There are now several easy ways to buy Bitcoin, including apps, crypto exchanges, brokers and Bitcoin ATMs.
Costs, security and type of ownership are top considerations. For instance, crypto exchanges might offer lower costs, traditional brokers might provide better security and ETFs give you easy exposure but not direct ownership of Bitcoin.
Bitcoin is too risky to be suitable for all investors. It’s highly volatile and not a reliable hedge against inflation.
Bitcoin has seen dramatic price swings since its 2009 debut that have created fortunes for some investors and great losses for others. If you’re considering investing in Bitcoin, you have options, including Bitcoin ETFs that make it possible to invest without actually owning the tokens themselves.
Here are five ways to buy bitcoins and some key factors that you need to watch.
What is Bitcoin?
Bitcoin is the world’s most popular cryptocurrency — a currency that exists only virtually — with a market cap close to $2 trillion. Bitcoin debuted in 2009 and really broke into mainstream consciousness in 2017 with its rapid rise that year. Coins are created, or “mined,” when computers that organize the currency process and legitimize transactions in the currency.
Bitcoin uses a decentralized network of computers to manage everything — a distributed ledger called a blockchain that tracks transactions in the currency. It’s like a huge public record of every transaction that has taken place in the currency. And the network monitors everything, ensuring the currency’s integrity and the ownership of bitcoins.
How to buy Bitcoin: 5 methods
If you’re looking to trade Bitcoin, the good news is that you now have several options and don’t need a specialized account unless that’s the route you prefer. Each method offers a different combination of cost, security and potential upside and downside.
Method
Best for
Average cost
Financial apps
Casual or beginner investors
$0.49 for trades < $5; fees rise from there
Crypto exchanges
Intermediate or active crypto investors
Fees start at 0.10%
Trading apps
Beginner or intermediate investors; passive traders
No direct commission, but traders pay spread markup
Traditional brokers
Investors who are comfortable trading in Bitcoin futures
$0 or low fee + percentage of trade value
Bitcoin ATMs
Investors who prefer cash or convenience
About 20% or more
1. Financial apps
Best for: Casual or beginner investors who might already be using a financial app
Average cost to buy: $0.49 for trades < $5; fees rise from there
Many financial apps such as PayPal and Venmo now allow you to trade cryptocurrency.
PayPal makes it tremendously easy to directly buy or sell bitcoins using the same app that you’ve come to trust with your online payments. You’ll pay $0.49 for trades involving less than $5, and the fees rise from there. Trades involving $200.01 to $1,000 cost 1.8 percent, while those above $1,000 come in at 1.5 percent. There’s a spread markup on trades, but you won’t pay a fee for holding cryptocurrency in your account, and you can trade as little as $1 at a time. Ethereum, Litecoin, Bitcoin Cash, Solana and Chainlink are also tradable here, as is a PayPal stablecoin.
Venmo charges the same fees, since it’s owned by PayPal.
2. Crypto exchanges
Best for: Intermediate or active crypto investors who want more control over their assets or a wider coin selection
Average cost to buy: Fees start at 0.10 percent
Crypto exchanges are another popular option for those looking to buy Bitcoin. Exchanges offer a few key advantages to traders. First, the best crypto exchanges offer among the lowest possible all-in costs for trading cryptocurrency. So they’re a good bet if cost is your key objective. Second, many exchanges don’t charge spread mark-ups, which are hidden fees built into the trading prices. Third, many exchanges offer wallets, allowing you to securely store your cryptocurrency.
The fees at various crypto exchanges can differ markedly, so it’s worthwhile looking around to find which offers the best combination of price, crypto choice and service. Popular options include Binance, Crypto.com and Kraken.
3. Trading apps
Best for: Beginner or intermediate investors; passive traders who like a simple interface
Average cost to buy: No direct commission, but traders pay spread markup
You can pick up a few bitcoins with no direct commission by using a trading app such as Webull or Robinhood, though you’ll end up making up for it with a spread markup. These apps also allow you to purchase Bitcoin ETFs.
Robinhood takes its best trick — no commissions — and applies it to cryptocurrency, but it does charge a spread markup, the exact cost of which it does not reveal. You’ll be able to buy bitcoins directly and will have access to other digital currencies, too. Of course, you’ll be able to buy stocks, ETFs and options while you’re on the easy-to-use platform, including Bitcoin ETFs.
Webull lets you trade a handful of cryptos, including Bitcoin. You’ll pay a spread markup of 1 percent on each transaction, however. You can also trade stocks, Bitcoin ETFs and options.
4. Traditional brokers
Best for: Investors who are comfortable trading in Bitcoin futures rather than the cryptocurrency itself
Average cost to buy: $0 or low fee + percentage of trade value
Some traditional brokers have also ventured into the cryptocurrency arena, including Interactive Brokers and Charles Schwab. And with the introduction of Bitcoin ETFs, major brokers offer funds that let you buy the crypto, too.
At Interactive Brokers, you’ll be able to buy futures contracts on Bitcoin as well as trade the coin directly. The broker charges $5 per futures contract, which gives you exposure to five bitcoins. If you want to trade Bitcoin directly, you’ll pay a competitive commission of 0.12 to 0.18 percent of your trade value, depending on your monthly volume. You’ll also have access to Ethereum, Solana, Dogecoin and others. Interactive Brokers provides a whole range of other tradable securities, giving you access to securities across the world.
