Where to Buy or Sell Bitcoin
While we want to invest in a new financial space our typical investment accounts are not the place to start except under specific scenarios. Unfortunately it's very difficult to buy bitcoin or any crypto using a traditional retirement account, which means we are left searching for where we can buy it without these instruments.
It is possible to buy within a self directed IRA or 401k, but these accounts are more difficult to setup. We are working on an article for this topic and I will link to it here once it is done.
Before I move on to list where and how to buy, I would like to take this space to talk about where NOT to buy, and why.
Do not buy from Paypal or Robinhood
These services allow you to bet on the price, but it's important to understand that bitcoin and most other crypto's are real commodities, not securities. There is no price authority, the price is what you pay, or in these cases, whatever the service says it is. These services do not allow you to take your purchased coins, so you cannot own them yourself, and you cannot sell them where you wish. They cannot be transferred elsewhere, and there is no legal limitation to the buy or sell prices offered by these services. If you own coins on these platforms now it would be best to strategize the best way to sell them and buy coins elsewhere.
Why are you buying?
This is important. Why you are buying may change where you want to buy and which factors are important to you. If you are buying to invest purely as a financial move, then the traditional exchanges listed below will be right for you. If you want to invest, but would like to also support the overall movement towards a free market it would be best to use exchanges that do not promote regulation, or those who work to prevent more. Yes, Bitcoin, and by proxy, all crypto's promote an unregulated free market by making it as difficult as possible for regulatory agencies to physically stop these projects. This is a core function of a blockchain. Further, anonymity is considered important by many proponents of crypto. If you see value in owning crypto without anyone having direct knowledge that you do you will be looking for ways to buy that are not traditional exchanges.
Coinbase is very easy to use and Coinbase Pro is one of the easiest exchange interfaces to use. While Coinbase pro has some of the lowest fees, the regular Coinbase offer is one of the highest fee options with a spread on top, meaning the price they offer to sell you coins at is more than the price they will buy them off you. Comparing this pricing system to other exchanges requires placing an order on each to compare the total costs and return. The total spread on Coinbase is around 4%, which means about a total of 2% “fee” to buy or sell.
A common complaint about both platforms is that the website often crashes when there's high volatility in the bitcoin market.
Referral Link Referral code, get $25 when you spend $100: 1AE3C8
A great mobile application that's easy to use. Unfortunately their claim to fame “100% Commission-Free” isn't very accurate. They price coins how they want to, and this is at a spread, meaning the price they offer to sell you coins at is more than the price they will buy them off you. This system hides any fees within it so it's not noticed by the user. Comparing this pricing system to other exchanges requires placing an order on each to compare the total costs and return.
This platform has a large selection of coins and is a publicly traded company out of Canada. You can earn interest on bitcoin and other coins. One of the co-founders was the CEO of E-trade. They offer a profit and loss calculator (a service I wish more apps had) and reportedly great customer service. They are also FDIC insured up to 250k USD.
Gemini is a US regulated exchange that uses this as a point in advertising. They have promoted further regulation of the industry and are the leading platform in the state of New York, where being a bitcoin exchange is privileged by a board of private bankers and a non refundable fee that has no set amount but is typically more than $1,000,000. The exclusivity of their New York operations may be a driving factor in their promotion of further national regulation. This very pointed issue may not be a concern for every investor.
They offer an interest bearing account option and have moderate fees compared to other top rated exchanges. They also have a limited offering of different coins.
I have less information about this platform that other. Binance has history on why they have a Binance US version. When the company began being pressured by regulators and tax authorities they moved their headquarters to Malta after a bid type negotiation with multiple small nations. When the United States made it clear that they would pursue them if they continued to offer services to US based customers they ceased operation in the country. After some time they opened Binance US, which is only for US customers and follows US regulations. I have heard that it is hard to verify on Binance US.
Blockfi is planning to release a credit card with 1.5% cash back, which can be earned in BTC.
Kraken has promoted the furthering of an open market within the United States and offers some of the lowest fees as well as leveraged trading. They also won a Bank Charter in Wyoming! This is not setup yet, and may change the position of this exchange once it is. Kraken takes up the bottom of the list because most customers have to wire funds in, which makes kraken the worst option listed for low volume purchases because of flat fees ranging up to nearly $100 to get funds on and off your account. On the other hand, if you're a business or looking to invest (or sell) for millions USD, then Kraken, or Kraken's OTC Desk is likely the perfect fit. Kraken has the least user friendly interface out of all that are listed here. It works, but it's not simple.
Where possible links to exchanges have been replaced with referrals. Using these referral links may offer you incentives, but it also helps this blog stay alive.