Invest In Bitcoin – How To Invest In Bitcoin For Beginners

If you’re thinking about investing in Bitcoin for the first time – you’ll be pleased to know that the process has never been easier. It’s now just a case of registering an account with a reputable cryptocurrency broker, depositing some funds with a debit/credit card or e-wallet, and then deciding how much you wish to invest.

In this beginner’s guide, we show you how to invest in Bitcoin in under five minutes with a regulated and low-cost broker!

#1 Broker to Invest in Bitcoin – eToro

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

How To Invest in Bitcoin – Choose a Broker

One of the most important steps to consider when learning how to invest in Bitcoin is your choice of an online broker. Below you will find a quick overview of the best Bitcoin investment brokers operating in this space.

  • eToro – Overall Place to Invest in Bitcoin
  • Coinbase – Best Way to Invest in Bitcoin for Beginners
  • Binance – Best Place to Invest in Bitcoin for Asset Diversity

We review the above Bitcoin investment brokers in great detail further down in this guide.

How to Invest in Bitcoin – A Quick Guide For 2021

Before reading our guide in full – check out the quickfire steps below. These simple four steps will show you how to invest in Bitcoin in under five minutes with eToro – a regulated and low-cost brokerage site!

  • Step 1: Open an Account with eToroYou can open an account with eToro with ease. All you need to do is provide some basic personal information – such as your name and home address. You’ll also need to provide your email address and mobile number.
  • Step 2: Upload Your ID – eToro is registered with FINRA and the SEC – so all new account holders must upload a copy of their ID. This can be a passport, driver’s license, or any other government-issued ID that you might possess. The document will be verified instantly.
  • Step 3: Deposit Funds – Now you can make a deposit into your eToro account. The minimum at eToro is just $50 for US residents and there are no deposit fees on USD payment methods. You can choose from a debit/credit card, Paypal, Neteller, or bank transfer.
  • Step 4: Invest in Bitcoin – Now that you have funds in your eToro account – you can search for ‘BTC’ and click on the ‘Trade’ button to populate an order box. Finally, enter your investment stake ($25 minimum) and click ‘Open Trade’ to complete your Bitcoin investment!

By completing the above steps at eToro – you’ve just bought Bitcoin on a spread-only basis. There is nothing else for you to do, as eToro will store your BTC tokens on your behalf. This means that when you eventually decide to sell – you can do this instantly without needing to transfer the tokens from an external wallet!

Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.

1. eToro – Overall Best Place to Invest in Bitcoin

bitcoin today

eToro is a clear winner when it comes to the best place to invest in Bitcoin. This super-popular Bitcoin brokerage site was first launched in 2007 and now serves a huge 20 million investors. There are several key reasons why eToro continues to lead the way in this industry. First and foremost, eToro arguably holds the strongest regulatory framework of all the cryptocurrency brokers that we came across.

Not only is the broker regulated by the FCA (UK), ASIC (Australia), and CySEC (Cyprus) – but it is registered and approved by the SEC and FINRA in the US. This ensures that you can invest in Bitcoin safely and without fear of being scammed. We also found that eToro is popular with investors in the US as it offers extremely low fees. As we cover shortly – the likes of Coinbase charge 3.99% on debit card purchases. But, at eToro, US citizens depositing in US dollars can fund their accounts on a fee-free basis.

etoro crypto

When it comes to trading commissions, eToro operates on a spread-only basis. This starts at just 0.75% in the case of Bitcoin – which again, is very competitive. What we also like about eToro is that the brokerage site is suitable for newbies and experienced investors alike. For example, you only need to meet a minimum deposit of $50 and a stake of just $25 on each Bitcoin investment. This is not only ideal for those on a budget, but this super-low minimum allows you to dollar-cost average your crypto purchases.

In terms of supported markets, eToro offers a sizable number of leading digital tokens. In addition to Bitcoin, this covers everything from EOS, Ethereum, and Cardano to XRP, Litecoin, and Dogecoin. eToro is also adding a number of decentralized finance (DeFi) coins to its ever-growing list of supported assets – which currently includes the likes of AAVE, Enjin, Decentraland, and Yearn.Finance. Much like Bitcoin, these alternative crypto assets also come with low minimums and competitive spreads.

etoro crypto

But perhaps the most appealing feature of the eToro platform is its Copy Trading tool. In a nutshell, this is an innovative feature that allows you to copy an expert cryptocurrency investor. For instance, if your chosen trader allocates 20% of their capital into a Cardano and EOS buy order, you will automatically do the same. You can also engage with other investors at eToro through the platform’s Social Trading tools. This includes the ability to ‘like’ and reply to comments – much like you would on Facebook.