5. Bitcoin ATMs
Best for: Investors who prefer cash or convenience
Average cost to buy: About 20 percent or more
Another option is to buy bitcoins directly through a Bitcoin ATM, though you’re likely to pay much more in commissions than you would elsewhere. You’ll be able to buy bitcoins, and some ATMs will allow you to sell them, too, using cash or a debit card. But you may need a Bitcoin wallet to make the transaction. Commissions can be pricey, with some ATMs charging around 20 percent per transaction, while the fees at others may stretch into the teens.
Buying Bitcoin: Here’s what to watch for
As you’re considering how to buy Bitcoin, you’ll want to evaluate the following factors, since they should influence your choice of where to buy it or whether to ultimately avoid it altogether.
Ownership: What do you want to own exactly? You can own Bitcoin directly (say, through an ETF) or a derivative such as a futures contract, which offers a return on the currency’s movement.
Upside/downside: Your potential gain is related directly to whether you own the currency directly or via futures contract. By owning Bitcoin directly, your profit increases by a dollar with every dollar increase in the currency. In contrast, with futures, you can gain much more quickly without having to front as much capital. However, your downside is more limited by owning directly, while you can lose more money with futures.
Cost: Commissions can vary widely depending on how you purchase Bitcoin. Futures contracts get you a big piece of the action relatively cheaply, while some brokers may charge you several percent to buy directly. A few percent might not sound like a lot, but if you’re trading in and out of the market, it will quickly eat away at your profits. In contrast, a Bitcoin ETF gets you in the game quickly with no direct commission and a low annual expense ratio, and it’s simpler to trade that way, too.
Security: One of the biggest concerns with any investment is making sure that it’s secure. Some newer cryptocurrency players have had serious problems with security. For example, hackers stole $1.5 billion in Ethereum from ByBit earlier this year. More traditional brokers may offer better security because they’ve been dealing with the issue for much longer. And with Bitcoin ETFs, the fund company manages security, making it an easy way to own the cryptocurrency.
You may also receive bitcoins as part of commercial transactions. Regardless of how you came by your coins, any transaction in the cryptocurrency is reportable to the IRS at tax time.
What do you need to buy Bitcoin?
When you open an account at a traditional brokerage or a crypto exchange, you’ll need to provide basic personal information.
Your name, address, and phone number
Your Social Security number
Your bank account number
You may also have to detail how much trading experience you have and how comfortable you are with trading, depending on the institution.
This information allows the firm to identify you and verify who you are. It’s also vital during tax time when the broker or exchange prepares documents on your gains and losses, reports that you’ll need to accurately file your taxes.
Where is the best place to store bitcoins?
Where you store your Bitcoin depends on what you want to do with it. Frequent traders might keep it on an exchange or with a broker, while long-term investors or spenders might opt for a crypto wallet. Note that a crypto wallet is entirely your responsibility. If you’re not careful about security, you could wind up losing your cryptocurrency.
Two popular options for this latter group include hot wallets and cold wallets.
A hot wallet allows your cryptocurrency to be used or moved around easily. Because your coins are secured by software rather than hardware and are still connected to the internet, they’re less secure than cold wallets. But if you’re using a wallet because you intend to use the cryptocurrency, it makes sense to go with a hot wallet. Hot wallets come in a few varieties.
Desktop wallets: You can download wallet software to your computer and manage your crypto holdings from there. When you’re done transacting, you can even take it offline, increasing your security.
Web wallets: This browser plug-in allows you to connect to the blockchain and make transactions quickly, but the internet connection makes it less secure.
Mobile wallets: You can use software on a mobile device if you’re using crypto to pay or transact.
Some providers of hot wallets also offer multiple types of hardware wallets, so you can use one software type across multiple devices. Some options include:
MetaMask — browser-based and mobile using the Ethereum blockchain
Trust Wallet — mobile and browser extension (owned by Binance)
Coinbase Wallet — stand-alone mobile app and browser extension (separate from the Coinbase exchange)
A cold wallet is more valuable if you really want to lock down your cryptocurrency and make it nearly impervious. A cold wallet relies on hardware, a physical device, to secure your holdings, and it looks like a USB thumb drive. This can be disconnected from the internet, making your holdings very secure. When you’re ready to transact, you can plug it in and conduct business.
While more secure than a hot wallet, a cold wallet has other potential risks, including theft of the device, loss of the wallet and even loss of the password. So even cold wallets are not foolproof. Some options include:
Ledger — offline storage with high security
Trezor — user friendly
Coldcard — secure Bitcoin-only wallet
FAQs
Fees for buying Bitcoin vary depending on how you buy it. Crypto exchanges might charge 0.1 percent to 2 percent per trade; brokerages and trading apps may charge no fee but add a spread markup; Bitcoin ETFs cost around 0.25 percent to 1.5 percent annually.
Experts say there’s little evidence to support the assertion that Bitcoin acts as a hedge against inflation. It’s too new and too volatile to provide much stability. Bitcoin is more like a risky tech stock than a stalwart that zigs when the market zags.
Yes. You can sell your Bitcoin for a fiat currency like U.S. dollars, transfer it to your bank account or linked card.
Bottom line
If you’re looking to purchase Bitcoin or other digital currencies as an investment, it’s important to keep costs to a minimum. Given the novelty of the crypto market, many brokers would love to maximize their commissions (in contrast to the stock market, where trading fees have gone to zero). Those fees eat into your profits, so look for a way to minimize those frictional costs. But the introduction of Bitcoin ETFs provides a cheaper and more secure way for traders to gain exposure to the cryptocurrency.
While the price of Bitcoin has run high quickly, it still carries serious risks that make it not suitable for everyone. Those looking for conservative investments or who cannot afford to lose money should consider avoiding Bitcoin or trading only with an amount they are willing to lose.
