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How to Buy Bitcoin in Colombia in 2021

Bitcoin Colombia

Created and launched by the mysterious Satoshi Nakamoto in 2009, Bitcoin, the first cryptocurrency, has grown astronomically in value over the past decade. Colombia has maintained a very cautious approach towards cryptocurrencies all this while, having implemented no particular law for their regulation. Nevertheless, it’s fairly easy to buy Bitcoin in the country today, through a wide network of Bitcoin ATMs, crypto exchanges and broker platforms. You can buy Bitcoin in Colombia using different payment methods including, bank transfer, credit/debit cards and Paypal. Let’s understand the various aspects of buying Bitcoin in the country, as detailed below.

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Why Trade Bitcoin instead of Buy Bitcoin?

1

No wallet needed

Trading Bitcoin using a derivative like CFD at a broker platform does away with the requirement of a crypto wallet, as there’s no actual BTC transfer involved.

2

Use usual payment methods

Brokers are open to accepting the majority of commonly-known payment methods including bank transfers, credit/debit cards and third-party payment processors like PayPal.

3

Easy & fast

As the trading activity can be automated with the help of a robot, it’s often an easier and quicker way to invest in and benefit from Bitcoin.

How to Buy Bitcoin With the Best Broker in Colombia

Cryptocurrency brokers perform the task of connecting Bitcoin buyers with the rest of the crypto market, and charge a small fee for their service. Colombia has various international and local Bitcoin brokers operating in the country. Seasoned professionals with multiple years of brokerage experience under their belts, specifically in the Latin American market, are at the helm of affairs at these platforms. Read below to learn more on how to use these brokers to successfully buy Bitcoin in Colombia.

1. Register with a Reputable Broker

You should select a broker in Colombia after having compared different platforms based on their payment methods, supported currencies, rates, safety measures, transaction limits, customer support, reputation and regulatory status. Registration is easy and usually involves input of some basic information such as your address, full name, valid email ID and contact number.

2. Verify your Identity (KYC Process)

Identity verification is the next important step after registering with the broker, and normally involves uploading a government-issued photo ID card, for instance a passport, national ID card or a driving license, to the platform. Some brokers may even ask you to upload a separate proof of address, usually in the form of a utility bill. Please note, regulated brokers that make such verifications mandatory, in compliance with their KYC norms, are far safer to transact with than unregulated portals.  

3. Deposit Funds with your Preferred Payment Method

There are many different ways in which you can deposit funds into your account with a crypto brokerage platform in Colombia. Regulated service providers are usually receptive to more payment options including credit/debit cards, prepaid cards, bank transfers and third-party platforms such as PayPal. Some of them even permit deposits made in the local Colombian Pesos (COPs).

4. Open a Position to Long/Short Bitcoin

Trading Bitcoin through a brokerage platform generally entails opening long and short positions using either the actual BTC or a derivative product like CFD. You open a long position if you expect the Bitcoin price to increase, and a short position if you believe that its price will drop instead, in the near future.

Trading through a platform like eToro for example, you buy the actual Bitcoin when you open a long position without leverage. If Bitcoin’s price increases, you close your position at an appropriate time, making some profit for yourself.

On the other hand, taking a short position involves using a derivative product like a CFD to bet on the cryptocurrency’s price drop, with no actual Bitcoin exchange involved. Your profit/loss is the price difference between the opening and closing Bitcoin CFD trades. 

There are various order types like trailing stop-loss order, limit order, stop-loss order and market order that can be used for manually/automatically entering and exiting the trades at strategic moments, thus booking profits and restricting losses just at the right time.

5. Close your position

An open long/short Bitcoin position can be closed either manually or automatically once the target price has been achieved. Manual closure is done directly on the trading platform but it can also be automated by defining some price points during the trade setup such as stop-loss and take-profit points. To explain with an example, if you go long on Bitcoin, you could specify a stop-loss point to close the trade as soon as the BTC price drops down to the stop-loss level, protecting you from a bigger loss. A take-profit point can be set too, at which the trade will automatically close once the Bitcoin price appreciates to that level, thus securing your profit. 

How to Buy Bitcoin With the Best Exchange in Colombia  

With so many different local and global crypto exchanges operating in Colombia, it can get overwhelming to pick the right one for your needs. If you’d like to buy Bitcoin with the Colombian Peso, you should select a local portal that offers a BTC/COP trading pair. Let's discuss how you can use crypto exchanges in Colombia to make an easy purchase of Bitcoin.

1. Set up a Wallet 

While many regular Bitcoin traders save their coins in exchange-provided web wallets, it is always advisable to move your cryptocurrencies to an external wallet. Below are two major cryptocurrency wallet types that you can use:

Software wallets – Available as software applications run on laptops, desktop computers and mobile phones, these are compatible with all well-known operating systems like Windows, iOS and Android. Their constant internet connectivity makes them a type of a hot wallet, and exposes them to hacking attempts.

Hardware wallets – These cryptocurrency wallets come in the form of small USB-sized physical devices, capable of storing Bitcoin and other digital assets in an off-line environment. You can even connect them to the internet whenever required and move funds comfortably.

2. Choose and Join an Exchange

You can choose from various local and international cryptocurrency exchanges in Colombia. However, they all differ based on their fee structure, security measures, user-interfaces, available trading pairs, regulatory aspect, customer care and offered payment options. Make sure that the one you choose is a well-regulated portal, licensed by a leading authority. This will ensure the safety of your funds.

3. Choose Your Payment Methods

Your choice of payment method on a crypto exchange will depend on multiple factors including its availability, speed, cost and convenience. Most Colombian crypto exchanges allow you to buy Bitcoin with a credit card, debit card, bank transfers, and PayPal. There are certain pros and cons associated with each payment method. For example, bank transfers are cheap but have a longer processing time, whereas credit/debit card transactions are swift, but involve a higher fee.

