How to Buy and Sell Bitcoin

Deciding to start buying and selling cryptocurrency is progressively entering the minds of many people across the globe. Since its inception in 2009, Bitcoin has made a legitimate name for itself and holds the leading stake as the most valuable cryptocoin in the world.

Despite its immense surge in value, Bitcoin is a volatile market, and its unpredictability can be nerve-wracking for first-time investors wanting to enter into the crypto world. Knowing how to buy and sell Bitcoin is simpler than ever, as more platforms are created to get in on this modern trade.

With so much being written about this topic, scams, and platform products, it can be overwhelming to know how trading Bitcoin even works and how it can make you some real money. This guide is designed for first-time users in mind, sharing the basic how-to’s and answering the most important questions.

What You’ll Need Before Buying and Selling Bitcoin for Profit

Buying and selling Bitcoin is becoming relatively straightforward now that Bitcoin as a currency is establishing more value. There are many different apps and exchanges that are designed to help aid you in storing, exchanging, buying, and selling your Bitcoins.

The two main things you need before you start are: downloading a cryptocurrency wallet and choosing a crypto exchange platform.

Choosing a Crypto Exchange

A crypto exchange is a platform where you can buy and sell cryptocurrency. Since Bitcoin isn’t part of the traditional banking system, you can’t go to your usual bank and buy it there. You must use a crypto exchange to convert real currency into whatever crypto you want to buy.

There are hundreds of platforms to choose from, but here’s a list of the most popular ones to help keep the decision simple.

Binance
Binance.US
Coinbase
Kraken
Gemini
CashApp

Different platforms are notable for specific reasons, so knowing what you’d like to do with your platform will help with the decision. Coinbase, for example, is by far the number one platform for buying and selling cryptocurrency on the internet right now. Coinbase is simple enough for new users but is popular enough that seasoned users are also satisfied with its speed and other services.

If you’re looking to buy and trade multiple types of crypto (altcoins), however, then Binance is the best platform. For beginners, CashApp is simple and straightforward and allows you to directly buy and sell BTC in a simple peer2peer spending application.

Download a Wallet

While exchanges allow you to buy and sell Bitcoin, a cryptowallet acts as a storage device for your currencies. This storage space is equipped with private keys needed to access your cryptos and is necessary to send or receive cryptocurrency.

There are several kinds of wallets:

Software installed on a computer or mobile device (non-custodial wallet)
An online wallet (exchange wallet)
Offline wallets (a.k.a. cold storage)

Here are some great candidates for the best Bitcoin wallet:

Ledger
Robinhood
Electrum
Trezor
Exodus
SoFi

Non-custodial Wallet vs. Exchange Wallet

Some crypto exchanges have integrated wallets (aptly named exchange wallets) as the safest way to buy Bitcoin on their platform. These work differently from non-custodial wallets, i.e., the wallets independent from the exchange you’re using.

Exchange wallets are generally more convenient to use on their associated websites. On the other hand, you have little control over this wallet. For example, your account could end up frozen due to security reasons, or someone could hack the exchange and steal your crypto.

Conversely, you have complete control over a personal wallet, but that freedom also comes with the responsibility of managing it. This means following cybersecurity practices, managing backups, and more.

Knowing how to use Bitcoin wallets of different types is important for understanding whether you’re trading optimally. For example, if you’re using a crypto exchange, the convenience of using its built-in wallet might be enough for you. Alternatively, maybe you prefer Bitcoin’s pathos of decentralization and anonymity, compelling you to use personal wallets instead.

Both of these two options have their advantages and disadvantages. The kind of wallet you use ultimately comes down to your personal preference.

How to Buy Bitcoin

The crypto industry has come a long way in user experience since its onset in 2009. Now with a few notable particulars, you can begin selling and trading with relative ease.

Where to Buy Bitcoin

There are countless platforms that aid in the purchasing of Bitcoin. Most have their own procedures and unique protocols that must be followed.

It would take its own guide to cover the buying process for each platform, but there are two main categories of exchange methods that will help make the buying process more clear: Bitcoin exchanges and P2P platforms.

Buying Bitcoin from Bitcoin Exchange

Choosing to buy and sell BTC through an exchange platform requires an account and verification of your personal identity.

Usually, you have to provide some (or all) of the following to verify your account:

Phone number
Selfie
Proof of identity through an employee webcam check
Copy/photo of your passport or license
Proof of address

You’ll also have to connect a debit card, credit card, or bank account to the exchange. It’s best to use bank accounts for big BTC transfers because fees tend to be lower.

After verification, how to purchase bitcoin on your chosen exchange is quite simple.

Log on to the exchange

Buy a certain amount of BTC according to the website’s instructions
Wait for your bitcoin to appear in your account’s balance

The time it takes to receive your Bitcoin can be anywhere from 10 minutes to a few days, depending on factors such as the complexity of the transaction or the application of network fees.

Knowing how to buy Bitcoin on an exchange platform gives you the option of sending your BTC to your own personal wallet or using the one associated with the exchange site that you use.

Buying from P2P platforms

Many jurisdictions don’t view P2P markets as exchanges. P2P platforms allow for the direct transfer and trade of currencies between two people. There is no identity verification for this method, making P2P more convenient and more anonymous to use. Naturally, this also carries a risk, as anyone can be behind the transaction.

How to buy bitcoins in an environment that doesn’t come with a guarantee is a problem P2P platforms are trying to address by implementing a reputation system. By allowing reviews of traders, the reputation of users becomes a way to ensure trustworthy transactions.

Notable downsides of P2P trading are that the liquidity of BTC values can be affected, as well as at times having quite delayed transaction times.

How do you buy Bitcoin via P2P?