— Kim Husband contributed to an update.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
There are now several easy ways to buy Bitcoin, including apps, crypto exchanges, brokers and Bitcoin ATMs.
Costs, security and type of ownership are top considerations. For instance, crypto exchanges might offer lower costs, traditional brokers might provide better security and ETFs give you easy exposure but not direct ownership of Bitcoin.
Bitcoin is too risky to be suitable for all investors. It’s highly volatile and not a reliable hedge against inflation.
Bitcoin has seen dramatic price swings since its 2009 debut that have created fortunes for some investors and great losses for others. If you’re considering investing in Bitcoin, you have options, including Bitcoin ETFs that make it possible to invest without actually owning the tokens themselves.
Here are five ways to buy bitcoins and some key factors that you need to watch.
What is Bitcoin?
Bitcoin is the world’s most popular cryptocurrency — a currency that exists only virtually — with a market cap close to $2 trillion. Bitcoin debuted in 2009 and really broke into mainstream consciousness in 2017 with its rapid rise that year. Coins are created, or “mined,” when computers that organize the currency process and legitimize transactions in the currency.
Bitcoin uses a decentralized network of computers to manage everything — a distributed ledger called a blockchain that tracks transactions in the currency. It’s like a huge public record of every transaction that has taken place in the currency. And the network monitors everything, ensuring the currency’s integrity and the ownership of bitcoins.
How to buy Bitcoin: 5 methods
If you’re looking to trade Bitcoin, the good news is that you now have several options and don’t need a specialized account unless that’s the route you prefer. Each method offers a different combination of cost, security and potential upside and downside.
Method
Best for
Average cost
Financial apps
Casual or beginner investors
$0.49 for trades < $5; fees rise from there
Crypto exchanges
Intermediate or active crypto investors
Fees start at 0.10%
Trading apps
Beginner or intermediate investors; passive traders
No direct commission, but traders pay spread markup
Traditional brokers
Investors who are comfortable trading in Bitcoin futures
$0 or low fee + percentage of trade value
Bitcoin ATMs
Investors who prefer cash or convenience
About 20% or more
1. Financial apps
Best for: Casual or beginner investors who might already be using a financial app
Average cost to buy: $0.49 for trades < $5; fees rise from there
Many financial apps such as PayPal and Venmo now allow you to trade cryptocurrency.
PayPal makes it tremendously easy to directly buy or sell bitcoins using the same app that you’ve come to trust with your online payments. You’ll pay $0.49 for trades involving less than $5, and the fees rise from there. Trades involving $200.01 to $1,000 cost 1.8 percent, while those above $1,000 come in at 1.5 percent. There’s a spread markup on trades, but you won’t pay a fee for holding cryptocurrency in your account, and you can trade as little as $1 at a time. Ethereum, Litecoin, Bitcoin Cash, Solana and Chainlink are also tradable here, as is a PayPal stablecoin.
Venmo charges the same fees, since it’s owned by PayPal.
2. Crypto exchanges
Best for: Intermediate or active crypto investors who want more control over their assets or a wider coin selection
Average cost to buy: Fees start at 0.10 percent
Crypto exchanges are another popular option for those looking to buy Bitcoin. Exchanges offer a few key advantages to traders. First, the best crypto exchanges offer among the lowest possible all-in costs for trading cryptocurrency. So they’re a good bet if cost is your key objective. Second, many exchanges don’t charge spread mark-ups, which are hidden fees built into the trading prices. Third, many exchanges offer wallets, allowing you to securely store your cryptocurrency.
The fees at various crypto exchanges can differ markedly, so it’s worthwhile looking around to find which offers the best combination of price, crypto choice and service. Popular options include Binance, Crypto.com and Kraken.
3. Trading apps
Best for: Beginner or intermediate investors; passive traders who like a simple interface
Average cost to buy: No direct commission, but traders pay spread markup
You can pick up a few bitcoins with no direct commission by using a trading app such as Webull or Robinhood, though you’ll end up making up for it with a spread markup. These apps also allow you to purchase Bitcoin ETFs.
Robinhood takes its best trick — no commissions — and applies it to cryptocurrency, but it does charge a spread markup, the exact cost of which it does not reveal. You’ll be able to buy bitcoins directly and will have access to other digital currencies, too. Of course, you’ll be able to buy stocks, ETFs and options while you’re on the easy-to-use platform, including Bitcoin ETFs.
Webull lets you trade a handful of cryptos, including Bitcoin. You’ll pay a spread markup of 1 percent on each transaction, however. You can also trade stocks, Bitcoin ETFs and options.
4. Traditional brokers
Best for: Investors who are comfortable trading in Bitcoin futures rather than the cryptocurrency itself
Average cost to buy: $0 or low fee + percentage of trade value
Some traditional brokers have also ventured into the cryptocurrency arena, including Interactive Brokers and Charles Schwab. And with the introduction of Bitcoin ETFs, major brokers offer funds that let you buy the crypto, too.
At Interactive Brokers, you’ll be able to buy futures contracts on Bitcoin as well as trade the coin directly. The broker charges $5 per futures contract, which gives you exposure to five bitcoins. If you want to trade Bitcoin directly, you’ll pay a competitive commission of 0.12 to 0.18 percent of your trade value, depending on your monthly volume. You’ll also have access to Ethereum, Solana, Dogecoin and others. Interactive Brokers provides a whole range of other tradable securities, giving you access to securities across the world.
