The constant rise of cryptocurrency prices to new records continues to attract many beginners keen to find out how to buy bitcoin and other digital assets. Once upon a time, the only way you could obtain BTC was by mining it on the blockchain, which to this day still requires a degree of technical know-how and hardware knowledge that eludes many of us.
Thankfully, it is now very simple for newbies to purchase bitcoin, the world’s most valuable cryptocurrency. That’s especially relevant for time-sensitive customers of Cloudbet, who may need bitcoin in a hurry to capitalize on favorable odds, or to place wagers while Lady Luck is smiling favorably upon them.
This article will focus on how to buy bitcoin with your fiat currency (USD, Euro, etc.) so that you can start betting in no time. For beginners, it only takes two steps:
- Setting up a wallet: Don’t worry, we’ll explain everything.
- Choose an exchange: This will depend on the availability in your country and your general preferences regarding anonymity, price, speed, and security.
Let’s dig into each of these steps.
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How to choose a bitcoin wallet
Choosing and setting up your bitcoin wallet of choice is the first step to getting your coins. Much like your bank account, a wallet is necessary to receive or send funds across the bitcoin blockchain. Much like your bank account, they come in many flavors, depending on your needs.
For bitcoin beginners, we recommend Copay – a free, open-source wallet that holds both bitcoin and bitcoin cash, with the bonus of allowing you to sync the same account throughout all major platforms. Windows, Mac, Linux, iOS, and Android are all supported. Among other popular wallets are those available from Exodus, MetaMask, and Coinbase.
Just download the software to your preferred platform (desktop and/or mobile) and follow the installation instructions. Make sure you create a strong password, perform a backup, and most importantly, follow the recovery guidelines carefully, especially regarding your private keys.
All bitcoin wallets have private keys, which are exchanged in a transaction between buyer and seller to complete a transaction on the bitcoin blockchain. It is vitally important that you protect these keys: Without them, you lose the ability to transact, and, more importantly, you won’t be able to recover your funds. Some bitcoin holders store their private keys in a bank safety deposit box.
Even if some online services boast their own web wallets, it’s good practice to always keep your funds in a wallet for which you control the private keys, preferably not online, to mitigate the risk of losing your money to a hack or bug in the third party’s servers.
After getting acquainted with your new wallet, it’s time to move onto buying your bitcoin.
How to choose a bitcoin exchange
Choosing the best exchange to buy bitcoin depends in part on the country that you live in and the legal status in your jurisdiction. Crypto regulation differs from region to region, so some exchanges may be unable (or unwilling) to offer their services in certain countries.
Cryptocurrency exchanges are the most common way to buy bitcoin. They work as an intermediary between buyers and sellers, taking commissions for the service. You may already be familiar with betting exchanges, which function similarly by bringing together a backer (someone wanting to bet) and a layer (someone wanting to take a bet).
With many options available, it can be overwhelming for beginners to pick the best bitcoin exchange. You should choose an exchange that:
- Supports your local currency and payment methods. Top-tier exchanges like Coinbase and Crypto.com allow you to use a credit card, debit card, or bank transfer to deposit funds. (See below for why payment methods matter)
- Complies with regulations in your jurisdiction.
- Has robust security practices.
- Charges a reasonable level of fees on deposits and transactions.
- Has high trading volumes, which are vital to ensure you get the best bitcoin price.
- Supports a large number of coins for you to trade.
Typically, these factors shouldn’t be a worry if you go with one of the bigger exchanges. Take note that buying through a regulated exchange is not anonymous, as you must submit documents and go through a verification process (KYC) to fund your account.
Once you have completed and funded the account with your fiat currency, you simply have to look for bitcoin among the range of assets available for trade and place your order.
What are the other ways to buy bitcoin?
As you get more experienced with buying and selling bitcoin, you may start to explore more adventurous, more private, and possibly more low-cost ways to obtain your BTC.
The main places you can buy are directly from Cloudbet via a credit/debit card, exchanges, dedicated OTC (over-the-counter) marketplaces, P2P (peer-to-peer), and ATMs. Options vary greatly according to your preferences so, apart from availability, you might want to consider user-friendliness, payment methods, costs/fees, security, and anonymity.
Buying direct from Cloudbet
This is by far the easiest option if you are a customer. You can purchase bitcoin through the Cloudbet site, where you will be directed to set up an account with a third-party payment provider. The providers will usually require identity verification before you can begin buying your bitcoin with a credit or debit card.
OTC (over-the-counter) marketplaces
An OTC will put you directly in touch with sellers offering their coins. Once you take an offer, the coins will be held in escrow until you submit proof of your payment. The seller will then proceed to release your bitcoins to your wallet.
