Bitcoin Exchange FAQ
FAQ – Frequently asked questions about bitcoin
- Why should i buy bitcoin?
- How much does bitcoin cost?
- How can I buy bitcoin with a credit card?
- How can I buy bitcoin with a bank wire transfer?
- How can I buy bitcoin with PayPal?
- How can I buy bitcoin with an Amazon gift card?
- How can I buy bitcoin with a bitcoin ATM?
- Where can I buy bitcoin without an ID?
- Can I buy bitcoin at Walmart?
- How do you cash out bitcoin?
- Can bitcoin be converted to cash?
- When should I sell my bitcoin?
- Is there a limit to how much bitcoin you can sell?
- How much does it cost to sell bitcoin?
- Can I transfer bitcoin to my bank account?
- Can I make money with bitcoin trading?
- Can I lose money on bitcoin trading?
- How do I start trading bitcoin?
- What is the minimum investment in bitcoin?
- What is the best time to buy bitcoin?
- Does crypto trade on weekends?
- Is trading cryptocurrency safe?
- Can you lose more than you invest in bitcoin?
- Is bitcoin trading profitable?
- What is the best bitcoin exchange?
- How do bitcoin exchanges work?
- Where can I exchange bitcoin?
- Is bitcoin a good investment in 2020?
- What are the top 10 cryptocurrency exchanges?
- How does a bitcoin exchange make money?
- Are bitcoins legal?
- Why do people use bitcoin?
- What exchange is better than Coinbase?
- What is KYC?
- Why does a crypto exchange need my SSN?
Why should i buy bitcoin?
Inflation. Governments worldwide are printing money like never before. Unlimited Money. No matter if EUR, USD, CHF or JPY – all over the world, the money printer goes BRRRRRRRRRRR. Bitcoin on the other hand is finite. There will be no more than 21 million bitcoin – ever. Apart from that, bitcoin is your property – only you can access it. Unlike the money in your bank account. This money is a loan you gave to the bank- they own it and if they go bancrupt – you lose your money. With more money printing, governments will also increase financial controls, restrict transactions to some countries they dont like at the moment – with bitcoin this does not matter to you as nobody can restrict where you send your bitcoin to. Negative interest rates on bank accounts are already a thing in europe and they will likely follow all over the world. If you store your wealth in bitcoin – there is no negative interest rate. Never. These were just some reasons to buy bitcoin – and there are many more as well. Try it with a small amount, you dont need to invest a fortune. And you can buy a fraction of a bitcoin – for as little as $10. The bitcoin community welcomes you 🙂
How much does bitcoin cost?
The price of bitcoin is depending on the supply and demand on the market. There is no single bitcoin price as the trading is available on many exchanges worldwide against a lot of different assets. You can follow the bitcoin price though an index that compacts together the average prices from several reputable exchanges to have a clear idea about the market price.
How can I buy bitcoin with a credit card?
It is a very easy and quick way to buy bitcoin with a credit card, you just need to register on an exchange, select the amount of bitcoin you would like to buy and enter your credit card details. Note however that credit card purchases although they are a quick way to buy bitcoin it is usually more expensive compared to other payment methods and you also need to go through a KYC process and verify your identity in most of the cases.
Here you can find all the exchanges which support buying bitcoin with a credit card.
How can I buy bitcoin with a bank wire transfer?
Buying bitcoin with bank wire transfer is one of the most popular choices when it comes to cryptocurrency purchases. Go to an exchange, verify your identity and top up your account with depositing fiat currencies (like USD, EUR and many more) with bank wire transfers. In this case, you need to wait until the traditional payment systems (SEPA, ACH, SWIFT) process your transaction but once your funds are available on the exchange you are ready to buy bitcoin. Here you can find all the exchanges which support buying bitcoin with bank wire transfers.
How can I buy bitcoin with PayPal?
If you want to buy bitcoin with PayPal you will see it is fairly difficult to find a reputable exchange offering PayPal payment option. This is due to the fact that PayPal restricts buying cryptocurrency and also because PayPal has the buyer protection policy. Bitcoin sellers can find themselves in a difficult situation if a buyer asks for a refund as bitcoin transactions are irreversible, but on the other side, PayPal may reverse the paid funds. Still, it is possible to buy bitcoin with PayPal on P2P exchanges from other individuals and also from exchanges offering CFD trading. Here you can find all the exchanges which support buying bitcoin with PayPal.
How can I buy bitcoin with an Amazon gift card?