5. Bitcoin ATMs
Best for: Investors who prefer cash or convenience
Average cost to buy: About 20 percent or more
Another option is to buy bitcoins directly through a Bitcoin ATM, though you’re likely to pay much more in commissions than you would elsewhere. You’ll be able to buy bitcoins, and some ATMs will allow you to sell them, too, using cash or a debit card. But you may need a Bitcoin wallet to make the transaction. Commissions can be pricey, with some ATMs charging around 20 percent per transaction, while the fees at others may stretch into the teens.
Buying Bitcoin: Here’s what to watch for
As you’re considering how to buy Bitcoin, you’ll want to evaluate the following factors, since they should influence your choice of where to buy it or whether to ultimately avoid it altogether.
Ownership: What do you want to own exactly? You can own Bitcoin directly (say, through an ETF) or a derivative such as a futures contract, which offers a return on the currency’s movement.
Upside/downside: Your potential gain is related directly to whether you own the currency directly or via futures contract. By owning Bitcoin directly, your profit increases by a dollar with every dollar increase in the currency. In contrast, with futures, you can gain much more quickly without having to front as much capital. However, your downside is more limited by owning directly, while you can lose more money with futures.
Cost: Commissions can vary widely depending on how you purchase Bitcoin. Futures contracts get you a big piece of the action relatively cheaply, while some brokers may charge you several percent to buy directly. A few percent might not sound like a lot, but if you’re trading in and out of the market, it will quickly eat away at your profits. In contrast, a Bitcoin ETF gets you in the game quickly with no direct commission and a low annual expense ratio, and it’s simpler to trade that way, too.
Security: One of the biggest concerns with any investment is making sure that it’s secure. Some newer cryptocurrency players have had serious problems with security. For example, hackers stole $1.5 billion in Ethereum from ByBit earlier this year. More traditional brokers may offer better security because they’ve been dealing with the issue for much longer. And with Bitcoin ETFs, the fund company manages security, making it an easy way to own the cryptocurrency.
You may also receive bitcoins as part of commercial transactions. Regardless of how you came by your coins, any transaction in the cryptocurrency is reportable to the IRS at tax time.
What do you need to buy Bitcoin?
When you open an account at a traditional brokerage or a crypto exchange, you’ll need to provide basic personal information.
Your name, address, and phone number
Your Social Security number
Your bank account number
You may also have to detail how much trading experience you have and how comfortable you are with trading, depending on the institution.
This information allows the firm to identify you and verify who you are. It’s also vital during tax time when the broker or exchange prepares documents on your gains and losses, reports that you’ll need to accurately file your taxes.
Where is the best place to store bitcoins?
Where you store your Bitcoin depends on what you want to do with it. Frequent traders might keep it on an exchange or with a broker, while long-term investors or spenders might opt for a crypto wallet. Note that a crypto wallet is entirely your responsibility. If you’re not careful about security, you could wind up losing your cryptocurrency.
Two popular options for this latter group include hot wallets and cold wallets.
A hot wallet allows your cryptocurrency to be used or moved around easily. Because your coins are secured by software rather than hardware and are still connected to the internet, they’re less secure than cold wallets. But if you’re using a wallet because you intend to use the cryptocurrency, it makes sense to go with a hot wallet. Hot wallets come in a few varieties.
Desktop wallets: You can download wallet software to your computer and manage your crypto holdings from there. When you’re done transacting, you can even take it offline, increasing your security.
Web wallets: This browser plug-in allows you to connect to the blockchain and make transactions quickly, but the internet connection makes it less secure.
Mobile wallets: You can use software on a mobile device if you’re using crypto to pay or transact.
Some providers of hot wallets also offer multiple types of hardware wallets, so you can use one software type across multiple devices. Some options include:
MetaMask — browser-based and mobile using the Ethereum blockchain
Trust Wallet — mobile and browser extension (owned by Binance)
Coinbase Wallet — stand-alone mobile app and browser extension (separate from the Coinbase exchange)
A cold wallet is more valuable if you really want to lock down your cryptocurrency and make it nearly impervious. A cold wallet relies on hardware, a physical device, to secure your holdings, and it looks like a USB thumb drive. This can be disconnected from the internet, making your holdings very secure. When you’re ready to transact, you can plug it in and conduct business.
While more secure than a hot wallet, a cold wallet has other potential risks, including theft of the device, loss of the wallet and even loss of the password. So even cold wallets are not foolproof. Some options include:
Ledger — offline storage with high security
Trezor — user friendly
Coldcard — secure Bitcoin-only wallet
FAQs
Fees for buying Bitcoin vary depending on how you buy it. Crypto exchanges might charge 0.1 percent to 2 percent per trade; brokerages and trading apps may charge no fee but add a spread markup; Bitcoin ETFs cost around 0.25 percent to 1.5 percent annually.
Experts say there’s little evidence to support the assertion that Bitcoin acts as a hedge against inflation. It’s too new and too volatile to provide much stability. Bitcoin is more like a risky tech stock than a stalwart that zigs when the market zags.
Yes. You can sell your Bitcoin for a fiat currency like U.S. dollars, transfer it to your bank account or linked card.
Bottom line
If you’re looking to purchase Bitcoin or other digital currencies as an investment, it’s important to keep costs to a minimum. Given the novelty of the crypto market, many brokers would love to maximize their commissions (in contrast to the stock market, where trading fees have gone to zero). Those fees eat into your profits, so look for a way to minimize those frictional costs. But the introduction of Bitcoin ETFs provides a cheaper and more secure way for traders to gain exposure to the cryptocurrency.
While the price of Bitcoin has run high quickly, it still carries serious risks that make it not suitable for everyone. Those looking for conservative investments or who cannot afford to lose money should consider avoiding Bitcoin or trading only with an amount they are willing to lose.
