Invest In Cryptocurrency – How To Invest In Cryptocurrency For Beginners

Cryptocurrencies are a hot topic these days – with digital assets like Bitcoin and Ethereum generating sizable returns over the past few years. With that said, there are now over 11,0000 cryptocurrency tokens in existence – all of which can be bought, sold, and traded online.

If you’re completely new to the world of digital assets – this beginner’s guide on how to invest in cryptocurrency in the US is a must-read. Not only will we explain the fundamentals of how to invest – but also which cryptocurrency brokers allow you to do this in a safe and low-cost manner.

Invest in Cryptocurrency – #1 Broker eToro

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  • 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
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How To Invest in Cryptocurrency – Choose a Broker

The only way to invest in cryptocurrency in the US is to use an online broker. Your chosen broker should offer a safe and secure method to invest in digital currencies in a low-cost manner. Below you will find an overview of the best brokers that allow you to invest in cryptocurrency in the US.

  • eToro – Overall Place to Invest in Cryptocurrency in the US
  • Coinbase – Great Way to Invest in Cryptocurrency for Beginners
  • Binance – Best Place to Invest in Cryptocurrency for Asset Diversity
  • Robinhood – Invest in Cryptocurrency via a Regulated Mobile App
  • Webull – Invest in Cryptocurrency From Just $1

We review the above crypto brokers further down in this guide.

How to Invest in Cryptocurrency – A Quick Guide For 2021

Once you understand the process of how to invest in cryptocurrency in the US – you’ll quickly learn that the fundamentals are actually very simple. All you need to do is open an account with a regulated broker like eToro – which offers some of the lowest trading fees in this industry.

For a quick overview of how to invest in cryptocurrency with eToro – check out the steps outlined below.

  • Step 1: Open an Account with eToroOpening an account at eToro simply requires you to click the ‘Join Now’ button on the provider’s homepage and enter your personal information. You’ll also need to enter your contact details and social security number.
  • Step 2: Upload Your ID – You will also need to provide eToro with a copy of your government-issued ID.
  • Step 3: Deposit Funds – Next, you will need to deposit some funds into your newly created account. The minimum deposit is just $50 at eToro and you use a debit/credit card or transfer funds from your checking account.
  • Step 4: Invest in Cryptocurrency – Click on the ‘Trade Markets’ button followed by ‘Crypto’. Once you find the digital asset you wish to invest in – click the ‘Trade’ button. Finally, enter the amount of money you wish to invest (minimum $25) and confirm your purchase by clicking on the ‘Open Trade’ button.

The above investment process should take you no more than five minutes to complete end-to-end. As soon as your investment is executed by eToro, the broker will transfer the tokens to your main portfolio.

You don’t need to withdraw the tokens to a private wallet – as eToro will keep your investment safe at all times. When you eventually decide to cash out your cryptocurrency investment – you simply need to place a sell order from within your portfolio.

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

Where to Buy Crypto – Full Broker Reviews

You will need to research carefully when it comes to choosing a cryptocurrency broker. This is because there are many platforms in this industry that are based offshore and thus – do not have the legal remit to serve US clients. In addition to safety, you also need to consider what crypto markets the broker supports and how much you will be charged to invest.

To save you from having to perform countless hours of research yourself, we have pre-vetted a small selection of top-rated brokers that allow you to safely invest in cryptocurrency in the US.

1. eToro – Overall Best Place to Invest in Cryptocurrency

bitcoin today

eToro is a popular brokerage firm that offers a wide range of asset classes. When it comes to cryptocurrency, you will find a huge selection of markets to choose from. This includes large-cap digital assets like Bitcoin, XRP, Litecoin, EOS, and Ethereum. Other popular markets include AAVE, Dogecoin, Shiba Inu, and Decentraland. Regardless of which token takes your interest, eToro allows you to invest in cryptocurrency from just $25. This is the case irrespective of how much the individual crypto asset is worth in the open marketplace.

For example, let’s suppose that you are interested in Bitcoin – which at the time of writing, is trading at almost $50,000 per token. If you decided to invest $500 into this digital asset at eToro, you would own 1% of one Bitcoin. This is because eToro supports fractional ownership – meaning that you can invest any amount of your choosing as long as you meet the stipulated minimum of $25. By choosing eToro as your go-to cryptocurrency broker, you will also benefit from some very competitive fees.

etoro crypto

The way eToro works is that the broker operates on a spread-only basis – meaning that your fee amounts to the mark-up between the buy and sell price. This starts at just 0.75% at eToro – although this can vary depending on the crypto asset and wider market conditions. While we are on the discussion of fees, eToro allows you to deposit funds without paying any transaction charges. The minimum deposit amount is just $50 and you can add funds to your account via a bank transfer or debit/credit card.

