10 Ways To Buy Bitcoin And How To Choose One

[ad_1]

Dreamstime.com

Text size

When the first Bitcoin exchange-traded fund was offered in the United States in 2013, the means to buy Bitcoin were limited. Some people crossed their fingers and invested in overseas exchanges like Mount Gox, which imploded the following year, or gathered in public places like parks to exchange money for codes.

America’s first Bitcoin ETF, ProShares Bitcoin Strategy (ticker: BITO), has now started trading, and options to buy crypto have since expanded by leaps and bounds. This can limit the number of people who dive into the ETF.

Brokerage apps and payment platforms now allow millions of people to buy Bitcoin and other digital assets with just a touch, and there are investment products that track the price of Bitcoin. They differ in several respects, including those that allow customers to hold cryptocurrencies in a “digital wallet,” an electronic payment system that allows them to transfer their assets out of the platform.

[Read More: Bitcoin ETFs Are Changing the Game for Cryptos. But Investors Should Be Wary.]

Here are some of the ways to buy Bitcoin today:

1.ProShares Bitcoin Strategy ETF

Fee: 0.95% per year

Pros: The ETF structure is familiar and allows people to keep all of their investments in one place.

Cons: ETF tracks Bitcoin futures contracts, not Bitcoin. Taxes and the “rolling cost” of purchasing new futures contracts can weigh on results.

2. Global Coinbase

Fee: up to 4%, depending on the method of payment.

Pros: Coinbase Global (COIN) offers a wide range of crypto offerings and expertise. It extends to areas such as non-fungible tokens, or NFTs, which are growing rapidly. The “pro” platform may have lower fees.

Cons: High fees.

3. Bitcoin ATM

Fees: On average around 7%

Pros: ATMs are familiar even to people who are not digitally savvy. Own Bitcoin directly.

Cons: High fees. You still need to download a wallet app.

4. Robinhood Markets

Fees: No commission.

Benefits: Quick and easy.

Cons: Robinhood Markets (HOOD) collects payment from order flows from crypto market makers, which can hinder trade execution. Robinhood users cannot yet withdraw their crypto from the platform, although the company announces that it will deploy wallets soon.

5. Square

Fees: Fees depend on the size of the transaction, decreasing as the size of the transaction increases. In October 2021, a purchase of $ 100 would cost $ 2.26.

Pros: Square (SQ) allows users to turn crypto on and off from the Cash app.

Cons: The fees can be a bit higher than the other options. The other crypto-currencies are not yet offered.

6. Microstrategy

Fees: It’s one share, so no fees if investors use a broker with no commission.

Pros: MicroStrategy (MSTR) is a company that owns around $ 7 billion worth of Bitcoin, roughly as much as its total market capitalization. Its action evolves with the price of Bitcoin. One advantage is that it is taxed as a share, which is well known to investors.

Cons: The stock tends to trade at a premium compared to the Bitcoin it holds. Management could change strategy and sell Bitcoin.

7. PayPal

Fees: Fees based on the size of a transaction, with a 2.3% charge for purchases of $ 25 to $ 100. In addition, there is a currency translation difference.

Pros: Crypto is part of a handy ‘super app’, with services ranging from direct deposit to peer-to-peer payments and purchases.

Cons: The fees are higher than elsewhere, and you cannot withdraw your crypto from the app into an external digital wallet. PayPal is working on a wallet.

8. Bitcoin trust in grayscale

Fees: 2% per year.

Pros: Grayscale Bitcoin Trust (GBTC) is easily found in a brokerage account and has a long trading history.

Cons: Higher fees, and it often trades at a premium or discount compared to Bitcoin. Currently, it’s on a discounted price, which some say makes it a good deal.

9. Bitcoin mining directly

Fees: Mining rigs can cost anywhere from $ 800 to $ 10,000.

Advantages: No recurring charges for foreigners except for the electricity company.

Cons: Extremely high power consumption, high initial costs for the platform, increasing competition from sophisticated miners.

10. Interactive brokers

Fees: 0.12% to 0.18%.

Pros: Low fees, cryptocurrencies sit alongside other assets like stocks and bonds in portfolios.

Cons: As with any new product, customers will need to see how easy it is to use.

Write to Avi Salzman at [email protected]

[ad_2]