— Kim Husband contributed to an update.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
There are now several easy ways to buy Bitcoin, including apps, crypto exchanges, brokers and Bitcoin ATMs.
Costs, security and type of ownership are top considerations. For instance, crypto exchanges might offer lower costs, traditional brokers might provide better security and ETFs give you easy exposure but not direct ownership of Bitcoin.
Bitcoin is too risky to be suitable for all investors. It’s highly volatile and not a reliable hedge against inflation.
Bitcoin has seen dramatic price swings since its 2009 debut that have created fortunes for some investors and great losses for others. If you’re considering investing in Bitcoin, you have options, including Bitcoin ETFs that make it possible to invest without actually owning the tokens themselves.
Here are five ways to buy bitcoins and some key factors that you need to watch.
What is Bitcoin?
Bitcoin is the world’s most popular cryptocurrency — a currency that exists only virtually — with a market cap close to $2 trillion. Bitcoin debuted in 2009 and really broke into mainstream consciousness in 2017 with its rapid rise that year. Coins are created, or “mined,” when computers that organize the currency process and legitimize transactions in the currency.
Bitcoin uses a decentralized network of computers to manage everything — a distributed ledger called a blockchain that tracks transactions in the currency. It’s like a huge public record of every transaction that has taken place in the currency. And the network monitors everything, ensuring the currency’s integrity and the ownership of bitcoins.
How to buy Bitcoin: 5 methods
If you’re looking to trade Bitcoin, the good news is that you now have several options and don’t need a specialized account unless that’s the route you prefer. Each method offers a different combination of cost, security and potential upside and downside.
Method
Best for
Average cost
Financial apps
Casual or beginner investors
$0.49 for trades < $5; fees rise from there
Crypto exchanges
Intermediate or active crypto investors
Fees start at 0.10%
Trading apps
Beginner or intermediate investors; passive traders
No direct commission, but traders pay spread markup
Traditional brokers
Investors who are comfortable trading in Bitcoin futures
$0 or low fee + percentage of trade value
Bitcoin ATMs
Investors who prefer cash or convenience
About 20% or more
1. Financial apps
Best for: Casual or beginner investors who might already be using a financial app
Average cost to buy: $0.49 for trades < $5; fees rise from there
Many financial apps such as PayPal and Venmo now allow you to trade cryptocurrency.
PayPal makes it tremendously easy to directly buy or sell bitcoins using the same app that you’ve come to trust with your online payments. You’ll pay $0.49 for trades involving less than $5, and the fees rise from there. Trades involving $200.01 to $1,000 cost 1.8 percent, while those above $1,000 come in at 1.5 percent. There’s a spread markup on trades, but you won’t pay a fee for holding cryptocurrency in your account, and you can trade as little as $1 at a time. Ethereum, Litecoin, Bitcoin Cash, Solana and Chainlink are also tradable here, as is a PayPal stablecoin.
Venmo charges the same fees, since it’s owned by PayPal.
2. Crypto exchanges
Best for: Intermediate or active crypto investors who want more control over their assets or a wider coin selection
Average cost to buy: Fees start at 0.10 percent
Crypto exchanges are another popular option for those looking to buy Bitcoin. Exchanges offer a few key advantages to traders. First, the best crypto exchanges offer among the lowest possible all-in costs for trading cryptocurrency. So they’re a good bet if cost is your key objective. Second, many exchanges don’t charge spread mark-ups, which are hidden fees built into the trading prices. Third, many exchanges offer wallets, allowing you to securely store your cryptocurrency.
The fees at various crypto exchanges can differ markedly, so it’s worthwhile looking around to find which offers the best combination of price, crypto choice and service. Popular options include Binance, Crypto.com and Kraken.
3. Trading apps
Best for: Beginner or intermediate investors; passive traders who like a simple interface
Average cost to buy: No direct commission, but traders pay spread markup
You can pick up a few bitcoins with no direct commission by using a trading app such as Webull or Robinhood, though you’ll end up making up for it with a spread markup. These apps also allow you to purchase Bitcoin ETFs.
Robinhood takes its best trick — no commissions — and applies it to cryptocurrency, but it does charge a spread markup, the exact cost of which it does not reveal. You’ll be able to buy bitcoins directly and will have access to other digital currencies, too. Of course, you’ll be able to buy stocks, ETFs and options while you’re on the easy-to-use platform, including Bitcoin ETFs.
Webull lets you trade a handful of cryptos, including Bitcoin. You’ll pay a spread markup of 1 percent on each transaction, however. You can also trade stocks, Bitcoin ETFs and options.
4. Traditional brokers
Best for: Investors who are comfortable trading in Bitcoin futures rather than the cryptocurrency itself
Average cost to buy: $0 or low fee + percentage of trade value
Some traditional brokers have also ventured into the cryptocurrency arena, including Interactive Brokers and Charles Schwab. And with the introduction of Bitcoin ETFs, major brokers offer funds that let you buy the crypto, too.
At Interactive Brokers, you’ll be able to buy futures contracts on Bitcoin as well as trade the coin directly. The broker charges $5 per futures contract, which gives you exposure to five bitcoins. If you want to trade Bitcoin directly, you’ll pay a competitive commission of 0.12 to 0.18 percent of your trade value, depending on your monthly volume. You’ll also have access to Ethereum, Solana, Dogecoin and others. Interactive Brokers provides a whole range of other tradable securities, giving you access to securities across the world.
