Best Places To Invest In Bitcoins In The Us

Bitcoin has evolved from an obscure digital token to a payment method and store of value that millions believe is the currency of the future. If you're interested in buying Bitcoin, you'll first need to open an exchange or platform that allows Bitcoin trading.

There are dozens of exchanges to buy bitcoins in the United States. eToro, Kraken, and Gemini are three of the best exchanges. Most USA exchanges are online, however, you can also buy with cash at ATMs.

- Coinbase

- Gemini Exchange

- Robinhood

- eToro

- Cash App

Cryptocurrency exchanges

Coinbase is the largest exchange by trading volume in the United States and is available in over 190 countries. It offers more than 200 tradable cryptocurrencies and is particularly beginner-friendly, with an easy-to-use interface and a simple purchase process. However, it has relatively high fees and is not available in all 50 states.

Binance is another prominent name in the crypto exchange industry. Founded in 2017, it quickly rose to the top spot by trade volumes, registering more than USD 36 billion in trades by early 2021.

Gemini is also well-suited for crypto traders of all skill levels, with an intuitive user interface and a wealth of educational materials. It is available in all 50 states and offers unique features like the Gemini Earn program and the Gemini Credit Card. However, it has a convoluted fee structure when not spot trading and does not offer certain popular coins.

Kraken is one of the oldest U.S. crypto exchanges, founded in 2011. It offers a solid range of coins with competitive trading fees and is one of the few U.S. exchanges to offer margin trading and advanced order types. Kraken also provides a wide range of educational materials and has good customer service options, including a chatbot and phone support. However, it is not available in all 50 states and only accepts a select few fiat currencies.

Other notable mentions include Crypto.com, which offers over 250 cryptocurrencies, and KuCoin, which provides access to a wide library of altcoins at low fees.

Traditional stockbrokers

Researching Traditional Stockbrokers

When choosing a traditional stockbroker, it is essential to do your research. Evaluate their account features, fees, and requirements. Some brokers may require a minimum balance to open and maintain an account, so it is important to consider your investment budget. Additionally, pay attention to the types of accounts offered, such as brokerage accounts, retirement accounts, and custodial accounts. Also, look into the available asset classes for investment, as some brokers may offer a wider range of options than others.

Security and Protection

When dealing with large investments, it is crucial to ensure that your broker provides adequate security and protection for your funds. Look for brokers that are regulated by agencies like FINRA and the SEC, as this adds an extra layer of protection. Additionally, brokers should have insurance policies in place, such as FDIC and SIPC, to protect your investments and cash in your portfolio if the broker goes bankrupt.

Trading Platforms and Tools

Different brokers offer different trading platforms and tools, so it is important to choose one that aligns with your needs and preferences. Consider whether you prefer web-based, desktop, or mobile platforms, and evaluate the features offered by each broker. Some brokers provide basic charting and screening tools, while others offer more advanced capabilities. If you plan on using specific order types, ensure that the broker you choose supports them.

Customer Service and Education

Customer service is an important aspect to consider when choosing a broker. Evaluate the different ways you can reach customer support and ensure that the hours of support align with your trading activities. Additionally, some brokers provide educational materials and resources to help investors improve their trades and portfolios, which can be beneficial for those new to the world of Bitcoin investing.

Examples of Traditional Stockbrokers

Some examples of traditional stockbrokers that offer Bitcoin trading include Fidelity, Interactive Brokers, Charles Schwab, and Robinhood. Each of these brokers has its own strengths and features, so be sure to research them thoroughly before making a decision.

Bitcoin ATMs

To use a Bitcoin ATM, customers insert cash or a debit card to exchange their traditional currency for Bitcoin. Some ATMs may require the customer to have an existing account with the operator. The purchased Bitcoin is then sent to a digital Bitcoin wallet, as it is not connected to a bank account.

