How to Buy Cryptocurrency in the USA 2024

How to Buy Cryptocurrency USA

1. Join the right platform

Select the preferred broker or crypto exchange and create an account. You will need to enter your real name and a working email address/mobile number at the registration window. However, make sure you provide the correct details because the platform might deny you an account if the information fails to check out during the KYC (know your customer) process. In addition, the platforms are legally bound to make sure they know the true identity of their clients.

2. Fund Your Account

Please note that some exchanges do not require users to pre-load funds into their accounts. For those that do, they provide a variety of payment options to use, including credit cards, bank transfers, and online payment providers like PayPal and Skrill. Also, all brokers require funding of the account. The time taken for the funds to reflect in your account varies depending on the payment method.

3. Buy Cryptocurrency

With the account funded, you can go ahead and make the first trade. For a brokerage account, you will proceed to the trading section and select the appropriate crypto pair. Then, specify the order size and push the order to the broker. Next, you will navigate to the “Exchange” section and select the appropriate coin if you have an exchange account. Finally, select the amount you wish to purchase and the preferred mode of payment, and hit ‘BUY.’

Step by Step Guide - How to Buy Cryptocurrency USA

Cryptocurrency usage is more widespread in the US than in many other parts of the world. Yet, we recognise that not every person has the appropriate information regarding purchasing digital assets. Therefore, the following steps should give you the start you need.

Step 1: Find an Appropriate Platform to Buy Cryptocurrency

Let’s begin by emphasising that all cryptocurrency platforms are great places to buy tokens, as long as they are regulated. As such, your choice of the place to buy crypto comes down to personal preferences.

For example, you should select a crypto exchange if you intend to take the delivery of tokens into your custody. People who choose to buy crypto over an exchange often intend to hold the coins for an extended period. Ultimately, they would sell when prices get high enough.

A broker is ideal for investors who intend to leverage the volatility in the crypto market for profit. There are those people who find thrill in making hundreds of trades in a day and making small gains every time. Such people could use the cryptocurrency CFDs available on brokers’ trading platforms.

Step 2: Registration / Create a New Account

If you can recall, we mentioned earlier that the USA does not have an official stand regarding cryptocurrency at the federal level. However, the relevant regulators have come up with few rules targeting the sector to ensure customers are protected. For example, all trading platforms must obtain operational licenses from relevant authorities.

One of the requirements for a licensed broker/exchange is that all clients must have an account with KYC. So, you must register with the preferred platform before proceeding. Thankfully, the registration process is fast and straightforward.

Please be sure to provide accurate details to ensure a smooth KYC process. The KYC process enables the platforms to know you and to be able to explain your membership in case something goes awry. Also, this process increases the security of the other users on the platform.

The brokers and exchanges have a legal obligation to verify your identity and address. As such, you will need to provide copies of documents such as ID and bank statements.

Step 3: Deposit Funds

The deposit process varies based on the payment method used. For example, you will need to verify your bank account first before you deposit via bank transfer. However, depositing via credit card is more straightforward.

On the trading platform, go to the “Wallet Balance” section, then hit the ‘Deposit’ button. Next, select the currency type and then the payment method.

For your information, the payment methods available for each platform are different. In addition, while some platforms offer a long list of options, others might limit the list to just a handful.

Step 4: Start Trading or Buying Cryptocurrency

You can only start participating in the cryptocurrency market with an active account.

When using an exchange, buy the preferred coin and send them to your private wallet. This last step is critical for the security of your funds. However, you could keep the coins with the exchange if you intend to dispose of them sooner.

If you choose a broker, navigate to the “Trading” tab, and select the appropriate crypto derivative. Then, follow the prompts and submit the ‘BUY’ or ‘SELL’ order.

Step 5: Optional Steps

If you purchased a coin, you might want to secure the tokens. For example, you could move them from the exchange’s custody to a private wallet. For the utmost security, use a wallet without access to the internet or a ‘cold wallet.’

