Bitcoin. It is the most popular form of cryptocurrency and investment that has exploded in the last decade.
Access to bitcoin is getting easier and easier for the general public and it is also getting more popular to buy. One study concluded that about 14% of American adults own some form of cryptocurrency.
If you are not one of that 14%, you may be curious as to how to buy and sell bitcoin. Well, this guide will show you how to get started and how to access it, so keep reading below.
What is Bitcoin?
Before you can find out how to buy and sell bitcoin, you have to understand what bitcoin even is.
Bitcoin is an entirely digital currency, which means there is no paper currency for it and you can only spend it on online transactions. In addition to this, it is a decentralized currency, which means it is not controlled by any government or any bank.
It is similar to a stock or a currency exchange in that you can buy and sell bitcoin but the difference here is that you can actually use bitcoin for certain purchases depending on if the seller’s platform accepts it as a payment or not.
The crypto coin has a finite number of them to be able to buy and sell, which is part of the reason why bitcoin is so valuable because there are fewer of those available to trade than other types of crypto coins. In the past, bitcoin has been worth over $66,000 per coin.
This is a popular option for you to buy and sell bitcoin. What you usually have to do is find the one that is most convenient for you and then connect a form of payment to buy bitcoin such as a bank account or a debit card.
Certain platforms will make this easier for you than others, depending on where you are from and what else you are looking to do.
For example, if you only care about being able to buy and sell bitcoin and other major cryptocurrencies like ethereum, then a simple option like Paypal could be the best bet for you. Plus, that platform lets you make certain purchases with bitcoin depending on who you are buying from.
Then, there are more complicated platforms like Binance. This is considered one of the best exchanges for expanding your options of cryptocurrencies but American citizens are not allowed to use it.
One of the most popular exchanges on the market is Coinbase. There are several different types of cryptocurrencies here including bitcoin and it is known for having a pretty secure exchange to keep your crypto and personal information safe.
Other exchanges like Robinhood also let you buy and sell stock alongside cryptocurrency if you want to use a platform that lets you do both.
If all of that sounds intimidating for you, you can stick to Cashapp, which is a platform that lets you send and receive money virtually by connecting a bank account or debit card. To make it easier on a beginner, the only cryptocurrency available to buy and sell on there is bitcoin.
This is another option for you to buy and sell bitcoin if you want to do this more on the go. Resources like bytefederal.com/ are great for giving you an idea of where bitcoin ATMs are located in the United States and it provides some basic information on what you need to use a bitcoin ATM.
Some examples are to bring a photo ID, your cell phone to register with their wallet, and to bring cash because the majority of ATMs accept that as payment over everything else. These ATMs are typically places where you can buy bitcoin rather than sell it.
However, these ATMs are not just useful for buying bitcoin, as some of them also allow you to use their kiosk to buy gift cards and pay for them in bitcoin. What you can buy and where you can buy it depends on what you are trying to buy and what ATMs accept it of course.
The advantage here is that this can give you more flexible options to buy bitcoin and gift cards, plus perhaps a higher daily/weekly limit than in certain exchanges. For example, the website above offers about a $21,500 daily limit.
In comparison, some exchanges do not even let you buy and sell $10,000 worth of bitcoin in a week, so this can be an option for people who do not want to have as strict of limits.
This gets a little complicated depending on what platform you use and where you are located. For example, in the United States, bitcoin is considered property and an asset, so it can be taxed when you sell it depending on when you sell it and how much you make.
Timing can be key here, because if you sell it less than a year after you bought it, then it can be considered part of your annual income, which can bump you up a tax bracket or two depending on how much you have.
If you hang onto it for more than a year, then it is considered a capital gain and you will have to follow those tax rules for how to pay for that gain. But, there are ways around it and the damage can be minimal depending on how much income you have in a year.
Learn More About How to Buy and Sell Bitcoin
This is some basic information on how to buy and sell bitcoin. The best recommendation is to figure out how much you want to acquire, know the tax rules in your location, and get an idea of how easy exchanges are depending on your location and personal situation.
Check out some of our other Tips and Tricks articles for related information.