5. Bitcoin ATMs
Best for: Investors who prefer cash or convenience
Average cost to buy: About 20 percent or more
Another option is to buy bitcoins directly through a Bitcoin ATM, though you’re likely to pay much more in commissions than you would elsewhere. You’ll be able to buy bitcoins, and some ATMs will allow you to sell them, too, using cash or a debit card. But you may need a Bitcoin wallet to make the transaction. Commissions can be pricey, with some ATMs charging around 20 percent per transaction, while the fees at others may stretch into the teens.
Buying Bitcoin: Here’s what to watch for
As you’re considering how to buy Bitcoin, you’ll want to evaluate the following factors, since they should influence your choice of where to buy it or whether to ultimately avoid it altogether.
Ownership: What do you want to own exactly? You can own Bitcoin directly (say, through an ETF) or a derivative such as a futures contract, which offers a return on the currency’s movement.
Upside/downside: Your potential gain is related directly to whether you own the currency directly or via futures contract. By owning Bitcoin directly, your profit increases by a dollar with every dollar increase in the currency. In contrast, with futures, you can gain much more quickly without having to front as much capital. However, your downside is more limited by owning directly, while you can lose more money with futures.
Cost: Commissions can vary widely depending on how you purchase Bitcoin. Futures contracts get you a big piece of the action relatively cheaply, while some brokers may charge you several percent to buy directly. A few percent might not sound like a lot, but if you’re trading in and out of the market, it will quickly eat away at your profits. In contrast, a Bitcoin ETF gets you in the game quickly with no direct commission and a low annual expense ratio, and it’s simpler to trade that way, too.
Security: One of the biggest concerns with any investment is making sure that it’s secure. Some newer cryptocurrency players have had serious problems with security. For example, hackers stole $1.5 billion in Ethereum from ByBit earlier this year. More traditional brokers may offer better security because they’ve been dealing with the issue for much longer. And with Bitcoin ETFs, the fund company manages security, making it an easy way to own the cryptocurrency.
You may also receive bitcoins as part of commercial transactions. Regardless of how you came by your coins, any transaction in the cryptocurrency is reportable to the IRS at tax time.
What do you need to buy Bitcoin?
When you open an account at a traditional brokerage or a crypto exchange, you’ll need to provide basic personal information.
Your name, address, and phone number
Your Social Security number
Your bank account number
You may also have to detail how much trading experience you have and how comfortable you are with trading, depending on the institution.
This information allows the firm to identify you and verify who you are. It’s also vital during tax time when the broker or exchange prepares documents on your gains and losses, reports that you’ll need to accurately file your taxes.
Where is the best place to store bitcoins?
Where you store your Bitcoin depends on what you want to do with it. Frequent traders might keep it on an exchange or with a broker, while long-term investors or spenders might opt for a crypto wallet. Note that a crypto wallet is entirely your responsibility. If you’re not careful about security, you could wind up losing your cryptocurrency.
Two popular options for this latter group include hot wallets and cold wallets.
A hot wallet allows your cryptocurrency to be used or moved around easily. Because your coins are secured by software rather than hardware and are still connected to the internet, they’re less secure than cold wallets. But if you’re using a wallet because you intend to use the cryptocurrency, it makes sense to go with a hot wallet. Hot wallets come in a few varieties.
Desktop wallets: You can download wallet software to your computer and manage your crypto holdings from there. When you’re done transacting, you can even take it offline, increasing your security.
Web wallets: This browser plug-in allows you to connect to the blockchain and make transactions quickly, but the internet connection makes it less secure.
Mobile wallets: You can use software on a mobile device if you’re using crypto to pay or transact.
Some providers of hot wallets also offer multiple types of hardware wallets, so you can use one software type across multiple devices. Some options include:
MetaMask — browser-based and mobile using the Ethereum blockchain
Trust Wallet — mobile and browser extension (owned by Binance)
Coinbase Wallet — stand-alone mobile app and browser extension (separate from the Coinbase exchange)
A cold wallet is more valuable if you really want to lock down your cryptocurrency and make it nearly impervious. A cold wallet relies on hardware, a physical device, to secure your holdings, and it looks like a USB thumb drive. This can be disconnected from the internet, making your holdings very secure. When you’re ready to transact, you can plug it in and conduct business.
While more secure than a hot wallet, a cold wallet has other potential risks, including theft of the device, loss of the wallet and even loss of the password. So even cold wallets are not foolproof. Some options include:
Ledger — offline storage with high security
Trezor — user friendly
Coldcard — secure Bitcoin-only wallet
FAQs
Fees for buying Bitcoin vary depending on how you buy it. Crypto exchanges might charge 0.1 percent to 2 percent per trade; brokerages and trading apps may charge no fee but add a spread markup; Bitcoin ETFs cost around 0.25 percent to 1.5 percent annually.
Experts say there’s little evidence to support the assertion that Bitcoin acts as a hedge against inflation. It’s too new and too volatile to provide much stability. Bitcoin is more like a risky tech stock than a stalwart that zigs when the market zags.
Yes. You can sell your Bitcoin for a fiat currency like U.S. dollars, transfer it to your bank account or linked card.
Bottom line
If you’re looking to purchase Bitcoin or other digital currencies as an investment, it’s important to keep costs to a minimum. Given the novelty of the crypto market, many brokers would love to maximize their commissions (in contrast to the stock market, where trading fees have gone to zero). Those fees eat into your profits, so look for a way to minimize those frictional costs. But the introduction of Bitcoin ETFs provides a cheaper and more secure way for traders to gain exposure to the cryptocurrency.
While the price of Bitcoin has run high quickly, it still carries serious risks that make it not suitable for everyone. Those looking for conservative investments or who cannot afford to lose money should consider avoiding Bitcoin or trading only with an amount they are willing to lose.