If you open a trading position, the next important thing you should do is risk management. Risk management entails installing stops to protect your position from sudden adverse surges. Hedging your primary investment by using derivatives is a popular strategy.

What is the Best Payment Method for Buying Cryptocurrency in the USA?

Each platform supports a unique range of payment options because they know clients have unique personal needs. Thankfully, all major payment methods worldwide are available in the US. Therefore, it is upon you to vet the channels and select what suits your budget and needs.

• Buy Cryptocurrency with Cash: Crypto ATMs enable fast, seamless, and anonymous crypto purchases.
• Buy Cryptocurrency with Credit Card: Not ideal because most credit card companies charge high fees.
• Buy Cryptocurrency with Bank Transfer: Funds take time to reflect, but the channel is safe and affordable.
• Buy Cryptocurrency with PayPal: Fast funds transfer and very convenient.
• Buy Cryptocurrency with Bitcoin: Cost-effective, and one can purchase crypto anonymously.

Why Buy Cryptocurrency?

Cryptocurrency is no longer a buzzword, especially in the US. Instead, there is a growing feeling that digital money is powerful enough to supplant paper money. To illustrate just how significant support digital assets are receiving in the country, consider Silicon Valley’s attitude.

For example, top billionaires in Silicon Valley, such as Elon Musk, believe cryptocurrency is the future of money. In an episode of the “FYI — For Your Innovation” podcast released on Tuesday, February 19, 2019, Musk said that “Paper money is going away”.

Interestingly, Musk anchors his argument for cryptocurrency on the belief that digital money is built on a “brilliant technology” that provides “a far better way to transfer value than pieces of paper”.

Twitter’s Jack Dorsey is also an ardent supporter of cryptocurrency. He is also a top executive at Square, a digital payments company that accepts Bitcoin. Dorsey himself is a Bitcoin holder, and he was behind the idea for Square to acquire about 8,000 Bitcoin in 2020.

Interestingly, the billionaire supporters of cryptocurrency seem to be onto something. So far, cryptocurrency has shown the ability to gain value over time, something that paper money cannot accomplish.

For example, at the time of writing, the market capitalisation of the cryptocurrency ecosystem is up 73% year-to-date to $1.35 trillion. Most of the value comes from the tokens’ ability to store value better than fiat currency, such as the US dollar.

Despite the volatility in the cryptocurrency market, digital assets have demonstrated that they gain value over time. This could be a great incentive to buy cryptocurrencies today.

5 Things to Consider if You Want to Buy Cryptocurrency

Before you rush off to buy your preferred coin, there are first a few considerations that should be taken into account. It is nothing big or complicated, just a reminder of some things that you should do in preparation to do everything properly.

1. Carefully choose your preferred secure payment method

To buy cryptocurrency on a trading platform, you will first have to deposit some money and to do that, you can choose from a variety of fiat currency payment methods. Most platforms accept credit and debit cards, or wire bank transfers. Some also accept PayPal, Skrill, or some other payment method that you may prefer. As well as depositing fiat currency, often other cryptos can be deposited also.

Of course, there are things to consider there as well, such as transaction speed and fees. For example, wire transfers are the slowest — they can take up to a few days — but they are also the cheapest. Credit cards will deliver your money very quickly, but it may be expensive to use them. In the end, you will have to see which options are available, and then decide on your priorities — is speed more important than the cost of making a transaction, or is it the opposite?

2. Will you need to set up your own wallet?

The next thing to consider is setting up your cryptocurrency wallet. You see, centralised trading platforms are custodial, which means that they have wallets in which you need to deposit cryptos you wish to trade on the platform or coins that you purchased. Only after you have already placed the funds in the platform’s integrated wallet can you withdraw it to your own, private wallet, where you are the only one who holds the private keys.