It is also an option to buy bitcoin with Amazon gift cards. In this case, you need to find another counterparty who accepts your gift card in exchange for transferring bitcoins. The best place is that is a P2P exchange, a market place where other individuals offer selling bitcoin for various payment methods, including gift cards. Here you can find all the exchanges which support buying bitcoin with gift cards.
How can I buy bitcoin with a bitcoin ATM?
Buying bitcoin from a bitcoin ATM is a bit different than the other payment methods listed above. In case of a bitcoin ATM, first, you need a wallet where the ATM will send the bitcoins and you might also need to provide an ID upon purchase depending on the type of ATM you find. You can usually enter the bitcoin address with a QR code to avoid any typos, so make sure you have a mobile crypto wallet handy when buying bitcoin from a bitcoin ATM. In terms of payments, most ATM accepts cash and credit cards. Select the amount of bitcoin you want to buy, enter the payment details and your wallet address and after payment confirmation, the bitcoins will be sent directly to your wallet.
Where can I buy bitcoin without an ID?
It is possible to buy bitcoin without an ID, anonymously but it is getting more and more difficult to do so due to tightening AML regulations. Still, it is possible to buy bitcoin without ID, just consider that most exchanges restrict anonymous bitcoin purchases to certain limits. Here you can read more about buying bitcoin anonymously.
Can I buy bitcoin at Walmart?
Funny as it goes but you can buy now bitcoin in Walmart stores as well, although not necessarily from Walmart. Buying bitcoin at Walmart is now referred to as the P2P bitcoin exchanges, where individuals meet at Walmart and exchange bitcoins for cash. You and your P2P trading partner can also utilize Walmart2Walmart Money Transfer service or Walmart Gift Cards to execute the transaction.
How do you cash out bitcoin?
In order to cash out bitcoins you need an exchanger where you can sell bitcoins. After selling your bitcoins on an exchange you have a couple of options to cash out the funds: you can request payment to a bank account, to a credit card and in some cases to some alternative payment provider like Skrill or Payoneer. Withdrawal times depends on the chosen payout method, generally speaking, bank account withdrawals are the slowest but cheapest options while credit card withdrawals cost the most but you get the funds nearly instantly.
Can bitcoin be converted to cash?
Certainly, you can sell bitcoin for cash. If you want to convert bitcoin to cash you have two options. You can meet with a fellow bitcoiner that you can find on a P2P marketplace and sell your bitcoins directly to them for cash. Another option is to use a bitcoin ATM, where you can send your bitcoins to a specific address then after the payment confirmation you can withdraw money from the bitcoin ATM just like in the case of any other ATM.
When should I sell my bitcoin?
Timing the market is pretty difficult, so there is no one answer to when should you sell your bitcoins. It really depends on your own circumstances, consider the following items: what was your entering price, what is your profit expectation and how much money you need at a given point in liquidity.
Is there a limit to how much bitcoin you can sell?
There is no limit on how much bitcoin you can sell, you can sell all of your bitcoins if you want. The only thing you need to consider is that some exchanges limit the amount of money you can withdraw from a platform especially if you did not verify your account yet. Make sure you check the applicable limits on your exchange before initiating a withdrawal.
How much does it cost to sell bitcoin?
Selling bitcoin is very similar to buying bitcoin. There is a market price provided by the exchange you are using on which you can place a sell order. Trading, including making a sell order usually invoices a trading fee that can vary between 0.1% and 1%. Once you have sold your bitcoin, you might also need to pay a withdrawal fee depending on the payout method chosen, this can range widely from exchange to exchange so make sure to read the fee schedules of your chosen exchange.
Can I transfer bitcoin to my bank account?
You cannot transfer bitcoin to your bank account directly, but it is possible to convert bitcoin into fiat currency, like USD or EUR and transfer that funds to your bank account. Bitcoin and the traditional banking system run on two different infrastructure so there is no direct link between the two systems. Although recently some banks have started to offer bitcoin accounts, this is still very rare in the global financial system.
Can I make money with bitcoin trading?
Yes, it is certainly possible to make money with bitcoin trading. But just in case of everything else in life, there is no free lunch. You have to dedicate a certain amount of time to learn how trading works and the specialties of how cryptocurrency and its markets work before risking your money. Here is our trading guide for beginners and some useful trading strategies that will probably help you to get started.
Can I lose money on bitcoin trading?
