How To Buy Bitcoin: Step-by-Step Guide for Beginners

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Bitcoin was the first cryptocurrency and remains the most well-known today. While its price is highly volatile, many investors are drawn to its potential for growth. If you’re considering adding Bitcoin to your portfolio, this beginner-friendly guide will show you how to buy Bitcoin safely and strategically.

How To Buy Bitcoin: Step-by-Step Guide

There are several ways to buy Bitcoin. Below is a simple step-by-step guide for beginners.

Step 1: Choose Where To Buy Bitcoin

First off, you need to determine how to buy Bitcoin. Fortunately, there are a few different ways to do this.

• Cryptocurrency exchanges: This is the most popular method. Platforms like Coinbase, Kraken and Binance let you trade Bitcoin easily.
  • There are two types of cryptocurrency exchanges:
    • Centralized exchanges (e.g., Coinbase, Kraken) act as intermediaries and are beginner-friendly.
    • Decentralized exchanges (e.g., Blocknet, AirSwap) enable peer-to-peer trades without a middleman but may require more technical knowledge.
• Traditional brokers: Some stockbrokers, like Fidelity and Robinhood, offer Bitcoin trading. These are simple to use but often have fewer crypto options.
• Bitcoin ATMs: Physical machines for buying or selling Bitcoin. According to Coin ATM Radar, there are over 37,000 ATMs of this sort in the U.S.
• Bitcoin futures: This option is for pros and is offered by firms like TradeStation. It lets you trade Bitcoin futures.
• Peer-to-peer sales: Buy directly from other Bitcoin holders using platforms like Bitquick or Bisq. Be cautious, as this method lacks third-party protections.

Popular Crypto Exchanges To Know

Coinbase, Kraken, Binance and Gemini are some of the more popular cryptocurrency exchanges.

• Coinbase is known for its beginner-friendly interface.
• Kraken provides advanced tools for experienced traders.
• Binance supports a wide variety of cryptocurrencies.
• Gemini emphasizes strong security measures and compliance with regulations.

When choosing an exchange, consider the fees they charge, as these can vary for trades and withdrawals.

Security is also important, so look for platforms with strong encryption and two-factor authentication.

Don’t forget that user experience matters — a simple and intuitive interface can make managing your crypto investments much easier.

Step 2: Create an Account To Buy Bitcoin

To set up an account on a cryptocurrency exchange, you can follow these points:

• Provide personal information like your name, email address and sometimes a government-issued ID for verification.
• Choose a strong password that is hard to guess, combining letters, numbers and special characters.
• Enable two-factor authentication for added security. This provides an extra layer of protection by requiring a code from your phone or email in addition to your password.

Step 3: Deposit Funds To Buy Bitcoin

To deposit funds, you can typically use methods like bank transfers, credit or debit cards and PayPal.

Each method has different processing times. For example, bank transfers might take a few business days, while PayPal and card payments can be faster.

Keep In Mind

Some methods may charge a small percentage or flat fee for transactions.

Be sure to review the platform’s details on deposit fees and times before choosing your deposit method.

Step 4: Place Your Bitcoin Order

Once you have linked your wallet to the exchange, you must select the number of Bitcoins you want to purchase. You can buy the cryptocurrency in fractions, allowing you to purchase exactly the amount you want.

Once you know the amount of Bitcoin you want to buy, decide on the type of order:

• Market order:
  • Lets you buy Bitcoin immediately at the current market price.
  • This method is fast but might cost slightly more if prices are changing quickly.
• Limit order:
  • Lets you set the price you’re willing to pay, and the order will only go through if the market reaches that price.
  • While limit orders give you more control, they may take longer to complete or might never go through if the price doesn’t reach your set amount.

Step 5: Store Your Bitcoin After You Buy It

You can store Bitcoin in a hot or cold wallet. Hot wallet transactions are quicker, while those in cold wallets have extra steps to maintain security.

Hot Wallet

Hot wallets are connected to the internet and are typically offered for free by crypto exchanges. They’re easy to use and give you quick access to your funds via apps or web platforms.

Popular hot wallets include Coinbase, Electrum and Mycelium.

Pros

• Quick to access
• Easy to use
• Usually free

Cons

• More vulnerable to hacking due to online access

Cold Wallet

Cold wallets are physical, offline devices that store your Bitcoin securely without an internet connection. They’re best for long-term holders.

Common cold wallet brands are Ledger and Trezor.

Pros

• More secure than hot wallets
• Completely offline

Cons

• Costs range from $49 to $399
• Less convenient for frequent and regular transactions

Did You Know?

Bitcoin was the first cryptocurrency, launched in 2009. It has experienced major price swings — hitting $19,850 in 2017 and reaching an all-time high of over $73,000 in 2024.

While it’s highly volatile compared to traditional investments like stocks and bonds, many investors have still profited from its growth.

What You Need To Know About Buying Bitcoin

Understanding how to buy Bitcoin is just the first step — it’s also important to consider key factors like market volatility, investment goals and security before making a purchase.

Bitcoin and Cryptocurrency Basics

Bitcoin is a type of cryptocurrency that works without the need for a central authority like a bank. It uses a technology called blockchain, which is a secure system that records all transactions.

Cryptocurrencies, like Bitcoin, are stored in digital wallets and can be used for online payments or as an investment.

Volatility and Risk Associated With Bitcoin Investments

Bitcoin is highly volatile, meaning its price can change quickly, sometimes rising or falling by large amounts in a short time. This makes it a risky investment because you could lose money if the price drops.

It’s important only to invest what you can afford to lose and to research carefully before investing.

Setting Investment Goals

Before investing, it’s important to think about your financial goals.

• Decide how much money you can set aside for investing without affecting your daily needs or savings.
• For example, if your goal is to grow wealth over several years, you might invest more than if you’re saving for a short-term expense.
• Diversification is also key. Spread your investments across different types of assets, like stocks, bonds and cryptocurrencies.
• Diversifying reduces risk because if one investment loses value, others in your portfolio might still grow.

How Much Does Bitcoin Cost?

It may seem surprising that Bitcoin has reached a five-figure value. One Bitcoin costs $83,440 as of March 31, 2025.

However, the value of Bitcoin varies from time to time. This happens due to several factors that affect the rate of Bitcoin.

How Much Should You Invest in Bitcoin?

If you’re new to cryptocurrency investments, you should be pretty careful since the market is very volatile, and you can end up losing your money quickly.

Here are some tips to be on the safer side:

• Research:
  • Make sure you learn everything you need to about cryptocurrency exchanges before selecting one.
  • You can also talk to experienced investors through online forums or consult with a financial advisor.
• Diversify:
  • Investing in Bitcoin seems lucrative since the currency has spiked exponentially recently. Still, you should not put all your money in one cryptocurrency.
  • Instead, diversify your investments so that your portfolio is stable even when there are shifts in the market.

Aja McClanahan contributed to the reporting for this article

Information is accurate as of March 31, 2025.

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