Pros

  • Invest in cryptocurrencies on a spread-only basis
  • Minimum investment per trade from just $25
  • Supports debit/credit cards, e-wallets, and local bank transfers
  • Registered with FINRA/SEC and regulated by the FCA, CySEC, and ASIC
  • Minimum deposit of $50 and no transaction fees for US citizens
  • Used by over 20 million people
  • Perfect for beginners
  • Social and copy trading tools

Cons

  • Perhaps too basic for technical traders
  • No support for MT4 or MT5

Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.

2. Coinbase – Best Way to Invest in Bitcoin for Beginners

Buy MANA at Coinbase

Even if you are completely new to the world of Bitcoin and blockchain technology – there is every chance you have heard of Coinbase. This is because the platform is not only home to over 56 million clients, but it is now a tradable stock. In fact, you’ll find Coinbase listed on the NASDAQ exchange with a multi-billion dollar valuation – which shows just how far the cryptocurrency broker has come since it was first launched in 2012.

In terms of what you get when choosing Coinbase as your go-to Bitcoin investment site – this largely centers around security and convenience. Regarding the latter, Coinbase accounts can be opened in a matter of minutes. Once you’ve gone through a quick KYC process, you can then use your debit card to invest in Bitcoin instantly. Other instantly-processed payment methods available to US customers include Paypal and Apple Pay. ACH is supported, but expect to wait 1-3 working days for the funds to arrive.

coinbase review

Nevertheless, although you have the ability to invest in Bitcoin easily and quickly – Coinbase is super-expensive when it comes to commissions. In fact, by taking advantage of the instant buy feature with your debit card – you will pay 3.99% of the transaction amount. As such, that’s almost $40 for every $1,000 invested. This is, of course, significantly more than eToro – which allows US customers to deposit funds on a fee-free basis. On the other hand, Coinbase does allow you to deposit funds with ACH for free.

But, you will still need to pay a standard commission of 1.49% on your Bitcoin investment. This commission is yet again applied when you get around to cashing out. If this fee structure doesn’t put you off, you will enjoy a super-secure and safe experience when using Coinbase. The exchange notes that 98% of client funds are held in cold storage – so it’s virtually impossible for external hacking attempts to succeed. Plus, you’ll need to set up two-factor authentication (2FA) – which is another crucial safety net in keeping your funds safe.

Pros

  • One of the most popular cryptocurrency exchanges
  • More than 56 million users
  • Supports instant debit card purchases
  • Dozens of digital currencies to choose from
  • Institutional-grade security practices

Cons

  • Debit card deposits are expensive at 3.99%
  • You will pay a standard trading commission of 1.49%

at eToro, #1 Broker in the US

Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.

3. Binance – Best Place to Invest in Bitcoin for Asset Diversity

Binance is another popular online exchange that has an ever-growing customer base in the US. Globally, the exchange facilitates billions of dollars in daily trading volume and is home to over 100 million client accounts. Perhaps the main two benefits of choosing Binance to invest in Bitcoin are its huge list of supported cryptocurrencies and its low fee structure.

Starting with the former, Binance offers hundreds of digital tokens in addition to Bitcoin. This covers everything from top-10 cryptocurrencies to small-cap DeFi coins. This is great for those of you that are looking to enter the Bitcoin marketplace in a more diversified manner. That is to say, Binance is a great option should you wish to invest in a full range of crypto assets. In terms of fees, this will depend on how you intend on funding your Bitcoin investment. For instance, if you want to use a US debit or credit card to invest in Bitcoin, you will pay an instant buy fee of 0.5%.

binance review

This works out at $5 for every $1,000 invested. On the other hand, if you want to invest in Bitcoin by paying with an alternative asset – such as Ethereum or XRP, the commission on this trade would amount to just 0.10%. This commission can be reduced by 25% should you hold BNB tokens in your account – which is the crypto asset native to Binance. When it comes to storing your Bitcoin investment – Binance offers two options. For the beginners in the room, you might consider leaving your tokens stored on the main Binance website. Security controls offered by Binance include 2FA, IP and device whitelisting, and its SAFU (Safe Asset Fund for Users).

