How to Buy Bitcoin in the US, Legally
The United States is one of the most developed countries in terms of Bitcoin network structure. Bitcoin has been in use in the U.S.A. since its origin. It has not always been recognized as a legal currency, but its decentralized nature makes it difficult for the government to control its use.
The U.S. is one of the top destinations for Bitcoin and other cryptocurrencies. So, naturally, it should be relatively easy to purchase there. There are many options for buying BTC – bank card, gift card, PayPal, or cash. And, there are a lot of different ways to do it – exchanges, certificates, or peer-to-peer. Let’s take a look at how to legally buy Bitcoin in the U.S.A.
Where to Buy Bitcoin in USA
The first step is to consider the type of service you need. The list above gives you a list of exchanges. Below is an overview of categories to keep in mind.
- Open exchanges – load money into a trading account, and browse the listings for a good price. Potentially one of the most cost-effective options, but it can be hard to find a full-service exchange that accepts credit cards. You might also have relatively low limits until you can prove your creditworthiness on the exchange (e.g. CEX.IO, Changelly, VirWox).
- Bitcoin brokers – these sellers can accept a range of payment options, including credit cards. It can be a quick and simple way of buying BTC, but not necessarily the most cost-effective (e.g. Coinmama, Coinbase).
- Peer-to-peer exchanges – buyers and sellers match one-on-one and make transfers in a way that suits them. However, not all sellers will accept credit card payments, especially if you have yet to develop a good reputation on that site (e.g. LocalBitcoins, Paxful).
A cryptocurrency exchange is one of the best ways to buy Bitcoin in the U.S.A. If you want to trade professionally and want access to fancy trading tools, you will likely want an exchange that requires you to verify your ID to open an account. If you just want to make occasional, straightforward trades, there are also platforms that you can use that do not require an account.
If you are ready to purchase BTC, make sure you check your preferred cryptocurrency exchange and make sure there is no restriction on U.S. residents as only certain exchanges let users from the United States buy or sell Bitcoins. In order to trade on crypto exchanges, you need to deposit USD to the account. The cheapest way to do this is with a bank wire transfer or make your purchase using a credit card.
CEX.io is a cryptocurrency exchange available to customers in the United States where you can buy BTC with ACH bank transfer, SEPA transfer, visa card, cash, or AstroPay. CEX.io is a safe exchange. The platform lets users easily trade fiat money with cryptocurrencies and conversely cryptocurrencies for fiat money. For those looking to trade Bitcoins professionally, the platform offers personalized and user-friendly trading dashboards and margin trading. Alternatively, CEX also offers a brokerage service which provides novice traders an extremely simple way to buy BTC at prices that are in line with the market rate.
CoinMama is available to customers across the United States and in virtually every country in the world. This platform is great for those who want to make instant straightforward purchases of digital currency using their local currency.
One nice thing about CoinMama is the anonymity: if you’re buying less than $150 USD worth of Bitcoins, then you won’t need to verify your identity. It’s ideal for small, anonymous purchases – but the high fees make larger purchases relatively expensive.
Indacoin is a London-based cryptocurrency exchange founded in 2013. It lets you buy BTC with debit card or credit card without having to verify your identity. Indacoin also offers a trading platform where you can buy and sell Bitcoin, Litecoin and Ethereum with other users around the world. The amount you can transfer is capped by Indacoin’s monthly limit. For example, in the first month you can buy as much as US$5,000 in BTC, even though you may have to make small purchases to get up to that amount.
Coinbase is one of the most popular cryptocurrency exchanges in the United States that charges a small fee for all transactions. Users can purchase BTC, Ether and now Litecoin from Coinbase through a digital wallet available on Android & iPhone or through trading with other users on the company’s Global Digital Asset Exchange (GDAX) subsidiary.
American customers have one additional payment method they can use to save fees. You can connect your bank account to pay a 1.49% transaction fee. With this method, however, it takes about 5 days for your coins to be delivered.
Kraken is one of the EU’s most popular crypto exchanges, and it has particularly strong liquidity in the EUR/BTC pair. However, the exchange also serves customers from around the world, including the United States. You can make deposits through a bank wire, SEPA, and SWIFT.
It’s also possible to trade digital currencies other than Bitcoin like Ethereum, Monero, Ethereum Classic, Augur REP tokens, ICONOMI, Zcash, Litecoin, Dogecoin, Ripple and Stellar/Lumens. For more experienced users, Kraken offers margin trading and a host of other trading features. Kraken is a great choice for experienced traders.
