Bitcoin was the world’s first cryptocurrency and it is still the most widely traded coin today. This page guides you through how to buy Bitcoin, and what to consider when you do.
Keep reading for a step-by-step guide to buying and trading Bitcoin, and for a quick summary of everything you need to think about before investing in cryptocurrency.
Compare where to buy Bitcoin, and open an account
If you’re ready to buy Bitcoin now, simply click one of the links in the table below to visit one of our trusted partners. We compare all the best online brokers to help you find the right platform for your crypto trades. If you need to know a little more, then just scroll past the table and keep reading.
What is Bitcoin?
Bitcoin is the most widely used and traded cryptocurrency in the world. Instead of requiring a centralised body such as a bank to verify transactions, all Bitcoin payments are recorded on a public ledger called a Blockchain which is constantly maintained by users of the cryptocurrency. This means that Bitcoin can be bought, spent, and traded without the need for any institution to oversee the process.
Not only is it the largest crypto, Bitcoin was also the first. It was launched in 2008 through an academic paper entitled, Bitcoin: A Peer-to-Peer Electronic Cash System. This paper was published under the name Satoshi Nakamoto, which most people today believe to be a pseudonym for a group of mathematicians who worked on the project together. The identity/identities of Satoshi Nakamoto have never been revealed.
How does Bitcoin work?
Bitcoin works by recording any and all movements of coins on a blockchain. When one coin is sent from one wallet to another, the information about this transaction is added to the blockchain. As the blockchain is publicly accessible to everyone, this creates an immutable record that the Bitcoin has moved from one location to another.
This might sound fairly trivial, but it’s this process that allows Bitcoin – and all other cryptocurrencies – to exist. Before Satoshi Nakamoto’s white paper in 2008, nobody had figured out a way to prevent somebody spending the same coin more than once without having a centralised body (such as a bank) keeping a record of all transactions. With the invention of the blockchain, the ‘double spend problem’ was solved and Bitcoin became a viable alternative currency.
This is just a very short summary of the way Bitcoin works. To get the full picture, and understand the meaning of key processes such as Bitcoin mining, take our quick and free Bitcoin 101 course. Keep reading to find out how to buy and invest in Bitcoin now.
How to buy Bitcoin online – step-by-step guide
Step 1. Find an exchange to buy Bitcoin
If you’re looking to buy or sell Bitcoin, then there are a wide variety of exchanges you can use. Every platform has its own benefits and drawbacks, and our in-depth reviews and quick comparison tables (one of which you’ll find at the top of this page) can help you make the right choice. For now, here are two of our favourite Bitcoin exchanges:
- Binance: Binance is one of the largest and best cryptocurrency exchanges around, with the option to trade Bitcoin along with a huge variety of other coins. It has a user-friendly app, and offers very competitive fees. You can open an account right here >
- Changelly: Changelly is a reliable exchange that will allow you to buy Bitcoin right away at a fixed price. Its fees are a little higher than you’ll find with other platforms, but this extra cost is justified by the convenience.
Step 2. Sign up and fund your account
To use an exchange, you’ll usually have to sign up and register for an account. The exact steps this will require vary from platform to platform, but expect to be asked to provide an email address, phone number, and photo ID.
In terms of funding your account to buy crypto, the payment methods accepted again will depend on your chosen platform. Some exchanges only allow you to make deposits in cryptocurrency, and those that accept fiat deposits won’t always accept e-wallets such as PayPal.
Step 3. Buy Bitcoin
You can buy and trade Bitcoin once you have funded your account. Simply select ‘Bitcoin’ from the list of coins you can buy, or select the trading pair for the coins you’re trading (e.g. BTC/GBP if you’re buying Bitcoin with British Pounds) and execute your trade.
Step 4. (Optional) Get a suitable wallet
With most exchanges, you can hold your Bitcoin on the exchange platform. While this is convenient if you’re looking to trade your coins, it can be worth getting your own personal wallet if you’re going to buy and hold Bitcoin for a long time. This is the best way of keeping your coins secure, with good options being hardware wallets such as the Ledger Nano X or the Trezor One.
How to trade Bitcoin – step-by-step guide
If you’re looking to trade Bitcoin, then the best option is to use an online broker that allows you to open and close positions quickly. The best way of trading Bitcoin is using CFDs (contracts for difference), and you can also do so through spread betting. Neither of these approaches requires you to have a Bitcoin wallet, and the steps to follow are outlined below.