The latter is a reserve pot that has been put in place to cover clients in the event of an external hack. The other storage option you have is to download the Trust Wallet. This is a mobile wallet backed by Binance that is available on both iOS and Android devices. Unlike the previously discussed web wallet, Trust gives you full control over your private keys. This ensures that you, and only you, have access to your Bitcoin investment. Finally, Binance also offers a savings account that allows you to earn interest on your ideal digital tokens.

Pros

  • Facilitates billions of dollars in daily trading volume
  • Supports hundreds of digital asset pairs
  • Near-instant deposits via debit/credit card
  • Trading commission starts at just 0.1% per slide
  • Offers crypto savings accounts
  • Ideal for both beginners and experienced traders alike

Cons

  • Not all supported cryptocurrencies can be purchased with a debit/credit card
  • No e-wallet deposits or withdrawals

at eToro, #1 Broker in the US

Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.

How to Invest in Bitcoin in the US – Detailed & Explained in Full

The quickfire guide that we presented earlier explained that it’s possible to invest in Bitcoin in under five minutes when using eToro. However, if this is your first time using an online Bitcoin investment broker – you might need a more detailed walkthrough.

If this is the case, below you will find an in-depth tutorial on how to invest in Bitcoin in the US in a safe and low-cost manner.

Step 1: Open a Bitcoin Investment Account

The first step at eToro – as is the case with all legitimate Bitcoin investment brokers offering a service to US clients, is to register an account. End-to-end, this should not take you more than a couple of minutes. You will initially be asked to enter some personal details – which is inclusive of your first and last name, home address, and data of birth.

how to join etoro

You’ll also need to enter your social security number, email address, and cell phone number. After confirming your phone number via an SMS code, your eToro account is open!

Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.

Step 2: Upload ID

Another core requirement implemented at regulated brokers like eToro is a KYC (Know Your Customer)n process. In a nutshell, this requires you to upload a copy of your government-issued ID – so that eToro can verify your identity. You will also need to upload a document that verifies your US residency.

This can simply be a utility bill or bank statement. Other documents are accepted – so check out the list to find one that is most suitable for you. Once you upload the aforementioned documents, eToro will verify them in less than 1-2 minutes.

Step 3: Deposit Funds

Deposit Funds

Once the automated verification is complete, eToro will then ask you to make a deposit. As we noted earlier in our eToro review, the broker requires a minimum deposit of just $50 for US clients. Furthermore, and perhaps most importantly, US clients benefit from 0% deposit fees. This is a huge saving when you consider that Coinbase charges 3.99% on Visa and MasterCard deposits!

In terms of supported payment types, eToro supports the following:

  • Debit Cards
  • Credit Cards
  • Paypal
  • Skrill
  • Bank Transfer

Your deposit will be added to your eToro account instantly – unless you are opting for a bank wire (1-3 days).

Step 4: Search for Bitcoin

You will find dozens of digital currencies on the eToro website, so the easiest way to find Bitcoin is to search for ‘BTC’. When you see the correct market load (like in the image below) – click it. Next, click on the ‘Trade’ button.

how to invest in bitcoin UK

This will populate an order form – which you will need to fill in to complete your Bitcoin investment.

Step 5: Invest in Bitcoin

As noted above, the final step is to complete an order form. At eToro – this only requires one piece of information from you – your total stake. This only needs to meet a $25 minimum and you can enter your desired stake into the ‘Amount’ box.

how to buy bitcoin

Finally, by clicking the ‘Open Trade’ button – eToro will instantly execute your Bitcoin investment. At any given time, you can head over to the ‘Portfolio’ section of your account to see how your investment is performing. Your portfolio is also where you will need to go when you eventually get around to cashing out your Bitcoin investment.

How to Sell Bitcoin in the US

It goes without saying that your primary goal of investing in Bitcoin is, of course, to make a profit. In a similar to way to buying traditional stocks, the only way that you can do this is if the value of Bitcoin increases in the open marketplace. If it does, and you want to cash out, you can do this by selling your Bitcoin tokens back to cash.

  • Now, the process involved will ultimately depend on where you purchased Bitcoin and how the tokens are currently being stored.
  • For example, if you used a third-party exchange and withdrew the Bitcoin out to a private wallet, then you will need to transfer the digital asset back to a broker that allows you to sell for fiat money.