— Kim Husband contributed to an update.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
There are now several easy ways to buy Bitcoin, including apps, crypto exchanges, brokers and Bitcoin ATMs.
Costs, security and type of ownership are top considerations. For instance, crypto exchanges might offer lower costs, traditional brokers might provide better security and ETFs give you easy exposure but not direct ownership of Bitcoin.
Bitcoin is too risky to be suitable for all investors. It’s highly volatile and not a reliable hedge against inflation.
Bitcoin has seen dramatic price swings since its 2009 debut that have created fortunes for some investors and great losses for others. If you’re considering investing in Bitcoin, you have options, including Bitcoin ETFs that make it possible to invest without actually owning the tokens themselves.
Here are five ways to buy bitcoins and some key factors that you need to watch.
What is Bitcoin?
Bitcoin is the world’s most popular cryptocurrency — a currency that exists only virtually — with a market cap close to $2 trillion. Bitcoin debuted in 2009 and really broke into mainstream consciousness in 2017 with its rapid rise that year. Coins are created, or “mined,” when computers that organize the currency process and legitimize transactions in the currency.
Bitcoin uses a decentralized network of computers to manage everything — a distributed ledger called a blockchain that tracks transactions in the currency. It’s like a huge public record of every transaction that has taken place in the currency. And the network monitors everything, ensuring the currency’s integrity and the ownership of bitcoins.
How to buy Bitcoin: 5 methods
If you’re looking to trade Bitcoin, the good news is that you now have several options and don’t need a specialized account unless that’s the route you prefer. Each method offers a different combination of cost, security and potential upside and downside.
Method
Best for
Average cost
Financial apps
Casual or beginner investors
$0.49 for trades < $5; fees rise from there
Crypto exchanges
Intermediate or active crypto investors
Fees start at 0.10%
Trading apps
Beginner or intermediate investors; passive traders
No direct commission, but traders pay spread markup
Traditional brokers
Investors who are comfortable trading in Bitcoin futures
$0 or low fee + percentage of trade value
Bitcoin ATMs
Investors who prefer cash or convenience
About 20% or more
1. Financial apps
Best for: Casual or beginner investors who might already be using a financial app
Average cost to buy: $0.49 for trades < $5; fees rise from there
Many financial apps such as PayPal and Venmo now allow you to trade cryptocurrency.
PayPal makes it tremendously easy to directly buy or sell bitcoins using the same app that you’ve come to trust with your online payments. You’ll pay $0.49 for trades involving less than $5, and the fees rise from there. Trades involving $200.01 to $1,000 cost 1.8 percent, while those above $1,000 come in at 1.5 percent. There’s a spread markup on trades, but you won’t pay a fee for holding cryptocurrency in your account, and you can trade as little as $1 at a time. Ethereum, Litecoin, Bitcoin Cash, Solana and Chainlink are also tradable here, as is a PayPal stablecoin.
Venmo charges the same fees, since it’s owned by PayPal.
2. Crypto exchanges
Best for: Intermediate or active crypto investors who want more control over their assets or a wider coin selection
Average cost to buy: Fees start at 0.10 percent
Crypto exchanges are another popular option for those looking to buy Bitcoin. Exchanges offer a few key advantages to traders. First, the best crypto exchanges offer among the lowest possible all-in costs for trading cryptocurrency. So they’re a good bet if cost is your key objective. Second, many exchanges don’t charge spread mark-ups, which are hidden fees built into the trading prices. Third, many exchanges offer wallets, allowing you to securely store your cryptocurrency.
The fees at various crypto exchanges can differ markedly, so it’s worthwhile looking around to find which offers the best combination of price, crypto choice and service. Popular options include Binance, Crypto.com and Kraken.
3. Trading apps
Best for: Beginner or intermediate investors; passive traders who like a simple interface
Average cost to buy: No direct commission, but traders pay spread markup
You can pick up a few bitcoins with no direct commission by using a trading app such as Webull or Robinhood, though you’ll end up making up for it with a spread markup. These apps also allow you to purchase Bitcoin ETFs.
Robinhood takes its best trick — no commissions — and applies it to cryptocurrency, but it does charge a spread markup, the exact cost of which it does not reveal. You’ll be able to buy bitcoins directly and will have access to other digital currencies, too. Of course, you’ll be able to buy stocks, ETFs and options while you’re on the easy-to-use platform, including Bitcoin ETFs.
Webull lets you trade a handful of cryptos, including Bitcoin. You’ll pay a spread markup of 1 percent on each transaction, however. You can also trade stocks, Bitcoin ETFs and options.
4. Traditional brokers
Best for: Investors who are comfortable trading in Bitcoin futures rather than the cryptocurrency itself
Average cost to buy: $0 or low fee + percentage of trade value
Some traditional brokers have also ventured into the cryptocurrency arena, including Interactive Brokers and Charles Schwab. And with the introduction of Bitcoin ETFs, major brokers offer funds that let you buy the crypto, too.
At Interactive Brokers, you’ll be able to buy futures contracts on Bitcoin as well as trade the coin directly. The broker charges $5 per futures contract, which gives you exposure to five bitcoins. If you want to trade Bitcoin directly, you’ll pay a competitive commission of 0.12 to 0.18 percent of your trade value, depending on your monthly volume. You’ll also have access to Ethereum, Solana, Dogecoin and others. Interactive Brokers provides a whole range of other tradable securities, giving you access to securities across the world.