A popular feature at eToro is the Copy Trading tool – which is ideal for newbies with little to no experience of cryptocurrencies. This is because you will be ‘copying’ a successful trader like-for-like – so any cryptocurrencies that they buy will also be reflected in your own eToro portfolio. The Copy Trading tool requires a minimum investment of just $500 and you won’t need to pay any additional commissions or fees. You might also consider the CryptoPortfolio at eToro – which offers a basket of digital tokens at various weights.

etoro crypto

This is managed by the in-house eToro team – so it’s yet another way to invest in cryptocurrencies in the US on a purely passive basis. We briefly mentioned earlier that there are many illegitimate brokers in the cryptocurrency scene. You shouldn’t have this concern at eToro, as the broker is approved by the SEC and FINRA to operate in the US. Furthermore, the broker is authorized and regulated by CySEC, ASIC, and the FCA. You can get started at eToro in under five minutes by opening an account, depositing funds, and choosing the cryptocurrency you wish to invest in!

Pros

  • Invest in cryptocurrencies on a spread-only basis
  • Minimum investment per trade from just $25
  • Supports debit/credit cards 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 Cryptocurrency for Beginners

Buy MANA at Coinbase

Coinbase is arguably one of the best-known cryptocurrency brokers in the US. The broker is heavily regulated and carries a superb reputation – especially with beginners. You don’t need to have any prior experience of cryptocurrencies to use Coinbase – as the platform is very simple to use. In fact irrespective of whether you invest online or via the Coinbase app – you should be able to complete the process in under 10 minutes. Perhaps the easiest way to invest in cryptocurrencies at Coinbase is to use your Visa or MasterCard debit card.

This will allow you to complete your purchase instantly. But, you will first need to upload a copy of your ID – as per KYC rules. The fee applied to instant debit card investments at Coinbase is 3.99% of the transaction amount. If your investment is less than $200 – you will pay a flat commission which actually works out more expensive. If you elect to deposit funds via a local bank transfer, it might take 1-2 working days to arrive. But, not only will you benefit from a fee-free deposit, but you’ll pay a reduced trading commission of 1.49%.

coinbase review

When it comes to supported digital assets, Coinbase is home to dozens of cryptocurrencies. This includes a good blend of markets – so Coinbase is suitable for creating a diverse portfolio of blockchain assets. For example, not only can you invest in major cryptocurrencies like Bitcoin, Litecoin, and Ethereum – but a full host of ERC-20 tokens. In terms of storing your crypto investment safely, you can do this directly on the Coinbase website. The broker offers several security features – such as cold storage (98%), two-factor authentication, and device whitelisting.

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 Cryptocurrency for Asset Diversity

While some investors in the US will look to stick with the likes of Bitcoin and Ethereum, others will look to dive much deeper into this industry. By this, we mean diversifying into a range of digital currencies across various market capitalizations and risk spectrums. For example, you might decide to add some large-cap tokens to your portfolio – such as Litecoin, Dogecoin, and EOS, alongside a selection of DeFi (decentralized finance) and ERC-20 tokens. Either way, if diversification if your main priority – Binance is one of the best brokers for the job.

In a nutshell, Binance is the world’s largest cryptocurrency exchange in terms of trading volume. It often facilities close to $100 billion in daily trading activity – which is huge. With that said, the exchange has since launched a bespoke website aimed specifically at Americans who wish to invest in cryptocurrency in a safe and regulated environment. This will give you access to 50 cryptocurrencies that can be purchased instantly with a debit or credit card. The fee charged by Binance on instant investments stands at just 0.5%.

binance review

As such, this makes it really easy and cost-effective to diversify your cryptocurrency investments from the comfort of your home. The Binance exchange offers even more in the way of diversity – with heaps of crypto pairs that can be traded on a short or long-term basis. The standard spot trading fee at Binance US is just 0.1% – so that’s $1 for every $1,000 staked. Binance offers plenty of security controls – should you wish to store your digital tokens in your account. Binance is also behind the Trust Wallet – which can be downloaded onto your iOS or Android device for free.

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.

