How to Buy Bitcoin

Cryptocurrency Exchange

You can buy Bitcoin from cryptocurrency exchanges. Many exchanges offer dozens of cryptocurrencies to choose from, while others only offer Bitcoin and a handful of alternatives. They charge a variety of fees and consumer protections, so do your research before choosing.

Bitcoin Mining

Bitcoin mining is the process by which new Bitcoins are brought into circulation. It is also how the network confirms new transactions and is an important part of the maintenance and development of the blockchain ledger. “Mining” is performed using complex hardware that solves extremely complex computational mathematical problems. The first computer to find a solution to the problem receives the next Bitcoin block, and the process begins again.

Traditional Broker

You also have the option of buying Bitcoin from a traditional broker, but there are currently few options for traditional brokers that offer customers ways to buy and sell Bitcoin.

Bitcoin ATM

Cryptocurrency ATMs work like regular ATMs and you can use them to trade Bitcoin. They are usually placed next to regular ATMs, such as convenience stores. Before you make a transaction, be sure to check the fees you will be charged. And choose where to send your Bitcoins after purchasing.

Exchange Traded Fund

Financial firm ProShares launched the first Bitcoin-linked ETF in October 2021. The fund does not invest directly in Bitcoin, but rather in Bitcoin futures contracts. Digital currency asset manager Grayscale Investments also offers a Bitcoin trust fund. Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Classic Trust (ETCG) are publicly traded, which means you can buy them through many discount brokers. There are fees for such transactions, and GBTC sometimes trades at a premium, meaning GBTC shares often cost more than Bitcoin is worth, despite Bitcoin being its only asset holding. Some investors are willing to pay extra to buy Bitcoin through traditional exchanges without having to worry about crypto wallets and storage.

Peer-to-Peer Money Transfer App

Cash transfer services such as PayPal, Venmo or Cash App allow their users to purchase Bitcoin using the app. You can buy, store and sell Bitcoin directly on the app. PayPal and Cash App even let you send and receive payments using Bitcoin, but Venmo hasn't implemented this feature on their apps yet.

Crypto Wallet

Some crypto apps, such as games, crypto wallets, or other online services that use blockchain technology, allow users to buy and sell digital assets directly within their apps. If you use cash in one of these apps, you may end up using a third-party service like MoonPay to complete your order. Such services may cost a bit more than regular exchanges, but offer some advantages in the form of fast, relatively painless transactions.