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The Super-Simple Bitcoin Buying Guide

The cryptocurrency market is highly volatile and you should never invest more than you can afford to lose. 

If you’ve decided to take the plunge and buy Bitcoin, this is the easiest step-by-step guide on how to do it.

Bitcoin has taken some big hits and made some big gains over the past year and the value keeps on going up. Since Bitcoin was originally untrackable, the Federal government has decided to get their hands on it and track it as much as they can. Expect their rules and regulations to tighten over time. Usually, a driver’s license will be required and an authenticated form of payment required as well such as a debit card or credit card. I’ll get more into this below

Choose your exchange

I researched quite a few exchanges before I made my first Bitcoin purchase. I made sure the company I was going to buy from was legit. Previous breaches were taken into consideration, if any. Feedback and ratings from users who have purchased Bitcoin from different exchanges and read about the recommended exchanges from forums and websites.

Keep in mind, cryptocurrencies are still a new form of trading and there are many scams out there. I have filtered out the scam exchanges for you so you don’t have to.

The exchanges you can buy Bitcoin from are not all located in the United States. For obvious reasons, I went with a local exchange in the US that’s based out of San Francisco that’s insured. I did this so I don’t have to pay any foreign exchange fees, like transferring the Dollar to the Euro or others. Also, because I trust US-based companies more than an exchange in China. If you get screwed over by an exchange in China there’s not much you can do.

The third factor I took into consideration was the fees I will pay to buy Bitcoin. I obviously wanted to pay as little as possible but not go to so cheap where I started using shady exchanges with no reputation. If you’re paying upwards of 10% in fees just to buy Bitcoin, you’re getting ripped off.

The exchange I finally decided to use was Coinbase. This exchange was one of the easiest to use for newbies and it’s basically the go-to website for people looking to buy Bitcoin. If you use my link and purchase $100 worth of Bitcoin, you get an extra $10 worth of Bitcoin free!

How much do you want to spend?

This is a big factor people consider when investing in Bitcoin. Currently, 1 coin costs roughly $4,000 and the price is climbing daily. Back when Bitcoin was first created you could get a coin for less than 1 cent. How’s that for a return on investment? Wish I would have invested then..

There have been many analysts and traders speculating that bitcoin will surpass $10,000 and maybe eventually $20,000 or more in the coming years. While no one can predict the future, this is a pretty great return on investment if it’s true.

Currently, Coinbase sets a limit on how much you can purchase. If you use a credit card, you can buy $100 a week. If you use a debit card, you can buy $1,000 per week. These numbers are updated daily so you don’t have to wait another week to buy the full amount if that’s what you are planning on doing.

There used to be no limit on how much you can buy. More and more limits are being enacted with exchanges due to the federal government getting involved and starting to regulate Bitcoin and all cryptocurrencies in general.

Now that you’ve read the basics, here’s the how-to:

First, you will go to Coinbase. It will look like this:

First page on Coinabase website

You will need to create an account and verify it with your email. I suggest picking a strong password and an email where no one else has the login info but you. Also, it’s best to use an email that’s not used for anything else for security reasons.

Once you validate your email, you’ll be prompted to specify what type of account you’ll have. You’ll select “individual“.

 

Individual Account

 

You will also need to verify a phone number.

Doing this is in your best interest. If someone were to try to log in your account from your computer when you’re not around, they will need a pin number that’s automatically sent to your phone. Without your phone, no one can login to your account. Treat your Coinbase account like your bank account.

Next, you will have to verify a card you want to use. This may take a week or so. Once you enter your debit card info, you will be charged 2 amounts on your statement. Once those go pending on your account, Coinbase will ask you the amounts and you have to tell them.

This is to verify you have complete access to your bank account and it is not lost or stolen. These amounts will be around a dollar. Such as $1.13 and $1.72. They will not post to your account and you will not have to pay the amounts, just verify the amounts. Coinbase will send you an email to enter the 2 amounts. It may take up to a week to get the email.

  • You can purchase up to $100 a week with a verified credit card
  • You can purchase up to $1,000 a week with a verified debit card

Once you do this you will have an option to buy Bitcoin with the card you just verified. If it is a debit card, you will have a limit of $1,000 per week. If you buy $1,000 on Monday, on Tuesday you will be allowed to buy more. The max is based on time and is constantly updating every minute. You do not have to wait until the following Monday to buy $1,000 again. Yet, you can’t buy a full $1,000 until the following Monday so it will have to be in increments.

The max purchase amount will increase when you buy more Bitcoin.

 

Choose what account you want

This verification process may take a week or more. Mine took about 2 weeks to verify because I had to do it twice.

Most newcomers buying Bitcoin are a little nervous and confused. Since most people don’t know what Bitcoin is or how it works, what is this company doing that will allow me to buy it? Coinbase is essentially a broker like you would use when trading for your retirement account. Except you are buying Bitcoin and not stocks, futures, or other tradeable units.

Once you’re in and you’ve verified your form of payment you can now purchase Bitcoin. As mentioned earlier, there is a cap on how much you can purchase per week.

This is the Coinbase dashboard:

Coinbase buy/sell image

 

From here you can see the current going rate for Bitcoin, Ethereum, and Litecoin. These rates are all per coin.

Once you click the buy/sell tab, you are brought to the buy/sell screen. Here you can sell your Bitcoin or purchase more. Also, it will ask what form of payment you want to use. And how much you are eligible to purchase depending on how much you’ve spent for the week.

When you purchase Bitcoin it can take a few days to deposit into your wallet. The price you purchased at is locked in and will not vary even if the Bitcoin price goes up or down before it is deposited into your account.

There will be a breakdown of how much you are buying

Bitcoin breakdown when purchasing

If you plan on buying a lot of Bitcoin I suggest buying it all at once. You will pay a smaller percentage in fees the more you buy in one purchase. As you can see here, it’s almost a 10% fee for buying $20 worth of Bitcoin. When you buy $100 worth it will be close to 1-5%.  There will also be a date when your Bitcoin will be available based on when you purchase it above the cost breakdown.

This is the basic guide on how to purchase Bitcoin. And I hope it helped you out. If you have any questions, as I’m sure you do, don’t hesitate to ask and comment below.

Did this guide help? Comment below.

Edit: While this guide is 100% accurate, Coinbase has revised their process of buying Bitcoin and may have eliminated some of these steps.

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