4. Robinhood – Invest in Cryptocurrency via a Regulated Mobile App

If you are interested in the US stock markets, then you might have previously come across Robinhood. The brokerage firm is well-known in the US for its user-friendly and low-cost stock trading facilities – which is particularly attractive to retail investors. With that said, Robinhood also offers a cryptocurrency investment division that covers a small selection of popular tokens. This includes Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic, and Litecoin.

Naturally, such a small portfolio of digital currencies does mean that Robinhood won’t be suitable for those of you looking to invest in a diverse range of crypto assets. However, if you are looking to invest in one of the cryptocurrencies mentioned above, you can do so on a commission-free basis. We should note that commission-free crypto investing at Robinhood doesn’t mean that you are not paying any fees. On the contrary, you will indirectly pay for your cryptocurrency purchase via the spread.

This is the difference between the buy and sell price of the cryptocurrency in question – and this can amount to well over 1% depending on the asset and current market conditions. On the flip side, it is notable that Robinhood supports fractional cryptocurrency purchases – so you can invest as little as you wish. Robinhood is heavily regulated in the US – so there will be no issues with safety. The brokerage site will ultimately appeal to those of you that wish to have an investment account that allows you to access both cryptocurrencies and traditional stocks.

Pros

  • Hugely popular broker in the US
  • Millions of US clients on its books
  • Offers crypto, stocks, options, and funds
  • 0% commission on all supported markets
  • Heavily regulated

Cons

  • Spreads are often wide
  • No debit/credit card deposits
  • Only the first $1,000 is credited instantly when depositing funds (basic account)
  • Limited selection of cryptocurrencies

at eToro, #1 Broker in the US

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

5. Webull – Invest in Cryptocurrency From Just $1

webull review

Webull is often viewed as a direct market competitor to Robinhood. This is because both brokerage firms target the average retail investor that might be looking to trade financial instruments for the very first time. Both also claim to offer 0% commissions on all supported markets. In the case of Webull, while you will not pay any commission to invest in cryptocurrency in the US – you do need to be mindful that spreads start at 1%. The minimum cryptocurrency investment at Webull is just $1 – which is great for those of you on a budget.

We found that Webull offers a relatively wide selection of cryptocurrencies – all of which can be accessed on the main desktop platform or the iOS/Android app. For example, you can trade everything from Cardano, Stellar, and Ethereum Classic to Dogecoin, Litecoin, and Bitcoin. These markets are operational 7 days per week – so you can enter and exit the market as you please. Webull accounts are quick and easy to open, and there is no minimum deposit requirement.

webull review

You will not be able to fund your account with a debit/credit card – as Webull only accepts ACH and bank wires. You will pay $8 per deposit when opting for a bank wire and $25 on withdrawals. You can, however, deposit and withdraw funds for free when electing to use ACH. All in all – and much like Robinhood, Webull is probably the best option for US clients that wish to combine cryptocurrency and stock/fund investments via a single account. And of course – Webull is heavily regulated in the US – so you shouldn’t have any issues regarding safety and security.

Pros

  • User-friendly trading app for both iOS and Android devices
  • 0% commission policy across all assets
  • No minimum deposit
  • ACH deposits and withdrawals are fee-free
  • Regulated in the US
  • Invest from just $1

Cons

  • Crypto spreads start at 1%
  • Too basic for experienced traders
  • No support for e-wallets or debit/credit cards

at eToro, #1 Broker in the US

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

How to Invest in Cryptocurrency – Detailed & Explained in Full

Towards the top of this guide, we ran you through a quickfire overview of how to invest cryptocurrency in under five minutes. However, if you’re looking to invest in this marketplace for the first time – you might require a more comprehensive walkthrough.

If this is the case – below we explain how to invest in cryptocurrency in the US at eToro – a regulated and low-cost broker that is aimed at newbies.

Step 1: Open a Cryptocurrency Investment Account

To get the ball rolling, head over to the eToro homepage and open an account. You can do this with ease by clicking the ‘Join Now’ button and entering your personal information as prompted. This covers the basics – such as your name, nationality, date of birth, home address, and social security number.

how to join etoro

eToro also needs to collect your cell phone number and email address – both of which need to be verified. You will also need to choose a username and password.

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

Step 2: Upload ID

Not only is eToro approved in the US by the SEC and FINRA – but it is also regulated by financial bodies in Europe and Australia. Taking all of this into account – eToro is required to run you through a quick KYC (Know Your Customer) process before you can begin to invest in cryptocurrencies.