For some people, leaving coins in the exchange’s crypto account wallet is fine. However, others feel that this is less safe. First of all, as long as the crypto exchange holds the private key, it is no different than the bank, and once again, you are not the sole owner of your money. Not to mention that there were plenty of hacks that resulted in users’ money being stolen from the platforms. If you intend to hold on to your cryptocurrency investment for a long period, you are better off transferring those funds into your own wallet.

3. Comparing costs

Of course, the costs are a big factor in the crypto industry. One of the reasons why the crypto industry is becoming more popular than banks is the low cost of making transactions and trading. However, even within the crypto industry, there are platforms and even networks that are considered expensive. Ethereum, for example, has an extremely expensive network, where transaction fees can go up to $50.

4. Safety and security

Naturally, security is and should be your top priority when trading cryptocurrencies. Hacking attacks are quite common, although their success rate may vary. Then, there are scammers, fake projects, and the like. In other words, you should always use all the security measures offered by crypto exchanges and wallets, like 2FA, setting up strong and complex passwords, and the like. Remember — in the crypto industry, you are the only one responsible for the safety of your funds.

5. Can you understand and navigate the platform?

Lastly, you should also check out the complexity of the platform you decide to use. There are many different platforms, and they all have a unique feel in terms of functionality. Some were designed for professionals, and such platforms are filled with advanced and complex tools that a beginner is far more likely to find confusing and intimidating than helpful. On the other hand, there are also platforms specifically designed to be simple and to help you make your first steps into the crypto world.

What Fees are Involved in Buying Cryptocurrency?

Cryptocurrencies are much cheaper to handle and use than traditional money, as they don’t go through numerous intermediaries that all wish to be paid. With that said, there are still certain fees that you need to pay, and while they are typically quite low, they are still there, and you need to be aware of them.

Deposit fees

Some platforms will charge you for depositing money, which is usually the case with brokers. The fees may vary from coin to coin and between platforms, and fiat currencies, so each case will be different.

Withdrawal fees

Withdrawal fees, just like deposit fees, exist on some platforms, while others may not necessarily have them. They are usually not that high, but you must pay them to get your money.

Transaction fees

Lastly, there are transaction fees, and these are typically very small, although they can go high during busy periods. That is, the average transaction fee can be high if you want your transaction to be among the first to get processed.

Safely Storing Your Cryptocurrency

We mentioned the need to store your crypto holdings safely and protect it from hackers, scammers, and other bad agents. We also mentioned that digital currency is stored in private wallets. What we have yet to explain is the different types of wallets, and their strengths and weaknesses.

Web Wallet

Web crypto wallets are a kind of wallet that is kept perpetually online, also known as hot wallets. Their biggest advantage is that they are always on the internet, which makes them easily accessible via browsers on computers or mobile devices. As such, they can be quickly used to withdraw money on the go or while you are at home, whenever a new opportunity to invest arises.

Mobile Wallet

Next, there are mobile wallets, which can be used as a hot, or cold storage solution. The thing about mobile wallets is that you can simply store coins and disconnect them from the internet. As such, they are perfectly hack-free, unless someone steals your phone directly. But, even then, you likely have a lock that will protect the wallet, plus the password for entry, and alike. And, if you spot a new opportunity, you can just connect to the internet and immediately start trading. As such, mobile wallets can be both safe and convenient simultaneously.

Desktop wallet

Desktop crypto wallets are similar to mobile wallets in a way that you can turn them into hot or cold storage simply by connecting them or disconnecting them from the internet. They can be even safer than mobile crypto wallets since many anti-virus and anti-malware apps can prevent hackers from invading and compromising your computer. It’s best practice to store private keys for the wallet separate from the device the wallet is on.

Hardware wallet

Hardware wallets are known as cold storage, and they are deemed the safest form of crypto wallet out there. Usually, in the form of a small, USB stick-like device, they are only available on the internet while being plugged into your computer. This makes periods of exposure very rare and brief, and they are the best type of wallet to hold the majority of your crypto wallets.