On the other hand, if you followed our detailed tutorial and opted for eToro, the tokens remain on the platform at all times. This means that at any given time, you can access your Bitcoin investment via your portfolio and create a sell order. As soon as you confirm the sale, eToro will exchange your Bitcoin back to US dollar. Then, it’s just a case of requesting a withdrawal back to your bank account or debit/credit card!

Ways to Invest in Bitcoin

The next thing to think about is the many ways to invest in Bitcoin. The specific method that you opt for will ultimately depend on your personal circumstances and preferred payment type.

To point you in the right direction, below we discuss the main ways to invest in Bitcoin in the US.

Regulated Broker

The easiest, cheapest, and most secure way of investing in Bitcoin is to use an online broker. With that said, the broker must be regulated by at least one reputable body and thus – have the legal remit to accept US clients. This will ensure that your Bitcoin investment is safe and secure at all times.

This is why we like eToro, as the platform is approved by FINRA and the SEC, and also holds regulatory licenses with bodies in the UK, Australia, and Cyprus. By using a regulated broker to invest in Bitcoin, you don’t need to leave the comfort of your home.

As such, you will be able to pay for your Bitcoin investment with a number of convenient payment methods – with the likes of eToro accepting Paypal, debit cards, credit cards, and local bank transfers. You will also find that a number of regulated brokers in this space offer industry-leading fees. Once again, eToro permits 0% commission deposits and spreads of just 0.75%.

Bitcoin ATM

If you prefer dealing in cold-hard dollars – then you might consider a Bitcoin ATM. Put simply, these are ATMs that allow you to insert cash and in return – you will receive Bitcoin.

  • As Bitcoin is a digital currency, you won’t, of course, receive your tokens in tangible form.
  • On the contrary, most Bitcoin ATMs require you to scan your mobile wallet address.
  • Then, once the transaction is complete, the Bitcoin tokens will be transferred over to your wallet.
  • Some Bitcoin ATMs will instead print a receipt that contains details of how to claim your tokens manually.

Either way, the key issue with Bitcoin ATMs in the US is that they charge extortionate fees. Some of the providers that we came across charge as much as 15-20% of the transaction amount – which is huge. This is why we much prefer regulated brokers like eToro – which are not only more convenient and cost-effective, but better suited for beginners.

Bitcoin Stocks

There isn’t such a thing as Bitcoin stocks. You do, however, have the chance to invest in Bitcoin-related stocks such as Coinbase. As we briefly mentioned in our Coinbase review, this popular cryptocurrency exchange is now listed on the NASDAQ exchange.

This means that by opening an account with a US-based stockbroker, you can indirectly invest in Bitcoin and other cryptocurrencies – simply by purchasing some Coinbase shares. Crucially, this is because there is a direct correlation between the stock price of Coinbase and the wide value of the currency market.

After all, Coinbase specializes exclusively in cryptocurrency brokerage services – so it makes sense that the company performs better when the health of the marketplace is strong.

Cryptoassets are highly volatile unregulated investment products. Proceed at your own risk.

Should I Invest in Bitcoin?

If you’re yet to invest in Bitcoin because you are uncertain whether it’s the right asset class for your portfolio – it’s important to take a step back. That is to say, like all investment-related decisions, you should perform lots of research before proceeding.

This doesn’t have to be anything overly complex like technical analysis of charting research. On the contrary, you simply need to look at the risks and potential rewards of Bitcoin to help you make an informed decision.

how to invest in bitcoin

Below you will find some notable points that our research team found when considering the benefits of investing in Bitcoin.

New and Exiting Asset Class

Sure, Bitcoin has been around since 2009. But, in comparison to traditional assets like stocks or bonds – this is nothing. In fact, Bitcoin is still well within its early growth stage, so by entering the marketplace now – this will allow you to invest before the digital currency really takes off.

Huge Returns to Date

Had you invested in Bitcoin not long after the blockchain project launched in 2009 – you would have paid less than a cent. Since then, the digital currency has grown by a significant amount. In fact, Bitcoin hit a new all-time high in May 2021 at just under $64,000. When you consider that the digital asset was worth around $5,000 in March 2020 – this translates into gains of over 1,100% in just over a year of trading.

Buy Small Amounts

On the one hand, buying a full Bitcoin will now set you back tens of thousands of dollars. But, the fact that cryptocurrencies can be split into tiny fractions means that you only need to invest a few dollars to enter the market. In the case of eToro, for example, you can invest in Bitcoin from just $25 per trade.

invest in bitcoin

This means that if Bitcoin was valued at $25,000 – the minimum investment would see you own 1% of a single token. This is ideal from a risk-management perspective, as Bitcoin is highly volatile.