GDAX is a cryptocurrency exchange owned and operated by Coinbase. It is one of the largest and most popular BTC exchanges in the United States. It gives you a diverse range of transfer options – including SEPA or bank wire – combined with good prices and low fees. GDAX has an overly complex interface that can scare away newbies, but it has become easier to use over the years.
Gemini is a fully regulated licensed US cryptocurrency exchange. It means that Gemini’s capital requirements and regulatory standards are similar to a bank. Also, all US dollar deposits are held at an FDIC-insured bank and the majority of digital currency is held in cold storage. Gemini trades in three currencies, US dollars, BTC, and Ether. You can make a deposit using a wire transfer, SEPA, or ACH transfer.
One restriction with Gemini is that it only accepts customers in 44 states. They’re currently seeking regulatory approval in the remaining 6 States: Alaska, Hawaii, Washington, Oregon, Arizona, and Wisconsin.
P2P Crypto Exchanges don’t hold your money, they just work as an intermediary to get you in contact with a buyer/seller and provide some basic tools to make your trade more secure.
LocalBitcoins is an escrow service which helps to match Bitcoin buyers and sellers. With LocalBitcoins, you can meet up with people in your local area and buy or sell BTC in cash, send money through PayPal, Skrill, or Dwolla, or arrange to deposit cash at a bank branch. The service only take a commission of 1% from the seller who sets their own exchange rate.
Buying coins via an in-person meeting, secured and facilitated by LocalBitcoins, may be one of the fastest and most private ways to buy BTC in any country.
Paxful is a peer-to-peer marketplace that allows buyers and sellers to interact after posting trade offers. The site operates as a mediator between interested parties and provides a space for its users to interact. The platform is user friendly and offers the most diverse range of payment methods available online. Payment options include bank transfer, credit or debit card, PayPal, MoneyGram, and Skrill. In addition to these methods, users can also choose to make purchases by using any of a huge number of gift cards such as Amazon and iTunes. These options make Paxful a handy location for buying and selling BTC.
Bitsquare.io has an open source peer-to-peer system that allows anyone to sell BTC in exchange for fiat currency, like US Dollars, Euros or Yen, and alternative cryptocurrencies. With anonymity as a part of the platform, you are not forced into submitting identification, a passport, or even your legal name in order to start trading through them.
Every transaction is unique and your identity is kept safe. When a seller decides to part ways with their BTC, they would need to deposit this into their Bitshares wallet and would need to create an offer that is broadcast to everyone, or the buyer can easily take an order that was previously posted by another buyer. Now once that offer is seen by someone that is interested in it and accepts it, the trade will begin.
Bitsquare never holds user funds and no one except trading partners exchange personal data. The platform offers great security with multisig addresses, security deposits and a purpose-built arbitration system in case of trade disputes.
Buy Bitcoin from a friend
If your friend has some spare BTC that he/she wants to sell, you can easily buy them. All you need is to have a wallet where your friend can transfer the BTC to you. And you can pay via any means by which the two of you agree. This is probably the cheapest way to buy BTC as you don’t need to pay any fee.
How to Buy Bitcoin with PayPal?
Casual investors would simply like to acquire coins by using payment methods that they are comfortable with, such as PayPal. However, acquiring BTC with PayPal can be deceptively complicated. There are no ways through which you can buy BTC using PayPal directly; currently, there simply isn’t any support for it. Thankfully, though, there are some ways to work around that and there are marketplaces online that allow Bitcoins to be purchased with PayPal. One major explanation is the fact that cryptocurrency is in direct competition with PayPal. Cryptocurrency also don’t allow chargebacks, and fake or even fraudulent charges are frequent due to Bitcoin accounts being constantly targeted by hackers and scammers.
There are exchanges out there that allow you to make such purchases, however, many of these exchanges place holds onto a user account until certain verifications are passed. It should be noted that PayPal doesn’t exactly appreciate users buying BTC through their platform, and it might occasionally scold users who try to do so. PayPal terms of service allows for the use of Second Life Lindens, or SLLs, to make cryptocurrency purchases. Thanks to this, several exchanges have sprung up that provide SLL services.
Virwox is a virtual currency exchange set up in late 2007 for the purpose of trading Second Life Lindens (SLL) and other virtual currencies used in online gaming.
You need to set up a wallet, visit VirWox and open up an account, fill in the appropriate information boxes, and confirm your account via email. Then, you can deposit money into your VirWox account through PayPal. After this, you will have the option of exchanging your balances for SLL, after which an option to convert SLL to BTC will be presented to you. Generally, VirWox will place a 10 percent transaction fee on users due to PayPal. Unfortunately, the fee is inevitable. After purchasing BTC through VirWox, it is recommended that you transfer your coins to your personal wallet. Transfers to wallets usually take up to two days.