Wallet Combinations

There is also a possibility to interlink different kinds of wallets with one another and benefit from increased security or simply greater convenience. If you have crypto holdings across different coins then you might also need to choose wallet types that suit those best.

Is it Legal to Buy Cryptocurrency in the USA?

In the introductory section of this guide, we mentioned that the US does not have an express ban on cryptocurrencies. But digital money is not legal tender either. However, the Financial Crimes Enforcement Network (FinCEN) considers crypto-focused platforms such as brokers and exchanges as money transmitters. This recognition creates a legal space for the exchanges and brokers to operate, purchasing crypto in the USA legally.

Where Can I Use Cryptocurrency in the USA?

Since the last bull run in the cryptocurrency market, more companies in the US are coming to terms with the possibility of cryptocurrency becoming money. Therefore, as of June 30, 2021, 11 major companies were accepting crypto payments.

For example, Microsoft started accepting Bitcoin payments in 2014, although for the online Xbox Store only. On its part, Overstock accepts multiple coins, including Bitcoin. The company also holds a substantial amount of cryptocurrency. Other companies that accept cryptocurrency include Home Depot, Namecheap, Starbucks, Whole Foods, NewEgg, Tesla, and more.

Besides big-name brands and retailers, you can use cryptocurrency at 21,173 ATMs available countrywide, as of July 24, 2021. The tellers allow customers to buy and sell up to 11 tokens including Bitcoin, Ether, Litecoin, Monero, and Ripple.

What’s the Smallest and Largest Amount of Cryptocurrency I Can Buy?

Depending on the cryptocurrency you wish to buy, the purchasable amount can be extremely small — only a fraction of a cent. However, the amount that you can actually buy — whether the lower or upper limit — depends on the platform’s rules. Most platforms will have no upper limit provided that you are registered and verified, although some platforms let you trade unregistered to a certain amount — $2,000, for example — and not go further than that until you verify.

Can I Buy cryptocurrency Anonymously with No ID? Is it Safe and Legal to Buy Cryptocurrency?

Cryptocurrency purchases are legal in most places around the world. There are a handful of countries where it might not be legal to use cryptos as a means of payment, not even if both parties are in agreement, such as China. However, even in China, you can legally buy and own digital coins. As for purchasing it anonymously, there are still places to do that, such as P2P crypto exchange, or trading platforms that allow you to buy small amounts, such as $2,000, as mentioned above.

Will Buying Cryptocurrency Make Me Money?

Buying crypto with the intention of earning money is most people’s motivation to get into crypto. However, for some, it doesn’t work out that well, which leaves them disappointed. The reason why this happens is that a lot of traders drawn to the crypto industry by the promise of money don’t actually bother to learn much about crypto, or crypto trading, for that matter. They understand the basic concept — buy low, sell high — and they think that’s all there is to it. This is, of course, wrong. Cryptocurrencies are extremely volatile, and there is some studying involved if you want to understand their future relevance, their prices, analysing price performance, looking into different events and news and how they impacted the prices, plus the historic price behaviour, and many other factors in order to know what to expect.

In short, yes, it is very possible to make money from buying crypto, but only if you are willing to learn about the project you plan to invest in.

How to spend your cryptocurrency?

Once you buy your cryptocurrency, what exactly can you do with it? You can choose to hold it, or you can simply spend it. Only a few years ago, this would have been easier said than done, as not many merchants accepted cryptocurrencies. These days, however, many companies have issued crypto debit cards in partnership with Visa and MasterCard, which makes it possible to load your card with coins, and then use it for online or offline purchases, anywhere in the world where Visa and/or MasterCard are accepted.

How to Sell Cryptocurrency?

There is also a third option, besides HODLing or spending coins, and that is to simply sell them. You can do it on P2P platforms, centralized exchanges, decentralized exchanges, brokerages, and more. All you need to do is deposit your coins to the platform, and offer to sell the amount you wish to sell. That’s all there is to it.