While Bitcoin ATMs offer a convenient and accessible way to buy and sell Bitcoin, there are some considerations to keep in mind. They often charge high transaction fees, ranging from 0.5% to 20% in exchange fees. Additionally, they can be frequent targets for scams and fraud due to their anonymous and decentralised nature. It is also important to note that Bitcoin and other cryptocurrencies are not regulated by the federal government and are not insured by the FDIC or SIPC.

Bitcoin exchange-traded funds

ETFs are traded on stock exchanges, providing investors with diversified exposure to various asset classes and the flexibility to buy or sell shares throughout the trading day at market prices. An investor can simply own shares of one ETF that is invested in those companies, instead of holding a bunch of different stocks.

A futures contract is a standardised contract where two parties agree to exchange a specific quantity of a standardised asset on a specific day for a particular price. Bitcoin futures contracts are traded on the Chicago Mercantile Exchange. So, a Bitcoin futures ETF is an exchange-traded fund that holds Bitcoin futures contracts and sells shares of the fund to investors. These shares are bought and sold on a mainstream exchange.

The first concept for a Bitcoin ETF emerged when investors and brokers noticed that Bitcoin prices were trending upward and gaining popularity among investors. This signalled an opportunity to generate returns by trading Bitcoin. As Bitcoin's price rose to tens of thousands of dollars, retail and average investors lost the opportunity to invest directly in Bitcoin. Brokerages, responding to the demand for investor access to Bitcoin, began to design Bitcoin exchange-traded funds.

The first official Bitcoin-linked ETF was the Proshares Bitcoin Strategy ETF (BITO), which mainly uses futures contracts. It was approved by the SEC in October 2021 and is listed on the New York Stock Exchange.

There are also Bitcoin futures ETFs that let investors short the cryptocurrency, such as the ProShares Short Bitcoin ETF (BITI). It's important to note that these ETFs are not entirely made up of Bitcoin futures. For the most part, they invest in traditional securities, holding Bitcoin futures contracts when they meet the fund's strategy.

If you're looking to invest in Bitcoin futures ETFs, you can purchase them through your broker or advisor if they offer them. Many Bitcoin futures ETFs trade on exchanges such as the New York Stock Exchange ARCA and Nasdaq:

• Proshares Bitcoin Strategy ETF (BITO)
• Valkyrie Bitcoin and Ether Strategy ETF (BTF)
• VanEck Bitcoin Strategy ETF (XBTF)
• Global X Blockchain & Bitcoin Strategy ETF (BITS)

Peer-to-peer money transfer apps

There are several peer-to-peer money transfer apps that allow users to buy and sell Bitcoin. Here are some of the most popular ones:

Cash App

The Cash App by Square is a robust P2P money transfer application that allows users to send, receive, and request money from others. It also enables users to buy and sell Bitcoin, stocks, and even take out small personal loans. The app charges a 3% fee for sending money using a credit card and a 1.5% fee for instant deposits.

Venmo

Owned by PayPal, Venmo is a widely used P2P service that is ideal for splitting bills and sending money to friends and family. It can be linked to a user's bank account, and transactions are free unless a credit card is used, in which case a 3% fee is charged. Venmo also offers instant cash-out transfers for a corresponding fee.

PayPal

PayPal is a well-established payment service that facilitates personal money transfers and online purchases. It can be used to send money to other PayPal users worldwide, with high transfer limits. While transfers from a linked bank account or PayPal balance are free, transactions using a debit or credit card incur a 2.9% fee, plus a 30-cent transaction fee.

Zelle

Zelle is a service offered by major US banks, allowing users to send money to other Zelle users through their bank account or the Zelle app. Money transfers between enrolled Zelle users are typically completed within minutes. However, Zelle only works with domestic banks and does not support credit cards for payments.

Google Pay

Google Pay is a digital payment app that enables users to make purchases and money transfers. It can be used to send money to anyone with a Google Pay account by finding them through their name, phone number, email address, or QR code. Transfers are free when using a linked bank account or debit card, but there is a 1.5% fee for withdrawals to a debit card.

Frequently asked questions