Bitcoin's price is way up. Here's how to buy it
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Illustration: Aïda Amer/Axios
Animal spirits appear to have returned to crypto, with anecdotal reports of newbies asking questions like — so how do you buy bitcoin?
Why it matters: For years it's been said that buying a cryptocurrency was too complicated for an untold millions of mildly interested people, but things have changed.
Let's start with exchanges, where Coinbase and Kraken are the obvious venues.
- You'll have to be 18 to open an account and will have to go through an identity check before getting on board.
- Be aware, both exchanges report a glut of new accounts and support requests right now, so don't expect to be able to start trading right away.
Fintech and payments apps like PayPal, Cash App or Strike, as well as stock-trading apps Robinhood and eToro, offer bitcoin but don't support as many other cryptocurrencies as the big exchanges.
- Customers would need all the things they'd need for a crypto exchange account and most of the apps enable folks to walk away with their bitcoin
- Just beware, crypto isn't the main fare on these apps, so some tokens and blockchains aren't supported — plus, each comes with its quirks such as minimum withdrawals, associated fees and deposit limits.
- There's also the risk of closure, nefarious or otherwise.
ETFs and mutual funds have become a newly available and ever-expanding access point.
- Big brokerages and adviser platforms have recently picked up some of the 10 bitcoin spot ETFs on the market, as have some portfolio managers.
- Bitcoin ETFs are also available on some fintech apps.
- "The thing about me is I'm old. I'm not and never going to have a cold wallet," says Matt Tuttle, chief executive officer of Tuttle Capital Management, referring to the hardware where people can store their crypto offline. "I'm an ETF guy."
Reality check: Many crypto natives will still poo poo ETF wrappers and centralized wallets, in favor of the OG way: "Not your keys, not your coins."
- "That's not owning real bitcoin," says Sam Callahan, lead analyst at specialist financial services firm Swan Bitcoin, of ETFs.
- "There's a lot of convenience there, but there's risk in the convenience. Most important thing is to buy and self-custody. Keep it secure from regulatory pressures, hacks," he says.
The big picture: The best venue for buying, selling or converting bitcoin will depend on an investor's needs, whether they intend to trade or hold (or "HODL" in crypto parlance), how much they intend to move, and their comfort level with the platform.
- Case in point: Whales might prefer to buy and sell their bitcoin using over-the-counter (OTC) trading desks, while an average Jane might find that a trading app that offers spot or ETFs suits just fine.
Fun fact: ATMs found at grocery stores — if you can still find them — either give folks the option of just buying or both buying and selling. (You'll still need your own bitcoin wallet)
- Not so fun? The convenience usually comes with a steep fee.
The bottom line: The best option is buying from your friends or family in a direct wallet-to-wallet exchange, and the worst, is meet-ups with strangers offering to do this online. Don't do that.