For this, you’ll need a copy of your government-issued ID. You will also need to provide proof of residency – such as a bank statement or utility bill. Once you upload the aforementioned documents, the eToro will verify them in 1-2 minutes.

Step 3: Deposit Funds

The next step is to deposit some funds – so that you can proceed to invest in your chosen cryptocurrency. eToro allows US clients to deposit money via a debit/credit card (Visa, MasterCard, Maestro) or bank transfer. The minimum deposit requirement is just $50.

Deposit Funds

Best of all, eToro doesn’t charge US clients any transaction fees on deposits. This is in stark contrast to platforms like Coinbase or Coinmama – which charge 3.99% and 5% on debit card transactions, respectively.

Step 4: Search for Cryptocurrency

If you already know which cryptocurrency you want to invest in, it’s best to use the eToro search box. In our example, we are looking to invest in Ethereum – the world’s second-largest digital currencies in terms of market capitalization.

However, if you need a little bit of inspiration as to which cryptocurrencies to invest in, it’s best to explore what’s on offer before proceeding. You can do this by clicking the ‘Trade Markets’ button on the left-hand side – followed by ‘Crypto’.

Step 5: Invest in Cryptocurrency

When you are ready to complete your cryptocurrency investment at eToro – click the ‘Trade’ button. You will then see a user-friendly order box – such as the one in the image below.

The only thing you need to do here is to tell eToro how much money you wish to invest into your chosen cryptocurrency – which should be stated in US dollars. All supported digital currencies come with a minimum investment of just $25 at eToro.

Finally, click on the ‘Open Trade’ button to complete your investment. Within seconds, the order will be executed at the next best available price. You can then head over to the ‘Portfolio’ area of your account to see your newly purchased digital tokens!

How to Sell Cryptocurrency

Perhaps one of the biggest barriers of entry for newbie cryptocurrency investors is that they are unsure how they can actually realize their profits. However, we should make the point that selling cryptocurrency back to US dollars is very simple.

  • That is – if you use a regulated broker like eToro – you can cash out your digital currency investment within seconds.
  • This is because the cryptocurrency tokens are stored by eToro and thus – you can access them around the clock by simply logging into your account.
  • Then, when you are ready to sell – you can do this from within your eToro portfolio.

The funds will instantly be reflected in your account balance – which you then have the option of withdrawing back to your bank account or debit/credit card.

Ways to Invest in Cryptocurrency

The easiest way to invest in cryptocurrency in the US is to use a secure online broker that supports your preferred deposit method. However, this isn’t the only way to gain exposure to this marketplace. As such, it’s important that you consider all options before you proceed to invest in digital currencies.

Cryptocurrency ATM

As the name implies, cryptocurrency ATMs allow you to invest in digital assets at a physical terminal. Most ATMs scattered around the US – of which there are thousands, will only support Bitcoin, Some might support other popular cryptocurrencies like Ethereum or Litecoin – but this will vary from provider to provider.

The main process of investing in cryptocurrency via an ATM is as follows:

  • Find your nearest cryptocurrency ATM by using a website like CoinAtmRadar
  • Once you have located your nearest ATM, select the cryptocurrency you want to buy
  • You will then be asked how much you wish to invest – which usually needs to be in multiples of $10
  • The ATM will then let you know how much cryptocurrency you will get for your stated investment
  • If you are happy with the exchange rate provided – you will then need to insert the dollar amount into the ATM
  • The ATM will then transfer your purchased cryptocurrency to your stated wallet address

Take note, although the process of investing in digital assets via cryptocurrency ATM might be simple, you do need to have access to a private wallet. Furthermore, and perhaps most pertinent, cryptocurrency ATMs average a commission of 10-15% per transaction.

Cryptocurrency Broker

Cryptocurrency brokers are regulated entities that have the legal remit to serve US clients. All of the brokers that we reviewed on this page fall within the category. This means that you can safely invest in cryptocurrencies in the US with a solid provider. The best cryptocurrency brokers operating in this space will support convenient payment types and offer competitive fees.

For example, at eToro, you can pay for your cryptocurrency investment with a debit/credit card – which will be processed instantly. You will also benefit from a super-low fee structure that starts at just 0.75% via the spread!