P2P transactions
Peer-to-peer (P2P) bitcoin marketplaces like Paxful and LocalBitcoins allow you to buy bitcoin directly from other users without a traditional exchange acting as a middleman. Sellers advertise buy offers specifying their desired payment method, while buyers browse listings to find a suitable seller with their preferred payment option and exchange rate. After agreeing on terms, buyers send a payment to the seller who releases the bitcoin from escrow. P2P removes signup and ID verification steps, providing an easy way to buy bitcoin anonymously. However, there is an increased risk of scams.
Bitcoin ATMs
If you can find them, ATMs are an easy, convenient, and potentially private way of buying bitcoin. On the flip side, they usually charge high fees. You can check here if there is one close to you.
What bitcoin payment method to use
After checking your available options, you’ll need to take into account the accepted payment methods for each method to buy bitcoin. Different payment types have different implications for security, anonymity, price, and transaction time. As a rule of thumb, the more anonymous your choice is, the higher the price and the uncertainty level you’ll get.
Let’s take a look at the options.
Bank transfers
Favored by most exchanges, bank transfers are an easy and secure way to have your money turned into bitcoin. You can also pay by bank transfers in OTC marketplaces (straight into the seller’s account) and P2P direct transactions. Being traceable, bank transfers are unsurprisingly not anonymous.
When transferring to an exchange, the transaction may take anywhere from a few minutes to over a week (for international wire transfers). Fees are not always transparent and tend to add up, so it’s better to check with your bank before sending any money abroad.
✅ Pros: Easy to use, secure
❌ Cons: Can be slow, not anonymous, can be expensive
Verdict: Use this if privacy isn’t a problem and you don’t mind waiting a bit.
Credit/debit card
Cards are an easy, quick, and secure way to pay for your bitcoin, though they aren’t as widely accepted as good old bank transfers. This convenience comes at a cost, of course: Venues that do take them usually add a considerable commission to the final price tag. Adding insult to injury, some credit card issuers will consider these transactions to be a cash advance, incurring even higher fees. Yes, they can be really expensive. Also, limits are usually very low, so if you’re looking for larger amounts, this is probably not your best choice.
You can use your card in most exchanges, with some vendors on OTC marketplaces, and in some ATMs.
✅ Pros: Easy to use, Secure, Fast
❌ Cons: High fees, not anonymous, fewer choices, and low limits
Verdict: use this if privacy and price aren’t a problem and you’re buying small amounts.
PayPal, Neteller, and other online payment platforms
While some exchanges may accept the odd digital payment platform as a funding option, these are not widespread. PayPal is mostly restricted to OTC marketplaces or P2P, due to risks of scams from its chargeback policy plus the irreversibility of BTC transactions.
Since using it is adding another intermediary, they often cost more than a simple bank transfer. Depending on how the banking system of your country works, this may mean fewer sellers are willing to use digital systems, although this may not be true for places where banks are more hostile towards bitcoin.
✅ Pros: Easy to use, fast, secure (for buyer)
❌ Cons: Expensive, few options, uncertainty (for seller)
Verdict: Better off using traditional bank transfers, unless that is not an option.
Cash/gift cards
One of the appeals of bitcoin is that, much like cash, it can allow for a high degree of privacy. However, that depends on following some best practices and avoiding associating your physical identity with your newly acquired bitcoin, and the first bottleneck is your entry point.
If you would like to keep your purchase anonymous, then you should choose an anonymous entry point: Either cash or gift cards. Bear in mind that this choice will impose a big restriction on your market options, and also incur substantially inflated prices.
Regulated services like exchanges or brokers have to comply with anti-money laundering laws, so don’t expect them to take either. Bitcoin ATMs do take cash, though many also require some form of identification, and as bitcoin continues to go mainstream, this trend is likely to continue.
That leaves us with OTC marketplaces, such as Localbitcoins, and P2P Direct. Cash can either be sent (by mail or bank deposit) or exchanged in person. If sent, cash confirmation may take a couple of days, so don’t expect fast transactions.
If you decide to go for an in-person transaction, please be aware that it can be a risky deal, especially if you have never met your seller before.
✅ Pros: Highly anonymous
❌ Cons: Expensive, fewer choices, can be unsafe
Verdict: Use it if you value anonymity and don’t mind paying more for it; be careful if meeting strangers in real life.
How to store bitcoin securely
Learning how to buy bitcoin is just the first step. You must also learn how to store your bitcoin securely with your crypto wallets. It’s important to understand how cryptocurrency wallets are categorized, as hot, warm, or cold based on their level of internet connectivity.
