There are tons of ways to buy Bitcoin in the USA from exchanges to ATMs. But here comes the question – which one I should choose. In this article, we cover the most popular methods to buy BTC, explain traps and pitfalls everyone should know before buying Bitcoin and talk about wallets to store cryptocurrency.
Where to buy Bitcoin in the USA
You can buy Bitcoin in the USA right on crypto exchanges like Kraken or HitBTC with your bank card or another cryptocurrency. However, such platforms tend to not be so friendly to the user. They look like stock exchanges with charts, order books and etc. Also, you should pay attention to exchange rates in addition to deposit, withdrawal and trading fees.
Such platforms are created for cryptocurrency traders so you better take a look at instant converters like Changelly. They also charge fees but have a simple interface and are more convenient to use than your classic exchanges. All you need to do is type in how much BTC you want and the platform will show you how much you need to pay.
These are platforms for direct trading between people without a middleman. Thanks to this, P2P markets don’t have any fees – the buying, selling and trading of cryptocurrency is free here. The seller can choose any price and payment method, so you can find the most suitable offer for you.
However, using P2P platforms is not as safe as cryptocurrency exchanges, because you can be scammed by the seller. The platforms have escrow services and rating systems for each user but people still fall prey to fraudsters. The most popular platforms in the USA are LocalBitcoins, Bitsquare and Bitquick.
If you are an old-school guy and prefer things to be done in the classic way you can try Bitcoin ATMs. There are more than 3500 BTC ATMs in the US. The fees are significantly higher than those on exchanges, but the security is about the same. You can find the ATM nearest you on Coin ATM Radar.
How can I pay for Bitcoin
With a banking card:
Today cryptocurrency platforms accept a variety of banking cards: credit, debit, prepaid and even virtual cards. You should know that several US banks banned the purchase of cryptocurrencies via their credit cards. They are Capital One, Discover, Bank of America, Citi Group, J.P. Morgan Chase and Wells Fargo.
But that only applies to their credit cards, if you use debit, virtual or virtual cards you will get BTC without any problem.
With other crypto:
Besides Bitcoin, there are over 2000 other cryptocurrencies. Some of them can be traded on exchanges for BTC and vice-versa. Of course this method suits people who already have crypto and want to move all their digital assets to BTC. Just choose the trading pair suitable for you and convert your crypto to Bitcoins.
With a bank deposit:
There’s one more way to buy Bitcoin in the USA with USD – a bank transfer deposit to the exchange. It usually doesn't attract any deposit fees but you’ll have to wait 1-2 business days for your money to arrive on your account.
PayPal is a fast and easy way to purchase anything online and cryptocurrency is not an exception. The bad news is that very few platforms accept this payment method. VirWox and Paxful are two of the better-known platforms that accept PayPal at the time of writing.
When Buying Bitcoin you should consider the following:
- Platform fee – it can be from 7%-10%, but sometimes it can be higher.
- Bank fee – some card issuers consider the purchase of Bitcoin the same as a cash advance. As a result, you have to pay the cash advance fee too and it will come with higher interest rates than regular purchases.
- Transaction limits – there are minimum and maximum limits on the amount of Bitcoin you can purchase. Check if the platform has any restrictions on funds withdrawal from your account in one transaction or 24 hour period.
- How long it will take for your funds to arrive (for bank deposits).
Where can I store Bitcoin?
If you want to buy Bitcoin in the USA you’re gonna need a place to store it. First, you should set up a BTC wallet. You will get a private key (a special code – “password”) to access your public key (your BTC address) and perform transactions. Here are the main types of wallets:
Exchange hot wallet – cryptocurrency exchanges have their own hot (online) wallets. The main drawback is that they can be easily hacked. You shouldn’t store your funds on a hot waller, move them to another wallet as soon as you can.
Hardware (cold) wallet – offline wallets which look like a USB flash disk and can be connected to your PC or Mac. This is probably the most secure way to store your funds, because they are not connected to the internet 24/7 and can’t be hacked. The most popular wallets are solutions by Ledger and Trezor. This is the only type of wallet you need to pay for. They usually cost from $70 to $100 depending on the model.
Desktop wallet – these are applications for your Windows, Linux or MacOS. The private keys (password to your account) are kept directly on your computer. However, if you lose access to your desktop (e.g. it breaks) you will have to recover your wallet. Otherwise, you will lose your money. Every user has a special 12-word recovery phrase that is key to restoring lost access. You should definitely memorize it.
