants that accept Bitcoin.
According to Coin ATM Radar, there are over 9,000 Bitcoin ATMs in the United States as of August 2020. A Bitcoin machine is designed in two types:
Both types have an internet connection to allow Bitcoin-purchase or sale instantly using cash.
Different companies design Bitcoin machines, but they all follow a similar process of buying and selling Bitcoins. Some use paper receipts while others a public key on the blockchain to verify transactions.
On the downside, transactions on the ATMs may be charged much higher than transactions on the wallets. On average, transactions are charged a fee of about 7% for those selling and about 9% for buyers.
Are you looking for a Bitcoin ATM near you? Coin ATM Radar can help you find one nearest to you.
What is the Price of Bitcoin in the USA?
According to data provided by Morningstar for Currency and Coinbase for Cryptocurrency at the time of this writing, 1 Bitcoin equals USD 18,321.50.
Due to the Volatility of cryptocurrencies, this price keeps fluctuating. Take time to check the updated price before you make any transactions.
Other Exchanges to Buy Bitcoin in the USA
Every crypto exchange is different in fees charged, efficiency, accessibility, and many other factors.
These are the popular exchanges in the USA, other than eToro.
Paxful – it’s a people-powered Bitcoin exchange market, offering Bitcoin at lower prices and charging zero fees on the purchases. It’s the second-best choice for buying Bitcoin in the USA.
Coinbase – It’s a reliable and trusted crypto exchange offering high buying limits when you buy with a debit card. A charge of 3.99% applies to any Bitcoin purchase using a debit card. It’s also easy to use and very beginner-friendly.
Coinmama – It offers the highest limits for buying Bitcoin with a Credit card. A charge of about 4.9% to 5.9% depending on the volume of purchase.
The increased use of Bitcoins in the USA points us in the direction of a hopeful future for Bitcoin. It’s also encouraging how many merchants are coming up to accept Bitcoin as a payment mode in their businesses.
If you are looking to buy Bitcoin, consider eToro as your best option. However, if eToro doesn’t satisfy your Bitcoin needs or seems complicated for you, our second-best choice is Paxful. In these two crypto exchange platforms, you’ll also be able to buy other cryptocurrencies and convert one cryptocurrency to another.
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