Cryptocurrency Exchanges

Cryptocurrency exchanges are plentiful – with hundreds currently operating in the online space. These exchanges sit between buyers and sellers – meaning that you will be trading with other market participants. The overarching selling point with cryptocurrency exchanges is that regulation is either lax or non-existent. This allows people to open accounts and deposit funds without needing to provide any personal information.

ethereum exchanges

However, what you should know is that by using an unregulated cryptocurrency exchange that is based offshore – your funds are at risk. Not only in terms of an external hacking attempt but internal malpractice. If anything does go wrong at your chosen cryptocurrency exchange -= you will likely have nowhere to turn. All in all, the safest and most convenient option when investing in cryptocurrencies is to use a licensed online broker.

Should I Invest in Cryptocurrency?

If you’ve read our guide up to this point – then you are likely ready to invest in cryptocurrency for the first time. However, it is important to remember that while digital currencies have generated some extra-ordinarily financial returns in recent months and years, this asset class is still super volatile. That is to say, much of the industry is driven by market speculation and FOMO (Fear of Missing Out).

To ensure that cryptocurrencies are right for your investment portfolio – be sure to make the following considerations before proceeding.

Huge Upside Potential

Make no mistake about it – there is every chance that you are looking to invest in cryptocurrency in the US because you have taken notice of the types of financial returns available. For example, major cryptocurrencies like Bitcoin and Ethereum have generated astronomical growth levels since they launched in 2009 and 2015 respective.

This is also the case with other large-cap digital currencies like Litecoin, XRP, EOS, Cardano, and as of 2021 – Dogecoin. However, you then have up-and-coming cryptocurrencies that are several months, weeks, or even days old.

safemoon price

These digital assets provide the opportunity to target sizable financial returns – as oftentimes, these cryptocurrencies will enter the market will super-low valuation. This provides an upside that would otherwise not be seen in the traditional investment arena. To pick just one example of many, a digital currency called Safemoon was launched as recently as March 2021.

Fast forward just two months and the same crypto asset hit a market capitalization of just over $6 billion. But, of course, there is no guarantee that your chosen cryptocurrency will replicate similar returns. On ther contrary, you could lose some or even all of your investment stake.

Diversification is Simple

We briefly mentioned earlier that there are now over 11,000 digital currencies in this marketplace – with more and more additional being recorded on a week-to-week basis.

  • While most of these tokens won’t be worth your time – this does at the very least give you a great opportunity to create a diversified portfolio.
  • For example, you might elect to invest in Bitcoin alongside some smart contract projects like Ethereum, NEO, and Cardano.
  • You might also decide to add some smaller ERC-20 tokens to your portfolio and even a selection of up-and-coming DeFi coins.

The more you diversify in this industry – the less chance you have of being over-exposed to a specific cryptocurrency that no longer becomes relevant.

Entering the Market is Easy

Although you might not understand the intricacies of blockchain assets – never before has it been so easy to invest in cryptocurrencies in the US. In fact, all you need to do is open an account with one of the brokers discussed on this page – and you should be able to complete your cryptocurrency purchase in a matter of minutes.

When opting for a beginner-friendly platform like eToro – which is now used by over 20 million people, you only need to invest $25 into your chosen cryptocurrency. The platform also supports debit and credit card purchases – so you can invest from the comfort of your home with ease.

Cryptocurrency is Becoming Mainstream

Cryptocurrency and blockchain technology are no longer a developer’s pipedream. On the contrary, this innovative space has since become mainstream in more ways than one.

  • For example, regulators in virtually every nation-state have taken notice – with many even installing cryptocurrency-specific legislation as a way of governing the industry.
  • In the US specifically, there is now a regulated Bitcoin futures market and in the very near future – it is believed that an ETF will follow.

The cryptocurrency industry has also been embarrassed by a significant number of people and institutions – with the like of Tesla recently investing over $1.5 billion into Bitcoin.

Store of Value and Medium of Exchange

Nobody truly knows what role cryptocurrencies will play in the future of civilization. But, what we do know is that digital assets like Bitcoin carry many of the characteristics to function as both a store of value and a medium of exchange. Regarding the former, Bitcoin has a finite value of just 21 million tokens – and so the supply of the digital currency cannot be manipulated by any person or authority.

buy xrp at etoro

The crypto asset is also easy to store, transfer, and fractionize – which again, makes it ideal as a store of value. Cryptocurrencies can also operate as a medium of exchange – especially when you consider the speed and cost-effectiveness at which transactions can be processed. For example, the likes of XRP and Stellar can facilitate cross-border transactions in a matter of seconds at a fee of just a fraction of a cent.

What are the Risks of Investing in Cryptocurrency?