Step 1. Find a broker
Pretty much all brokers that allow cryptocurrency trading will allow you to trade Bitcoin. Plus500 and eToro are two of the most well-known names in the online broker space at the moment, and both support Bitcoin trading.
Step 2. Deposit money
Before starting to trade you’ll need to make a deposit into your account. Brokers will usually accept deposits only in fiat currencies (e.g. GBP an dUSD), and there will typically be fees associated with deposits and withdrawals. Have a read of our reviews to find the best deal.
Step 3. Decide how you’d like to trade
The two trading options you’ll have with most brokers will be CFDs (contracts for difference) or spread betting. With both of these approaches, you’ll be trading against the value of Bitcoin rather than actually taking ownership of the coins yourself. You can read more about both of these approaches here on Invezz to help make your decision.
Step 4. Start trading
It’s best to start trading with a demo account first if you’re new to Bitcoin. This way you can learn the ropes without risking any money – which is particularly useful in a volatile market such as cryptocurrency.
When trading the crypto markets you’ll be speculating on Bitcoin’s price movements – taking either a long (buy) position or a short (sell) position. You’ll want to keep up-to-date with all the latest news and come up with strategies that can help you determine which way the market will move.
Once you get more experienced, you might also consider trading with leverage. Many brokers will allow you to trade large amounts with you only having to pay a small ‘margin.’ Be careful of leveraged trading though, as it can lead to big losses just as quickly as it can lead to big profits.
To help you make your decision, we’ve condensed everything into these quick pros and cons. Keep reading below to read more about what you should consider before buying Bitcoin and whether it’s the right time.
- Bitcoin is the largest and most well-known cryptocurrency
- It’s increasingly widely accepted as payment method
- Built in scarcity gives BTC intrinsic value
- Has previously skyrocketed in price in short spaces of time
- Volatility might appeal to traders but can make buyers nervous
- There are now thousands of other cryptocurrencies competing with Bitcoin in the crypto space
- Bitcoin has recently attracted criticism for the environmental impact of energy-intensive mining
In addition to these pros and cons, here’s a quick run through of three things to consider when investing in Bitcoin.
Is it a good time to buy Bitcoin?
If you’re looking to buy Bitcoin for the purpose of using and spending it, then it’s pretty much always a good time to buy some Bitcoin – as long as you can afford it.
This question becomes trickier to answer if you’re thinking of buying and trading Bitcoin as an investment. Here’s a good way to think about the question:
- If you’re looking to buy and hold Bitcoin, hoping to profit from increases in value, then you will want to look into its recent price performance and compare that to historical data. This is the best way to analyse how well it is likely to perform and whether it is currently under or overpriced.
- If your aim is to trade Bitcoin over the shorter term, then it’s more relevant to hone your technical analysis skills and get comfortable reading charts. The exact price of Bitcoin at the current moment is less relevant than knowing how trading activity tends to fluctuate in short periods of time.
With either approach, it’s important to keep up to date with the latest analysis of the Bitcoin market. Here’s the latest from our experts:
Can Bitcoin (BTC) price hit fresh record highs in December?
Bitcoin (BTC) price rose to the highest mark in nearly three years on Wednesday before correcting lower on Thanksgiving to erase previously weekly gains. Fundamental analysis: New record highs eyed Crypto investors witnessed a strong move higher in Bitcoin price thanks to being perceived as a safe-haven against inflation and driven by expectations of mainstream adoption. The world’s biggest cryptocurrency advanced around 150% year-to-date and is…
Bitcoin (BTC) price may pull back to $16,600 before continuing higher
Bitcoin (BTC) price is trading around 0.4% lower today as the buyers show signs of exhaustion near the record highs. Fundamental analysis: Weak supply A weaker Bitcoin supply might be one of the key drivers behind Bitcoin’s recent rally. Some analysts believe that China’s miners may be selling Bitcoins amid regulatory crackdown on local exchanges. “The lack of supply has fed extremely well to the trendiness of this rally, without any of the…
Bitcoin aims for $19,000 as FOMO kicks in
Bitcoin made headlines after rising to a new yearly high of $18,500 on Wednesday, November 18th. As market participants appear to be entering a state of FOMO, on-chain data reveals that there is more room to go up before a correction materialises. The crowd goes wild as Bitcoin surges to new yearly highs Bitcoin captured the market’s attention following the impressive bull run it has seen over the past few weeks. The flagship cryptocurrency…
Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) price analysis as crypto market cap exceeds $500 billion
Bitcoin (BTC) and Ethereum (ETH) prices have extended their gains today to push the cryptocurrency market capitalization over $500 billion. A major push higher The top cryptocurrency advanced around 150% year-to-date and is up around 360% from its March levels after the coronavirus outbreak. “Driven by a mix of market structure and strong fundamentals, bitcoin could now be within days of reaching its all-time high,” said Nicholas Pelecanos, chie…
What problem does Bitcoin solve, and what are the coin’s investment prospects?