Browse the website’s listings to find a seller that matches your preference (mode of payment like PayPal or wire transfer, amount of BTC you want, seller’s reputation and location, etc.)
Put the desired BTC in an escrow account (this usually happens automatically when you start trading)
Pay for the bitcoins via the previously agreed-on payment method (be it online or even in person)
Wait for the seller to confirm to the website they received the payment, transferring the BTC from escrow to your wallet

Knowing exactly how to buy bitcoin online or in-person using a particular P2P platform is vital. Procedures can vary slightly in regulation or other minor differences, but all of them follow the above template.

P2P trading websites often give you an account wallet, just like exchanges do. You can opt to get your BTC from escrow directly to your personal wallet, though. Keep in mind that this could incur an extra fee and take a little extra time. You can read through the platform’s ToS to see whether this fee exists.

How to Buy Bitcoin with Paypal

PayPal has made buying BTC very simple through their platform.

Sign up with or log on to PayPal
Visit the cryptocurrency list and choose Bitcoin
Buy BTC (in values of $20, $50, $100, or $500)
Pick a preferred payment method (debit card, PayPal account, bank account)
Check the review for your payment that shows the total cost of your purchase, exchange rate, transaction fees, and more

How to Buy Bitcoin with a Credit Card

While it is possible with some credit cards to purchase Bitcoin, it may not be the best idea for a myriad of reasons. Notably, it may not be possible to use your credit card because your exchange platform doesn’t allow it, or your credit card company doesn’t.

If you can, however, the fees alone should make you think twice. Cash-advance fees, extremely high interest rates, and possible foreign currency charges are all additional fees that may make your purchase ultimately futile. The idea is to make some money off of the cryptocurrency, after all.

How to Buy and Sell Bitcoin on Cash App

Here’s the rundown on purchasing BTC via Cash App:

Download Cash App
Create an account (or sign in if you’ve already got one)

Find Bitcoin in the list of tradable cryptos
Confirm how much BTC you want to buy (either as a one-time transaction or recurring investment)
Finalize your Bitcoin purchase

Is There a Minimum Limit for Buying Bitcoin?

There’s no minimum Bitcoin investment limit for buying or selling Bitcoin—at least when trading between personal wallets. The only limit you have is the satoshi, the smallest unit of Bitcoin. A single Satoshi is worth 0.00000001 BTC ($0.00033609 at the moment of writing).

Some exchanges may have buy limits, though. For example, PayPal has set buy amounts, and you can’t buy less than the smallest one.

Bitcoin Transfer Fees

Every Bitcoin transaction comes with a fee. Which fees will be applied depends on which platform you use and how much currency you are transacting. No matter what you think about how to buy and sell Bitcoin, though, network fees will always apply.

Network fees

Network fees can vary in size. The more complex the transaction, the higher the fee. Keep in mind that “more complex” doesn’t necessarily mean bigger. For example, sending 1 BTC received in tiny increments over the last month is more complex than sending 1 BTC you got from a single transaction.

This is important to know when learning how to buy a Bitcoin sum of higher value. There are other factors to consider, such as some wallets let you customize their network fees. A higher fee will allow a faster transaction speed, while lower fees result in slower transactions. The nice thing is, the choice is yours.

Depending on the size of the transaction and the fee, transfer times range from between 10 minutes to several hours. If you set an extremely low fee, it could take days to finalize your transaction and could potentially result in it being unsuccessful (you get your BTC back, though).

Other Fees

If you’re interested in how to buy and sell Bitcoin at the lowest fee, then transactions between two personal wallets is the best option. Personal wallet-to-wallet transfers only come with network fees. If you’re using an exchange or P2P platform, other fees apply, such as:

Deposit fees
Withdrawal fees
Cash advance fees for credit cards
Listing fees
Buying fees

Before you create an account with a particular platform, check which fees it incurs on its users, so you don’t get surprised.

How To Sell Bitcoin

Selling Bitcoin is done through the same processes and platforms as purchasing. It requires that you choose an exchange or P2P platform and that you use a cryptowallet for storing and transferring the currency to other users. It involves verifying your identity with the same types of credentials and is subject to applicable fees depending on your platform choice.

Knowing how to sell Bitcoin, however, does come with a few other steps:

Place a sell offer (how much BTC you want to trade, asking price per unit, etc.)

Wait for someone to match your offer (the exchange will automatically take care of the transaction when that happens)
Wait for your funds to reach your account
Withdraw your new funds to a connected bank account

If possible, try to set transaction fees (i.e., network fees) before sending away your BTC. Just like purchasing, the smaller the transaction fee you set, the longer it takes to send your transfer.

How Do You Sell Bitcoin for Cash?

Selling BTC at specialized ATMs is a convenient, quick solution to withdrawing cash from your cryptowallet.

Here’s how selling at a Bitcoin ATM works:

Verify your identity (often through typing in a code sent to your phone)
Specify how much BTC you wish to sell
Send the BTC through a QR code provided by the machine

From here, two things can happen:

You receive your money immediately (typically when selling small amounts of bitcoin)
You wait for the transaction to be confirmed, after which you use a redeem code or ticket to take out your money.

Buying and Selling Bitcoin: Conclusion

As it gains more popularity, Bitcoin and other cryptocurrencies are becoming easier than ever to buy, sell and trade.

With so many new platforms and established industry names, you can be confident that your investment will be legitimate and get you started working with this modern financial phenomenon.

With information becoming more accessible and taking the guesswork out of investing, all you need to do is decide what is the best way to buy crypto for you.

Whether you decide to use a one-stop shop exchange office and wallet like Coinbase or decide to take your chances with P2P platforms, Bitcoin and other altcoins are becoming accessible to anyone who wants to participate in this innovative digital financial system.