LocalBitcoins is a highly reputable cryptocurrency exchange platform used all over the world. It provides a virtual setting through which buyers can connect with sellers and conduct their exchanges through a variety of payment platforms, including PayPal.
If you decide to utilize LocalBitcoins, you would have to find and connect with an individual who is willing to accept PayPal as a form of payment for BTC. LocalBitcoin users are responsible for conducting their own due diligence pertaining to the sellers that they communicate with.
Paxful is a service that allows users to create accounts, find sellers, and exchange funds in PayPal accounts for BTC. What’s great about Paxful is that it uses an escrow service to provide additional security for buyers.
Wirex is a company that supplies virtual and physical Bitcoin debit cards. Since it’s just like any other debit card you can use Wirex’s card with your PayPal account. In order to buy BTC with your Wirex debit card. Be prepared that it might require a long time to complete (around 10 days).
How to Buy Bitcoin with a Credit Card?
Buying BTC with a credit card is confusing and sometimes even hard. And there are multiple US banks like JPMorgan Chase, Bank of America, Citi and Capital One that currently prohibit using their credit cards for buying cryptocurrency. It happened over fears that credit card users may run up debt if the prices of cryptocurrencies drop. It is recommended to check with your bank to see if they provide this option, or if it is banned before conducting any transactions.
Each service might have its own restrictions around paying by card, which can affect how long it takes and how cost-effective it is. In particular, you should note that buying cryptocurrency will likely count as a cash advance, with commensurately high interest rates. You’ll want to make sure you can pay off the purchase.
However, there are some exchanges that allow you to use your credit card for buying BTC.
|Cryptocurrency Exchange||Deposit Method||Fiat Currency|
|Coinbase||Credit card, Debit card||AUD, USD, EUR, GBP, CAD, CNY & 50+ more|
|CEX.IO||Credit card, Debit card, SWIFT, SEPA, Cryptocurrency||USD, EUR, RUB, GBP|
|Coinmama||Cash, Credit card, Debit card||USD, EUR|
|xCoins P2P Bitcoin Lending||Bank account, Credit card, Debit card, eCheck, PayPal||USD|
|Bitit Cryptocurrency Marketplace||Credit card, Debit card, Neosurf, Cashlib, Trustpay, ePay||USD, EUR, GBP, JPY, CNY, KRW, AUD, CAD, DKK, NOK, SEK, TRY, HKD, SGD|
|VirWox Virtual Currency Exchange||Credit card, Debit card, OKPAY, PayPal, Skrill, SOFORT||EUR, USD, CHF, GBP|
|bitFlyer||Cryptocurrency, Credit card, Bank transfer, Wire transfer||USD, EUR, JPY|
|Exmo||Credit card, Debit card, Cryptocurrency, Perfect Money, SEPA, Wire Transfer, Payza, CryptoCapital, Money Polo, Payeer, Giropay, Yandex Money & more||USD, EUR, RUB, PLN, UAH|
|Changelly Crypto-to-Crypto Exchange||Credit card, Debit card||USD, EUR|
|Paxful||Cash, Credit card, Cryptocurrency, Debit card, Flexepin, Neosurf, Neteller, M-PESA, PayPal, Perfect Money, WebMoney, Western Union, iDEAL, SEPA, Skrill, SWIFT||AUD, USD, EUR, GBP, CAD, CNY & 50+ more|
Where to Buy Bitcoin Instantly
BitQuick is one of the fastest ways to buy BTC in the United States with a cash deposit. Users can browse a wide range of offers at various prices. Once a desired offer is found, buyers go to the bank and make a cash deposit into the seller’s account. Buyers then usually receive their coins within an hour.
You can use our ATM map to buy cryptocurrency. It is a quick and easy way to buy BTC and they’re also private. That convenience and privacy, however, comes with a price; most ATMs have fees of 5-10%.
CoinBTM is a New York-based Bitcoin ATM provider with over 30 machines across NY and New Jersey. Buying at cypto ATMs offers high privacy; only your phone number is required. This option is one of the most expensive ways to purchase BTC.
If you want to purchase BTC in the United States, make sure you check your preferred crypto exchange to make sure there is no restriction in your state. The treatment of cryptocurrencies is different in each State, as the regulations concerning Bitcoin are different, and/or nonexistent.