Mobile wallet – if you want to manage crypto on the go – you should look into mobile wallets. With a mobile wallet you can store, send and receive BTC on your iPhone or Android device at any point on the globe. However, mobile wallets are connected to the Internet and can be attacked by hackers. Also, phones are often lost, stolen or broken so you need to be careful storing your crypto there.
Is Bitcoin even legal in the USA?
Yes, Bitcoin is legal in the US and you won’t go to jail if you buy some BTC. Bitcoin payments in the U.S. fall under the same anti-money laundering regulations as transactions of fiat money and payments by banks and other financial establishments.
So what about Bitcoin taxes?
If you expected to avoid taxes with cryptocurrency bad news for you. Any profit-oriented activity requires you to report your income and pay taxes. You should pay taxes if you sell Bitcoins for USD or other cryptocurrency and make a profit off of it. The obligations also apply to mining activity, trading and spending BTC on goods and services.
Recently, the IRS sent out more than 10,000 letters urging investors to declare income from cryptocurrency transactions. Later the IRS sent letters to crypto traders again, demanding they indicate the exact amount of funds not paid to the state budget.
Why I should choose Freewallet
Freewallet is an accessible and secure cryptocurrency web and mobile app with the functionality of a complex blockchain wallet. It is perfect for cryptocurrency beginners and experts. We make simple products that even your grandma can use, but we don’t skimp out on security. Freewallet stores user assets in offline cold storage, safe from the prying reach of hackers. On Freewallet we have:
- Clear interface similar to common financial applications available on iOS, Android and the web.
- Bitcoin and more than +150 popular cryptocurrencies on board in one app.
- 24/7 customer support ready to help you in any situation – 30 minutes is our average response time.
Instant purchase of BTC, LTC, ETH, BCH, XRP, BNB and XLM with a banking card in the app. Purchased coins are transferred to your balance automatically.
- Exchange built into the wallet. Convert almost any cryptocurrency to improve your portfolio.
- No need to remember private keys and back up your wallet – we already did it for you. If you lose your phone you can easily lock the account and restore access on another device.
- Free transactions. All transactions between Freewallet users are completely free of charge without any fees.
- Multi-level security protection with 2FA, multisig transaction confirmation, daily/monthly transaction limits, etc. A majority of the assets are kept in cold storage. This guarantees that your coins won’t be lost or stolen.
To start enjoying Freewallet simply sign-up with your email, mobile phone, Google or Facebook account.
Buying Bitcoin on Freewallet
With a banking card
You can buy Bitcoin using web, iOS or Android versions of the application. Before you buy Bitcoin in the USA you should know the following:
To buy Bitcoin on Freewallet follow these steps:
- Login to the wallet
- Go to the “Buy with a card” tab
- Choose cryptocurrency — BTC, ETH or LTC
- Choose currency — USD or EUR
- Enter the sum
- Undergo verification
- You are awesome! Bitcoins are now on your balance.
If you have any questions you can read our FAQ on how to buy cryptocurrency at our support center.
With another cryptocurrency
If you already have some crypto you can top up your Bitcoin wallet with another cryptocurrency. Thanks to our partnership with Changelly, it will be automatically converted into BTC:
- Login to the wallet
- Go to “Receive” tab
- Choose Bitcoin in the list of other currencies
- Chose the cryptocurrency you want to top up with
- You got a special deposit address. Use it to top up your BTC wallet
- The crypto will be automatically converted into Bitcoin thanks to the built-in exchange.
More things you should know before buying BTC
- Cryptocurrency is volatile – the price of BTC can rise and fall by $1000 in just one day. Take a look at its price chart and you will see how the price has jumped around in the past. It is not a stable asset to buy. So you should be aware of all the risks and follow the golden rule – don’t buy more than you can afford to lose.
- Security is important – the world of cryptocurrency is like the wild west. There are a lot of scams looking to trick people into giving them their money. They use social engineering, email phishing, fake mobile apps and other schemes. Be careful and read our guide on how to protect your wallet.
- You have to pay for transactions – every transaction has a small fee. It depends on the load of the network, the amount you send and how fast you want to perform a transaction.
- Transactions can’t be canceled – if you made a mistake in the address your money will be sent to another person or will get stuck in the blockchain. In some cases, the Freewallet support team can help a customer and retrieve the coins back, but you better double-check everything. Here’s our guide on how to work with blockchain addresses.
- Bitcoin is not anonymous – it is a big misconception that Bitcoin transactions can’t be tracked down. Actually, your public address and transactions are visible to everyone. If you are looking for a privacy-oriented cryptocurrency you’d better look at Monero or Bytecoin.