Buying Bitcoin is very likely the first step you’ll take once you’ve set up a Bitcoin wallet like Leather. But figuring how to buy bitcoin or where to buy bitcoin (or how and where to buy crypto, for that matter) can be tricky for new users.
What to Consider When Buying Bitcoin
While people have multiple reasons for buying bitcoin, many Bitcoin users wanted to buy bitcoins because they were interested in:
Bitcoin as a store of value
Investment opportunities
Exploring different blockchain applications
Financial empowerment
A private, secure, and efficient means of transferring money
After you’ve determined why you’d like to buy bitcoin, it’s important to consider the best way to buy bitcoin based on your preferences. Much of this also depends on what kind of wallet you’re using.
Hot Wallets vs. Cold Wallets
Crypto wallets generally fall into two overarching categories: hot wallets and cold wallets. Many crypto users manage their assets using a combination of multiple hot and cold wallets given that each offers their own advantages.
Hot wallets usually include:
Extension wallets like Leather
Web wallets
Desktop wallets
Mobile wallets
Cold wallets, on the other hand, take the form of hardware devices. Over the years, hardware wallet brands like Ledger have made it easier for users to connect to blockchain-based applications and hot wallets to their wallet device.
This includes connecting your wallet to exchanges and platforms that enable you to buy bitcoin.
Where to Buy Bitcoin
Generally, there are three main places where you can buy bitcoin:
Exchanges
Bitcoin ATMs
Peer-to-peer (P2P) platforms
Especially if you’re looking for ways to buy bitcoin online, it’s important to understand that each of these three methods come with their own advantages and disadvantages. Depending on where you live, certain options may also be unavailable to you.
Cheapest Way to Buy Bitcoin
Many exchanges like Coinbase, Binance, Kraken, and Gemini allow users to buy and sell Bitcoin with low fees (or in some cases, no fee at all). A number of platforms also offer Dollar-Cost Averaging (known as DCA) where users can invest a set dollar amount at regular time intervals into Bitcoin.
As more people have adopted crypto over the years, apps like Cash App have also given users the opportunity to direct deposit in Bitcoin for little to no fees. In Cash App’s case (through a feature known as Paid in Bitcoin), users can turn a percentage of their paycheck into Bitcoin when the direct deposit comes through.
Easiest Way to Buy Bitcoin
Exchanges are still a popular option for Bitcoin buyers because of the ease with which today’s exchanges walk you through the Bitcoin purchase process. After you complete the KYC (“Know Your Customer”) needed for you to get approved for an account, you can follow a number of steps to buy BTC.
Many exchanges can also help you set up a web wallet to use on the exchange site itself. However, web wallets do come with a number of disadvantages, so you may also want to download a self-custodial wallet like Leather, for example, and transfer BTC you buy from the exchange there.
However, exchanges aren’t the only option. If you find yourself asking, “What is the best way to buy bitcoin for me?”, you might also want to take a look at apps like Cash App and PayPal. Both of these allow users to buy bitcoin directly within the app, making them increasingly popular options.
Many users also opt for P2P platforms and DEXes to acquire bitcoin (often through purchasing or swapping tokens for BTC). As the name suggests, a P2P platform and DEXs let users deal directly with one another. Today, even some centralized exchanges offer P2P options for users.
Some P2P platforms and DEXs where you can buy crypto include:
Of course, it’s important to check what options are available to you depending on your region.
How to Buy Bitcoin With a Credit Card
Over the years, more exchanges and platforms have appeared that let users buy Bitcoin with a credit card. An example of this is MoonPay, which allows users to buy bitcoins using their credit or debit card. Bigger exchanges like Coinbase and Binance have also given users the option to purchase tokens using their credit cards as well.
Additionally, Bitcoin ATMs still exist. If you want to buy Bitcoin with your credit or debit card, it might also be worth searching for a Bitcoin ATM in your area.
Alternative ways to buy bitcoin
Speaking of MoonPay, certain platforms also let you buy bitcoins using other payment methods like Venmo and even Apple or Google Pay. But depending on where you live, options may vary.
You always want to double check that the payment option you prefer is available in your geographic locale and that there are no restrictions that could block you from making your purchase.
How to Buy Bitcoin With Leather
Leather users can see which payment options are available to them by clicking the “Buy” button on your Leather home screen.
Select “Bitcoin,” and you’ll be taken to a screen where you can pick the exchange or platform that you want to buy bitcoin from. The options labeled “Fast Checkout” are the ones that let you use your credit or debit card to purchase tokens.
From there, click on the exchange or platform of your choice and you’ll be redirected to their site. Follow the instructions for creating an account (note that you’ll often need to go through KYC practices) and once you’ve made your Bitcoin purchase, you’ll be able to transfer your newly bought BTC to your Leather wallet.
And as we mentioned, you can also connect to DEXes and peer-to-peer platforms with your Leather wallet. Once you’ve followed the steps to connect your Leather wallet to the DEX or P2P platform, you’ll be able to acquire bitcoin, which should show up in your wallet upon completing the transaction.
Why do I need to verify my identity to purchase Bitcoin?
Exchanges ask you to verify your identity and complete KYC practices for a number of reasons:
Customer protection: Exchanges are trying to protect users from scams and fraud by ensuring that only verified users can buy, sell, or swap bitcoin on their platforms.
Compliance with regional laws: Different countries have their own laws that focus on crypto usage and exchange activity.
Cut down on bad practices and illegal activity: Enforcing identity verification and KYC measures can also often reduce the risk of illegal activities being conducted on the platform.
Of course, DEXs and P2P platforms generally preserve users’ anonymity and don’t follow KYC practices. If this is the case and you’re using a DEX or P2P platform to buy bitcoin, it’s important to remember that you are the sole custodian of your funds.
Additionally, it is still possible to purchase bitcoin on some exchanges without undergoing a full identity verification process. However, there usually is a limit on how much BTC you can buy in these cases.
Fees for buying bitcoin
As we mentioned, there are fees associated with buying BTC. Depending on which method you choose, you could run into:
Exchange fees: Most exchanges normally charge a fee for buying bitcoin on their platform.
Credit/debit card fees: While convenient, buying BTC using a credit or debit card does normally incur a higher fee (usually about 2% to 4%).
Network fees: You’ll need to pay network fees for Bitcoin transactions. These can be lower or higher depending on network congestion at the time.
Service fees: Apps like Cash App or Paypal may also charge you service fees for using their app to buy BTC depending on which features you use.
Conversion fees: If the currency you’re using to buy bitcoins is different from the base currency used on the exchange, you may also need to pay conversion fees to complete your purchase.
Selling Bitcoin
Generally speaking, the same exchanges and platforms that allow you to buy bitcoin will also allow you to sell bitcoin. Just make sure you follow the steps listed on the appropriate platform, and that the option to sell your BTC is also available in your region.