- Hot wallets are always connected online, providing easy access to your funds at the cost of increased hacking risk.
- Warm wallets strike a balance between hot and cold, storing some information offline while maintaining online accessibility.
- Cold wallets store all data offline on hardware or paper, disconnected from the internet. This provides the highest security but lacks convenience. Hardware wallets like Ledger and Trezor are cold wallets. Paper wallets with keys printed out also qualify as cold storage.
For beginners, a good approach is using a hot wallet paired with a cold wallet. Keep a small spending amount in the hot wallet on your mobile device or computer for daily transactions. Large holdings should be kept in cold storage via a hardware wallet for maximum security.
Additionally:
- Enable two-factor authentication on accounts and use strong unique passwords to improve hot wallet security.
- Set email/SMS transaction alerts and frequently back up your wallet data including recovery phrase/private keys.
- Store backups securely offline in multiple locations to prevent loss. Consider a safety deposit box for irreplaceable cold storage seeds or paper wallets.
In summary, proper wallet security boils down to minimizing online exposure. Limit funds held in hot wallets or exchanges where keys are stored online and vulnerable to hacking. Transition larger amounts to cold hardware or paper wallets held offline without internet access.
Following sound security practices are essential for protecting your investment as you learn how to buy bitcoin and get started in the world of crypto.
When is the best time to buy bitcoin?
With bitcoin’s price being historically volatile, a common question from beginners learning how to buy bitcoin is when is the best time to make a purchase.
Unfortunately, there is no definitive answer, as bitcoin can see swift price swings at any moment. However, some strategies may increase your odds of buying at an advantageous time.
(Please note: The following must not be interpreted as financial advice. Conduct your own price research before making your decision to purchase bitcoin.)
One approach is to Dollar Cost Average (DCA), which involves buying at regular intervals over an extended period. This prevents you from having to predict price movements and minimizes risk from poorly timed purchases. For example, investing $100 in bitcoin every week means you’ll buy more when the price is down and less when it’s up.
You can also target major price dips during corrections to acquire bitcoin at a relative discount. Use technical analysis tools to identify support levels and determine ideal entry points. Set limit buy orders on exchanges to execute trades automatically if certain price thresholds are reached.
With some prudence and patience, you can confidently learn how to buy bitcoin and add it to your portfolio without needing to obsess over finding the perfect dip or top.
5 common mistakes to avoid when buying bitcoin
Learning how to purchase bitcoin for the first time can be confusing and it’s easy for beginners to make mistakes that cost them money or security. Avoid these 5 common bitcoin buying mistakes:
- Using a scam exchange: With bitcoin’s rise in value, scam exchanges have proliferated to take advantage of unsuspecting buyers. Research any crypto exchange thoroughly before signing up. Check for valid contact information, regulatory compliance, positive user reviews, and high trading volumes indicating adequate liquidity. Using an obscure exchange with low volume can result in delayed withdrawals and poor bitcoin rates.
- Not enabling 2FA: Two-factor authentication adds an extra layer of account security beyond passwords which can be guessed. Exchanges like Coinbase support 2FA via SMS, authentication apps, or security keys. Enable 2FA to prevent your account from being hacked and bitcoin stolen if your login credentials are compromised.
- Leaving bitcoin on exchanges: While convenient for trading, some cryptocurrency exchanges are prone to hacking, theft, and bankruptcy, especially smaller venues. Once you buy bitcoin, withdraw it to your personal wallet for security. Utilize offline “cold” hardware wallets for large holdings. Only keep spending amounts on “hot” online wallet apps.
- Losing access to wallets: Losing your private keys or recovery phrase could mean losing access to your bitcoin forever. Safely back up wallet credentials and store them geographically apart to prevent loss. Memorize or securely store backup keys/phrases to restore access.
- Ignoring tax requirements: In many jurisdictions, bitcoin is considered taxable property. Not reporting profits can lead to penalties. Keep records of buy/sell transactions and cost basis to calculate capital gains/losses for tax reporting. Use crypto-specialized tax software to simplify the process.
Avoiding common mistakes takes research and caution. Following best practices when buying, securing, and monitoring your bitcoin will help maximize returns and minimize headaches.
That’s it!
Congratulations, you now have all the tools to become a proud owner of bitcoin.
If your coins were sent to a web wallet on a third-party service, make sure you withdraw them to the wallet you set up. Now you can simply hold onto them (crypto is a great store of value), trade it for another cryptocurrency, or spend it on goods and services.
Alternatively, you could open a Cloudbet account and start betting on a huge range of sports markets or playing in our exciting bitcoin casino, where your initial investment could turn into something much greater.
