How to Buy Cryptocurrency in Colombia in 2024

Step by Step Guide - How to Buy Cryptocurrency in Colombia

For some people, especially those new to the market, buying cryptocurrencies can be a tough task. The steps outlined below will make it easy for you to buy cryptocurrencies.

Step 1: Find an Appropriate Platform to Buy Cryptocurrency

There are hundreds of exchanges and brokers providing services to traders globally. Some of them are available to Colombian investors and traders. With such a huge number of platforms, it is hard for Colombians to choose the best ones. The trading platforms are different since they offer varying services and features to their customers.

If your aim is to be a long-term investor, crypto exchanges should be the first place to consider for an easy purchase of cryptocurrency. Cryptocurrency brokers, on the other hand, allow you to enjoy a quick, hassle-free trade in the form of CFDs. 

It is recommended to use regulated cryptocurrency exchanges and brokers. While some unregulated platforms offer excellent features like low fees, you are leaving yourself open to hacking and scams if you use such platforms. For the safety of your investment, ensure you use a regulated crypto exchange or broker.

Step 2: Registration / Create a New Account

After deciding on the exchange or broker you wish to use, open a trading account via their official websites. Most exchanges or brokers allow you to register on their platforms using an email address or a phone number.

Once the platform accepts your new account, you need to complete the Know Your Customer (KYC) process before you can buy the cryptocurrencies. For these processes, you will submit your documents to confirm that your account details tally with your real details. Some of the required files include a copy of your photo ID (such as a passport) and also proof of address (documents like a bank statement), and a selfie.

The KYC and AML processes are designed to ensure the safety of your personal details and funds. With KYC, criminals and fraudsters find it hard to impersonate other people and launder money or manipulate the cryptocurrency market. KYC and AML are becoming popular in the cryptocurrency market, just like they are in the forex, stock and commodities market.

Step 3: Deposit Funds

After verifying your exchange or brokerage platform account, you are ready to buy the cryptocurrencies. However, you will need to fund the trading accounts before you can use them. Colombians enjoy a wide range of payment options with exchanges and brokers. Some of the top payment methods available in Colombia include bank transfers, credit and debit cards, and even cash payments sometimes (such as P2P).

Before you choose a crypto exchange or broker, go through their services to see if they offer your preferred payment method. This process makes it easier for you to decide on the best platform to open an account.

Step 4: Start Trading or Buying Cryptocurrency

With the funds now in your trading account, you can start trading or buying various cryptocurrencies from brokerage platforms or crypto exchanges. When you choose a broker, you will be investing in cryptocurrencies through derivatives like CFDs or futures. They are investment vehicles that allow you to bet on the price movement of the various cryptocurrencies without being in charge of the underlying security.

Cryptocurrency exchanges, on the other hand, allow you to buy and hold real coins and tokens. On some exchanges, you can purchase the cryptocurrencies directly using the Colombian Peso (COP). Some of the trading pairs include BTC/COP and ETH/COP.

Some crypto exchanges like Binance allow traders to access cryptocurrencies as contract features, while we have brokers such as eToro that allow you to buy and hold the actual coins or tokens.

Step 5: Optional Steps

After you have purchased your preferred crypto, you can decide to use it for other activities to either boost your investment or secure the assets. Some of these steps are described below. 

• Store in an external wallet: You can move the cryptocurrencies to an external cold storage or hot wallets to ensure adequate security for your investment.

• You can stake the cryptocurrencies that use the Proof of Stake protocol via the supported exchanges or wallets. Thus, allowing you to earn more profits on your investment.

• Derivatives traders can hedge crypto investments and earn more profits.

• You can also use your coins or tokens for voting, allowing you to participate in the governance of the network.

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

There are numerous payment options available to you in Colombia. The payment option you choose depends on your convenience and other factors such as the speed of transactions and fees.

Some of the payment options available on Colombian crypto exchanges and brokerage platforms include:

• Buy Cryptocurrency with Cash: You can use peer-to-peer exchanges to buy cryptocurrencies.

• Buy Cryptocurrencies with Credit Card: Credit cards are the most popular option since they are fast and secure. But the fees attached to this method are usually higher than the others.

• Buy Cryptocurrency with Bank Transfer: This method commands low fees, and it is secure. However, the transaction period sometimes spans days.

• Buy Cryptocurrency with PayPal: PayPal is not available as a payment method in Colombia except for some P2P platforms. 

• Buy Cryptocurrency with Bitcoin: You can purchase cryptocurrencies with the leading cryptocurrency, Bitcoin. 

Why Buy Cryptocurrency?

Each investor or trader has a reason for buying cryptocurrencies. However, one of the most obvious reasons for buying cryptocurrencies is their performance over the past few years. Since Bitcoin broke into the scene twelve years ago, no financial asset has outperformed it. Its performance has surpassed the stock, forex and commodities markets.

Bitcoin, Ether, XRP, DOGE, LTC, and several others have all generated thousands of percentages in profits to investors, especially the early-market entrants. At the start of the year, Ether (ETH) was trading at $722 per coin. However, it surged by over 500% to reach its all-time high at $4,297 on 11 May, 2021. 

Despite its price currently down at $1,900 per coin, ETH’s price performance still puts it at roughly 300% year-to-date. DOGE is another cryptocurrency that has delivered over 6,000% after reaching $0.74 on 8 May, 2021. Massive returns are one of the core reasons why people consider buying and investing in cryptocurrencies.

The price increase is due to the rising adoption of the cryptocurrencies. Cryptos have gained massive adoption from retail and institutional investors over the past few years. More corporate entities are entering the cryptocurrency market and using their blockchains for various reasons. The peak of the adoption came when El Salvador adopted Bitcoin as a legal tender, making it the first country to make such a move in the world.

Hence, while there are various reasons to buy cryptocurrencies, the massive price performance and the increasing adoption are some of the reasons why you should consider buying coins and tokens.

Is it Legal to Buy Cryptocurrency in Colombia?

It is legal to buy cryptocurrencies in Colombia and you can reed more about this in our Columbia tax guide. There are no restrictions for cryptocurrency exchanges or brokerage platforms in Colombia. Hence, you can choose your preferred trading platform and buy cryptocurrencies with them.

However, for the safety of your investment, we always recommend buying or trading on regulated exchanges and brokers. This helps you avoid any situation that could result in loss of investment or other valuable data.

Where Can I Use Cryptocurrency in Colombia?

Colombia is one of the most progressive cryptocurrency countries in Latin America. You can deposit and withdraw Bitcoin from the 49 Bitcoin ATMs available in Colombia. There are 29 Bitcoin ATMs in Bogota, Medellin (6), Bucaramanga (3), Pereira (3), Cali (2) and one each in La Hormiga, Armenia, Barranquilla, Cartagena, Cúcuta and San Andrés.

You can also use Bitcoin or other cryptocurrencies to pay for goods and services in various parts of Colombia. There are several retail outlets and online platforms in Colombia that accept cryptocurrencies as payment options.