Trading Below All-Time High

The value of Bitcoin changes on a second-by-second basis – like most tradable instruments. With that said, as of Q3 2021, Bitcoin is still trading below its previous all-time high of $64,000. At the time of writing, this stands at around the $49-50,000 level. So, if you entered the market at this price – you are essentially getting a discount of 22% based on its prior peak.

What are the Risks of Investing in Bitcoin?

In the sections above, we discussed the many benefits of investing in Bitcoin for the first time. With that said, you also need to consider the risks before proceeding. This will ensure that you make an informed decision before you part with any money.

  • Unproven: In the grand scheme of things, Bitcoin as an asset class is still relatively unproven. By this, we mean that it remains to be seen what role Bitcoin will play in the future of money. Furthermore, Bitcoin regulation is still in its infancy, so this is another metric that needs to be considered before investing.
  • Volatile: Bitcoin is a very volatile financial instrument that will often increase or decrease by 5-10% per day. When things are going in your favor, this increased volatility can be highly rewarding. However, when market sentiment is bearish and the value of Bitcoin subsequently suffers, this can result in rapid losses. As such, if you’re unable to handle the volatility levels of digital currencies, Bitcoin might not be right for your portfolio.
  • Cybercrime: Bitcoin and other cryptocurrencies are favored by cybercriminals due to the anonymous characteristics that the digital asset arena offers. In particular, this includes regular hacking attempts of cryptocurrency exchanges and wallets. Although these risks cannot be eliminated entirely, this is why we strongly suggest that you only invest in Bitcoin via a regulated broker.

In considering the above risks before investing in Bitcoin, this will ensure that you enter this marketplace with your eyes wide open.

How Much Does it Cost to Invest in Bitcoin?

Just like when you buy traditional assets such as stocks or bonds, you will need to pay fees to invest in Bitcoin. The specific fees are entirely dependent on your chosen Bitcoin broker.

For example:

  • Deposit Fees: You will usually need to pay a deposit fee when you fund your Bitcoin brokerage account. For example, you will pay 3.99% to invest in Bitcoin with your Visa or MasterCard at Binance. You can find brokers that offer much lower fees in this department, though. This includes eToro – which allows US citizens to deposit funds fee-free.
  • Spreads: The spread is essentially a mark-up that the broker implements on the buy and sell price of Bitcoin. For example, if the buy and sell price is $45,000 and $46,000 respectively, the spread in this instance amounts to $1,000. In simple terms, this means that you will need to make gains of $1,000 to break even on your Bitcoin investment.
  • Commissions: You then have the trading commission, which is charged every time you invest in Bitcoin and again when you cash out. At Coinbase, this amounts to 1.49%. eToro doesn’t charge trading commissions. Instead, the broker charges a competitive spread of just 0.75%.

How to Buy Invest in Bitcoin – Conclusion

If you’ve read our guide from start to finish – you should now know just how easy it is to invest in Bitcoin in the US. In fact, as our step-by-step tutorial explained, the end-to-end process should take no more than five minutes. However, you do need to do a bit of research before getting started, especially when it comes to choosing the right broker.

All in all, we found that eToro offers the best Bitcoin investment service to US clients. Not only can you deposit funds for free with a debit/credit card, Paypal, or bank transfer – but the minimum investment is just $25 per trade. Furthermore, eToro is registered with and approved by FINRA and SEC – you can be sure you are using a top-rated brokerage that does everything by the book.

1
$50Exclusive promotion
Our score10
  • Invest in a wide range of cryptocurrencies
  • Ability to copy more experienced investors and their decisions
  • eToro crypto wallet included which makes it beginner-friendly
0% Commissionstart TradingOur score 10

FAQs

How to invest in Bitcoin in the US?

Where to invest in Bitcoin

Should I buy Bitcoin?

How do you safely invest in Bitcoin in the US?

How do you cash out Bitcoin in the US?

About Kane Pepi PRO INVESTOR

Kane Pepi writes for several high profile publications such as InsideBitcoins, the Motely Fool, and Learnbonds. Based in Malta, Kane is extremely skilled at complex subjects related to financial matters - including a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and actively engaged in Doctorate Degree research, for the money laundering threats of the blockchain economy.