5. Bitcoin ATMs
Best for: Investors who prefer cash or convenience
Average cost to buy: About 20 percent or more
Another option is to buy bitcoins directly through a Bitcoin ATM, though you’re likely to pay much more in commissions than you would elsewhere. You’ll be able to buy bitcoins, and some ATMs will allow you to sell them, too, using cash or a debit card. But you may need a Bitcoin wallet to make the transaction. Commissions can be pricey, with some ATMs charging around 20 percent per transaction, while the fees at others may stretch into the teens.
Buying Bitcoin: Here’s what to watch for
As you’re considering how to buy Bitcoin, you’ll want to evaluate the following factors, since they should influence your choice of where to buy it or whether to ultimately avoid it altogether.
Ownership: What do you want to own exactly? You can own Bitcoin directly (say, through an ETF) or a derivative such as a futures contract, which offers a return on the currency’s movement.
Upside/downside: Your potential gain is related directly to whether you own the currency directly or via futures contract. By owning Bitcoin directly, your profit increases by a dollar with every dollar increase in the currency. In contrast, with futures, you can gain much more quickly without having to front as much capital. However, your downside is more limited by owning directly, while you can lose more money with futures.
Cost: Commissions can vary widely depending on how you purchase Bitcoin. Futures contracts get you a big piece of the action relatively cheaply, while some brokers may charge you several percent to buy directly. A few percent might not sound like a lot, but if you’re trading in and out of the market, it will quickly eat away at your profits. In contrast, a Bitcoin ETF gets you in the game quickly with no direct commission and a low annual expense ratio, and it’s simpler to trade that way, too.
Security: One of the biggest concerns with any investment is making sure that it’s secure. Some newer cryptocurrency players have had serious problems with security. For example, hackers stole $1.5 billion in Ethereum from ByBit earlier this year. More traditional brokers may offer better security because they’ve been dealing with the issue for much longer. And with Bitcoin ETFs, the fund company manages security, making it an easy way to own the cryptocurrency.
You may also receive bitcoins as part of commercial transactions. Regardless of how you came by your coins, any transaction in the cryptocurrency is reportable to the IRS at tax time.
What do you need to buy Bitcoin?
When you open an account at a traditional brokerage or a crypto exchange, you’ll need to provide basic personal information.
Your name, address, and phone number
Your Social Security number
Your bank account number
You may also have to detail how much trading experience you have and how comfortable you are with trading, depending on the institution.
This information allows the firm to identify you and verify who you are. It’s also vital during tax time when the broker or exchange prepares documents on your gains and losses, reports that you’ll need to accurately file your taxes.
Where is the best place to store bitcoins?
Where you store your Bitcoin depends on what you want to do with it. Frequent traders might keep it on an exchange or with a broker, while long-term investors or spenders might opt for a crypto wallet. Note that a crypto wallet is entirely your responsibility. If you’re not careful about security, you could wind up losing your cryptocurrency.
Two popular options for this latter group include hot wallets and cold wallets.
A hot wallet allows your cryptocurrency to be used or moved around easily. Because your coins are secured by software rather than hardware and are still connected to the internet, they’re less secure than cold wallets. But if you’re using a wallet because you intend to use the cryptocurrency, it makes sense to go with a hot wallet. Hot wallets come in a few varieties.
Desktop wallets: You can download wallet software to your computer and manage your crypto holdings from there. When you’re done transacting, you can even take it offline, increasing your security.
Web wallets: This browser plug-in allows you to connect to the blockchain and make transactions quickly, but the internet connection makes it less secure.
Mobile wallets: You can use software on a mobile device if you’re using crypto to pay or transact.
Some providers of hot wallets also offer multiple types of hardware wallets, so you can use one software type across multiple devices. Some options include:
MetaMask — browser-based and mobile using the Ethereum blockchain
Trust Wallet — mobile and browser extension (owned by Binance)
Coinbase Wallet — stand-alone mobile app and browser extension (separate from the Coinbase exchange)
A cold wallet is more valuable if you really want to lock down your cryptocurrency and make it nearly impervious. A cold wallet relies on hardware, a physical device, to secure your holdings, and it looks like a USB thumb drive. This can be disconnected from the internet, making your holdings very secure. When you’re ready to transact, you can plug it in and conduct business.
While more secure than a hot wallet, a cold wallet has other potential risks, including theft of the device, loss of the wallet and even loss of the password. So even cold wallets are not foolproof. Some options include:
Ledger — offline storage with high security
Trezor — user friendly
Coldcard — secure Bitcoin-only wallet
FAQs
Fees for buying Bitcoin vary depending on how you buy it. Crypto exchanges might charge 0.1 percent to 2 percent per trade; brokerages and trading apps may charge no fee but add a spread markup; Bitcoin ETFs cost around 0.25 percent to 1.5 percent annually.
Experts say there’s little evidence to support the assertion that Bitcoin acts as a hedge against inflation. It’s too new and too volatile to provide much stability. Bitcoin is more like a risky tech stock than a stalwart that zigs when the market zags.
Yes. You can sell your Bitcoin for a fiat currency like U.S. dollars, transfer it to your bank account or linked card.
Bottom line
If you’re looking to purchase Bitcoin or other digital currencies as an investment, it’s important to keep costs to a minimum. Given the novelty of the crypto market, many brokers would love to maximize their commissions (in contrast to the stock market, where trading fees have gone to zero). Those fees eat into your profits, so look for a way to minimize those frictional costs. But the introduction of Bitcoin ETFs provides a cheaper and more secure way for traders to gain exposure to the cryptocurrency.
While the price of Bitcoin has run high quickly, it still carries serious risks that make it not suitable for everyone. Those looking for conservative investments or who cannot afford to lose money should consider avoiding Bitcoin or trading only with an amount they are willing to lose.
— Kim Husband contributed to an update.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