It goes without saying that many cryptocurrency investors managing to time the market correctly have made vast financial gains from this industry. Bitcoin, for example, was priced at less than $0.01 when it was first launched in 2009. The de-facto cryptocurrency has since hit highs of over $64,000.

But, cryptocurrencies do present a much higher risk/reward spectrum than traditional assets – so you do need to consider this before parting with any of your hard-earned money.

The most inherent risks associated with cryptocurrency investments in the US are as follows:

Speculation and FOMO

The first thing to remember is that arguably – the vast bulk of people entering the cryptocurrency investment scene for the first time are market speculators driven by FOMO. That is to say, people invest because they think that by not doing so – they are missing out on huge profits. However, this speculative approach to cryptocurrency means that people are entering the market for all the wrong reasons.

dogecoin price

For example, if you were to buy shares in Tesla – you would have a good reason to do so. This is because the company solves real-world problems through its innovative electric vehicles and renewable technologies. However, by investing in a cryptocurrency like Dogecoin – which was created as a joke, you are likely doing so for speculative reasons.

High Volatility Levels

Cryptocurrencies are more volatile than move asset classes in the investment space. That is to say, the value of your cryptocurrency investment can skyrocket – but, it can also capitulate in lighting speed.

  • Let’s take Let’s once again take the example of Safemoon – which we mentioned earlier.
  • To recap, this digital currency went from 0 to a market capitalization of $6 billion in a matter of two months.
  • This is great for those that invested when the cryptocurrency was first launched.
  • However, at the time of writing in September 2021, Safemoon is now carrying a market capitalization of $1.38 billion.
  • Although this is still impressive, this does mean that those that invested at its peak in May 2021 and now looking at losses in excess of 77%.

This reinforces our point that irrespective of the cryptocurrency you decided to invest in – you must be prepared for high levels of volatility.

How Much Does it Cost to Invest in Cryptocurrency?

The costs involved when investing in cryptocurrency in the US will vary depending on:

  • Your chosen broker
  • Your preferred payment method
  • The size of your investment

Let’s break down the main costs involved in digital asset investing so that you know what to look out for when choosing a cryptocurrency broker.

Deposits and Withdrawals

If you are happy to deposit funds via ACH or a bank wire – you might be able to benefit from free transactions. But, if you prefer the speed and convenience of using a debit or credit card, the fees can be costly. For example, Coinmama charges 5% on debit/credit card purchases while at Coinbase – it’s 3.99%.

On the other hand, when reviewing top-rated cryptocurrency broker eToro, we found that the provider allows you to fund your account on a fee-free basis. This is the case for both bank account deposits and debit/credit cards.

Commissions and Spreads

Trading commissions are charged by brokers when you buy and sell cryptocurrencies. This works in the same way as buying and selling shares from a traditional stockbroker.

For example:

  • Let’s say that you use Coinbase to invest in cryptocurrency – which charges a standard commission of 1.49%.
  • If you decide to invest $5,000 – then your commission will amount to $74.50
  • We’ll then say that you sell your cryptocurrency investment when it has increased in value to $10,000
  • This means that at 1.49% – your sell commission at Coinbase would amount to $149
  • In total, you paid $223.50 in commission to enter and exit the market

Now let’ see what this would have cost you when using a spread-only broker like eToro:

  • eToro charges a spread of 0.75% when you invest in Bitcoin
  • So, your $5,000 investment would attract an indirect fee of $37.50
  • You sell your Bitcoin investment when it is worth $10,000 – so the spread here amounts to $75
  • All in all, your trading fees – via the spread, amounted to $112.50

Comparing the two brokers means that you saved $111 by using eToro instead of Coinbase. However, the savings here are likely to be even larger when you factor in the spread at Coinbase – which is believed to average 0.50%.

How to Buy Invest in Cryptocurrency – Conclusion

This beginner’s guide has provided you with each and every piece of information that you need to invest in cryptocurrency in the US. We’ve explained the fundamentals of why choosing a broker is so important – and that in order to do this, you will need to focus on metrics surrounding regulation, fees, payment types, and supported markets.

If you are ready to invest in cryptocurrency in the US right now – you might want to consider eToro for this purpose. In doing so, you will be using a US-approved broker that allows you to invest in dozens of different digital assets at industry-leading fees. You simply need to open an account, deposit funds via a bank wire or debit/credit card – and choose the cryptocurrency that you want to invest in. It really is that simple!

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
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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.