4. Place an Order to Buy BTC

It’s quite easy to place an order to buy Bitcoin on a crypto exchange. Simply locate a trading pair like BTC/COP, BTC/USD, BTC/ETH and BTC/XRP that best suits your requirements, review the current exchange rate, enter the amount of BTC you’d like to buy, and click the ‘Buy’ button to execute the trade. It’s possible to buy Bitcoin instantly at the existing market rate, using a ‘Market Order’ or at a rate specified by you using a ‘Limit Order’.

5. Safely Storing Your Bitcoin in a Wallet

Frequent Bitcoin traders prefer keeping their BTC in exchange wallets to ensure their ready availability, for regular trading needs. However, long-term investors often transfer their purchased BTC from the exchange to an external wallet. While it’s preferred for security reasons to move BTC from exchange to an independent crypto wallet, doing so is optional and entirely up to you. Such a transfer can be done using the withdrawal option on the exchange platform’s dashboard. Enter the amount of BTC to be transferred and the recipient wallet address, and you’re all set.

What if I want to Buy Bitcoin with Cash in my City in Colombia?

A large number of people opt to buy Bitcoin with cash in Colombia. This can be done either through any of the 49 Bitcoin ATMs installed across the country, or through P2P trading platforms that accept deposits in cash. We’d like to stress here that dealing with unknown platforms for cash purchases of Bitcoin can prove to be very risky. It’s always better to buy through a regulated portal. There are several Peer to Peer (P2P) exchanges serving the country that accept cash deposits and hold funds in an escrow account. The funds are released only after confirmation of the Bitcoin transaction by both the parties (buyer and seller).

All businesses engaged in crypto-related businesses in Colombia need to abide by the rules laid out by one of Colombia’s top financial regulators called the Financial Superintendence of Colombia (SFC). In a fresh move to create a regulated environment for trading of cryptocurrencies in the country, SFC initiated a crypto-asset transactions pilot programme earlier this year, in 2021. As per this programme, some of the most prominent Colombian banks are working in alliance with the nation’s biggest crypto exchanges, inside a newly constructed regulatory sandbox, for a trial period of one year. The step is believed to be in the right direction, and is expected to create a more transparent crypto trading environment for everyone. 

3 Tips to Buy Bitcoin

Below are 3 useful tips that if followed correctly can help to ensure a cost-efficient, timely and safe Bitcoin purchase in Colombia.

1. Choose the Right Time and Do Your Own Research 

Doing your share of due diligence is critical to entering the market at the right time and buying BTC at the best possible price. This can be done by studying the historical price movements of Bitcoin, and factoring in the various fundamental & technical factors capable of impacting its future price.

2. Comparing Costs to Buy Bitcoin

Transacting on any cryptocurrency exchange or broker will involve some charges like deposit fees, withdrawal fees, commissions, spreads and transaction charges, that will vary from platform to platform. You must compare all such costs before selecting a specific online exchange for your Bitcoin purchase. Select an exchange that offers you the best service and suits your budget. 

3. Safety and Security

It is very crucial that you carefully study the safety and security measures taken by the crypto exchange or broker, before signing up with it, for your Bitcoin purchase. Regulated service providers are preferred in this regard as it’s compulsory for them to comprehensively secure their platforms, to maintain their licences. If required, add additional security layers such as 2FA to further protect your funds.

Can I Buy Bitcoin with Peso?

While most trading platforms will accept major international fiat currency including USD, GBP and EUR, the local ones will also facilitate easy Colombian Peso deposits. However, it’s important to remember that these platforms may later convert your deposited COP into USD or some stablecoin like USDT, for easy trading. But by doing so, they may also bring the prevailing exchange rates into consideration. Though negligible, these charges must still be factored into your overall Bitcoin investment.  

Other Ways to Buy Bitcoin in Colombia?

Use a Bitcoin ATM to Buy BTC: As highlighted earlier, there are 49 Bitcoin ATMs in Colombia, where you can easily Buy BTC whenever you need. Of these, 29 are in Bogota, 6 in Medelin, 3 in Pereira, and 3 in Bucaramanga.

Other Ways to Get Bitcoin: You can also obtain BTC through Bitcoin mining in Colombia. It’s possible to indirectly invest in Bitcoin as well, using Exchange Traded Funds (ETFs) that track BTC’s price movements. Other ways to acquire the cryptocurrency are to accept it as payment for goods & services.

Colombia is gradually opening up to cryptocurrencies, and is in the process of setting up a regulatory framework for their easy trading in the country. Crypto operators are allowed to offer services as long as they follow guidelines laid out by the SFC. You can easily buy and sell Bitcoin in Colombia today by using the detailed information provided in this article.

Frequently Asked Questions

  1. Yes. Bitcoin is a divisible cryptocurrency and it’s possible to buy a small fraction of it in Colombia, to the 0.00000001 BTC level.

  2. Yes. It may be possible to buy Bitcoin anonymously in Colombia through an anonymous peer-to-peer (P2P) exchange. However, we don’t recommend transacting on any unregulated platform that doesn’t follow a thorough KYC process.

  3. Yes. Cryptocurrencies are considered assets for tax purposes in Colombia and any gains made from their trading are taxed accordingly.

  4. The cost of Bitcoin mining will depend upon the computer hardware used and the electricity tariffs in your region.

  5. Yes. All regulated cryptocurrency trading platforms are required by the international ‘Anti-Money Laundering’ (AML) and ‘Combating the Financing of Terrorism’ (CFT) laws, to verify identity of anyone who signs up with them.

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