Yes, you can lose money while trading bitcoin. Cryptocurrencies are a very new asset class, therefore the market is not as matured as traditional financial markets. This leads to high volatility and sometimes a low liquidity period that can cause you losses even if your underlying strategy and the hypothetic trend were originally good. Bitcoin and altcoins are very sensitive to news so consider risk management tools when building your trading strategy.
How do I start trading bitcoin?
First, you need to select a trading platform where you can sign up. You can trade bitcoin directly or use CFDs which are usually cheaper. Once you have signed up, make sure you verify your account if needed and review the trading fees before starting trading to avoid any unnecessary surprises. Next comes your strategy. You must have a trading plan that considers your expected investment time horizon, profit goals, risk attitude, and liquidity. Make sure you know what you are doing, do your homework and study both the market and the asset, in this case, bitcoin itself. Once you are done with your research, set up your risk management tool, like stop loss, take profit order. Automate your trading as much to remove any emotional action. Hit the button and start trading bitcoin!
What is the minimum investment in bitcoin?
The the smallest fraction of bitcoin is 1 satoshi which equals one hundred millionth (1:100 000 000) of bitcoin. Technically speaking this is the smallest amount of bitcoin you can purchase. However, the minimum amount you can buy on exchanges may be higher than this and it really depends on the platform you choose. The average is around $20 worth of bitcoin or 0,001 BTX that you can buy usually on an exchange.
What is the best time to buy bitcoin?
Timing the market is very difficult, even successful traders might miss an opportunity if an unexpected event diverges the price from long term equilibrium. Having said that you can consider the dollar-cost of averaging which is a method to buy an equal amount of bitcoin on a regular basis (like $100 worth of bitcoin on each Monday). This method flattens the price volatility and lets you buy bitcoin on an average price.
Does crypto trade on weekends?
Crypto markets are open 24/7 so you can buy bitcoin any time of the day, including weekends. However it worth noting that on institutional markets, like CME (Chicago Mercantile Exchange) there is no trading going on on weekends. This sometimes results that on the spot market the bitcoin price is different than what you can see on the institutional market especially on weekends if there is some price moving news strike in. This phenomenon is called as the CME gap.
Is trading cryptocurrency safe?
Trading bitcoin and other cryptos are just as safe as trading stocks. You need a reputable platform to trade which has sufficient safety measures in place to protect your funds. Trading is always risky in the sense that your capital is at risk only trade with as much you can afford to lose. Here is our trading guide for beginners which will probably help you to get started.
Can you lose more than you invest in bitcoin?
Generally speaking you can only lose as much money you have invested initially in bitcoin in case the price goes to zero. Bitcoin prices cannot be negative. However if you have entered into a leveraged position, so that you have borrowed money to increase your exposure to the market, it is possible to lose more than your original investment. Make sure you understand how margin trading works before jumping into it.
Is bitcoin trading profitable?
Bitcoin trading can be a very profitable activity if you are doing it right. The volatility on the market is a lot higher compared to traditional assets like forex or stocks, which can help you to achieve a better returns with adequate strategies. However, the price movements also mean you can lose more than on the traditional markets if you pick the wrong side of the market or you do not use risk mitigating tools. In order to profitably trade bitcoin, you need to dedicate time to learn how cryptocurrency and market work, but if you have done that you are ready to earn profits.
What is the best bitcoin exchange?
There are hundreds of bitcoin exchanges currently on the market. Picking the best exchange depends on your individual situation. You need to consider how would you like to pay: with a credit card, bank transfer or cash and if you want to stay anonymous or not. Another factor is how quickly you would like to receive bitcoins, for example, cash and credit card purchases are the quicker but more expensive options. If you would like to engage in trading frequently you need a platform with low trading fees. Depending on your residential location you also need to consider which exchange works in your country. And make sure you check the security features of exchanges as there your funds will be on the platform. One of the best bitcoin exchanges we recommend is Cex.io for credit card purchases, Kraken for low fees, Binance supporting hundreds of altcoins and eToro offering cheap trading options.
How do bitcoin exchanges work?
A bitcoin exchange is a place where you can interchange bitcoin to fiat currency, like USD and EUR or you can exchange bitcoin to other coins. There are different types of exchanges, many of them have a centralized trading system you when you buy bitcoin your order is fulfilled automatically. Depending on how you want to buy bitcoin, you can pay with a credit card, in this case, a bitcoin exchange work just like a webshop, where after the payment you get the bitcoins right away. If you choose bank transfers then first you need to deposit an amount onto your account on a bitcoin exchange and only when the funds have been transferred and become available, then you will be able to buy bitcoins.