The problem that Bitcoin solves is the same as it has been since its launch in 2008: how to have a viable currency without the need for a centralised institution. Bitcoin’s fame and value have been built on its ability to function as a currency without the need for the backing of banks.
Since Bitcoin emerged, thousands of other coins have followed, but none has (as of yet) knocked Bitcoin off its perch as the leading cryptocurrency in the world. Many of the coins that came after Bitcoin have built themselves on ambitious projects trying to apply the blockchain to new problems, but Bitcoin remains just as it ever was, a currency enabled by blockchain technology.
This could make it sound like Bitcoin has had its day and is now somewhat old fashioned in the crypto space. However, many people have made similar arguments over the years and Bitcoin is still here, with no sign of disappearing any time soon.
In terms of Bitcoin as an investment prospect, this longevity means there is a wealth of data to draw on to make your decision – more so than with any other coin. By investigating the patterns that Bitcoin’s price tends to follow over the course of a year, and the fundamental strengths of the cryptocurrency, you can make an informed decision about whether investing in Bitcoin is a good idea. It is also crucial to keep up to date with all the latest news that can impact Bitcoin’s value, which you can do right here:
Venezuelan branch of Pizza Hut starts accepting Bitcoin
Pizza Hut may be a US-brand, but the pizza-making company has expanded all across the world since it was first founded. Now, its Venezuelan branch decided to join the local trend and start accepting crypto payments in all Venezuela-based stores. Pizza Hut accepts crypto payments The news first emerged three days ago, on November 27th, when a crypto services firm, CryptoBuyer, tweeted about it. CryptoBuyer said that Pizza Hut stores across Venezue…
Crypto derivatives exchange Bybit rolls out quarterly Bitcoin Futures
Cryptocurrency derivatives exchange Bybit said it is launching BTC/USD quarterly futures contract. According to the announcement, the futures contract will go live on November 30, with two contracts offered at the launch. Both contracts – BTCUSD1225 and BTCUSD0326 – will start on December 20, 2020, and March 26, 2021, respectively. The exchange also announced the introduction of a wide range of products and features on its exchange platform…
Report: Satoshi Nakamoto lived in London while developing BTC
Satoshi Nakamoto was allegedly living in London while working on bitcoin (BTC). Doncho Karaivanov, an author at Chain Bulletin, a blockchain media outlet, published this finding in a November 23 report after researching Satoshi’s whereabouts while he was working on BTC. Per Karaivanov, the BTC developer left the crypto scene for good nine years ago. However, he left traces that led to the discovery of his whereabouts while he was working on the t…
Biden is set to nominate the former Fed Chair as the new Treasury Secretary
On Monday, the Wall Street Journal reported that Joe Biden, the current U.S. president-elect, is looking to introduce the Former Fed chair Janet Yellen to succeed Steven Mnuchin, the Treasury Secretary when he takes office early next year. However, all nominees will have to be vetted by the Senate. Reportedly, Yellen, Roger Ferguson- the former Fed Vice-Chair, and Lael Brainard- Federal Reserve Governor are seen as the most preferred candidates….
Do you want to hold Bitcoin for the long term?
There are some times when it’s best to hold Bitcoin for a long time, and others when it might be better to get in and out quickly. It basically comes down to how soon you want to see your returns. Here’s what you want to consider when holding Bitcoin for the long or short term, and which platforms are most suitable.
Considerations for a long term investment strategy
Long term investing is best if you believe that Bitcoin’s price is going to trend upwards in the coming months and years. If you’re going to invest in Bitcoin in this way, it makes sense to buy coins through an exchange and then transfer them to a secure personal wallet.
Considerations for a short term trading strategy
Short term investing is more focused on taking advantage of volatility to make small amounts of money quickly and often. If you want to trade Bitcoin in this way, then you should sign up to a broker with low trading fees, and maybe consider looking for other options such as leveraged trading.
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