Where can I exchange bitcoin?
You can exchange bitcoin on bitcoin exchanges, platforms that buy and sell bitcoin. There are options to exchange bitcoin to fiat currencies, like USD and EUR or you can exchange bitcoin to other altcoins. You can buy/sell bitcoin directly from the platform or you can use a P2P trading platform to engage other users who have bitcoin. In this case, you can meet even personally with your counterparty who buy/sell bitcoin to you. In terms of countries, most countries allow exchanging bitcoin but make sure you check the supported countries list of the exchange you choose.
Is bitcoin a good investment in 2020?
Bitcoin has proven during the past couple of years that if you hold long enough bitcoins your portfolio will be probably profitable in the long run. Timing the market is however very difficult, you may want to consider dollar-cost of averaging, a technique that smoothens your bitcoin purchases over a longer period of time. Bitcoin can be a good investment in 2020 if you consider your own circumstances, specifically the amount of money you can invest, the time horizon and your risk-bearing attitude. Bear in mind, that cryptocurrencies and bitcoin are very volatile, their price can change rapidly and sharply, only risk the amount of money you afford to lose.
What are the top 10 cryptocurrency exchanges?
Here are the top 10 cryptocurrency exchanges we recommend. Cex.io is a good exchange to buy bitcoin quickly with a credit card. On Kraken, US users can buy bitcoin quick and easy with low fees. If you want to buy or exchange other coins other than bitcoin, Binance offers 200+ different altcoins for trading. Speaking of trading, eToro is the best CFD platform where you can even follow other traders with a successful track record to build your own portfolio. Users from Australia and New Zealand will find Terraxa the best option for buying bitcoin. Looking for high volume and liquidity on the market? Bitfinex is the place you need. If you do not have a bank account and want to buy and sell bitcoins quickly, Bitquick will help you to do that. Buying bitcoin anonymously with cash is still an option nowadays on LocalCoinSwap which is a P2P trading platform. Need help with buying bitcoin? CoinMama’s support team is the best on the market, they will help you through the process. If you want to buy bitcoin with PayPal, XCoins is one of the last exchange support this payment method, you might want to try them.
How does a bitcoin exchange make money?
A bitcoin exchange can make money from two sources. One is the various fees they charge. There can be deposit and withdrawal fees, account opening fees and trading fees. In case of margin trading, a couple of other charges may be relevant, such as margin rollover fee for open trades or margin opening fee. The other option for bitcoin exchanges is to make money from the difference of the buy and sell bitcoin prices, called the bid-offer spread. The higher the spread between the buying and selling price on an exchange the more money the exchange makes on offering trading bitcoin.
Are bitcoins legal?
Yes, bitcoins are legal in almost all countries. Here is a list of countries broken down by the legality of bitcoin by territory. As you may see, it is legal to use bitcoin in most parts of the world, and only a handful of countries apply legal restrictions on cryptocurrencies. As of now only China, some African and South-American countries banned bitcoin completely. Check your local regulation in terms of buying, holding and taxing bitcoin.
Why do people use bitcoin?
Bitcoin is a decentralized currency that is used by people because of its value-added features. If used correctly, bitcoin can be an anonymous payment method, a hedge for inflation and a low-cost transfer method for large, international transactions. People use bitcoin to pay for goods and services, to trade for profits and diversify a portfolio.
What exchange is better than Coinbase?
Although Coinbase is one of the most user-friendly bitcoin exchanges it has its own issues including non-responsive support and high fees. There are several other cryptocurrency exchanges that are better than Coinbase. Cex.io is a great platform to buy bitcoin with a credit card in a user-friendly way, US users can use Kraken legally to buy bitcoin, Binance has much more altcoin offerings than Coinbase, while eToro’s trading fees are lower than Coinbase.
What is KYC?
KYC is the short abbreviation for Know-Your-Customer processes employed by cryptocurrency exchanges. In order to comply with anti-money laundering (AML) regulations, bitcoin exchanges require to identify personally their clients. This means you need to provide a valid photo-ID, like a government-issued passport and a proof of address, like a utility bill to the bitcoin exchange so they can verify your identity.
Why does a crypto exchange need my SSN?
Crypto exchanges require your SSN or other photo-IDs, like government-issued ID cards and passports to identify their customers to be compliant with anti-money laundering regulations worldwide. This process makes sure the funds you use in cryptocurrency trading are not used in money laundering or terrorist financing activities.