The year has started on a high for the cryptocurrency market as most of the coins saw 10% gains in the past 24 hours. This comes at a time that has seen the term “buy bitcoin” increase in the past 30 days on Google Trends, showing the interest in people purchasing the coin. Despite the various options offered to buy bitcoin across the world, investors still find it challenging to obtain and to cash out Bitcoin.

 

Google Trends Buy Bitcoin

Google Trends charts for the term “buy Bitcoin” in the past 30 days (Screenshot: Google Trends)

 

The cheapest ways to buy bitcoin have been categorized by the major methods to purchase BTC. These methods are both cheap and efficient including centralized fiat to crypto exchanges and peer to peer (P2P) exchanges. The sections below offer a quick comprehensive guideline on the cheapest methods to buy bitcoin.  

 

1.      Fiat to crypto exchanges: Bank transfers

This method is for those who wish to buy bitcoin across a well-banked economy like the US, Europe and other parts of the world. Bank transfers involve a third party exchange that can either be centralized or through a peer to peer cryptocurrency exchange.  Fiat to crypto exchanges is not the fastest way to buy bitcoins but it sure is an efficient method. 

Before purchasing BTC on the exchanges investors are urged to check the verification, fees and security status of the fiat to crypto exchange. Check the table below for the comparison between various cryptocurrency exchanges.

Exchange

Fees

Security

Reputation

Coinbase

1.5%

High

Trusted

BitPanda

5%

High

Trusted

Bittrex

~3%

High

High trust

HitBTC

3%

Moderate

Trusted

CEX.IO

3.5%

Moderate

Trusted

GDAX

1.5%

High

Trusted

Kraken

6%

Moderate

Trusted

Bitfinex

0.1% for market makers and 0.2% for market takers

Low

Low trust

Gemini

3%

Moderate

Trusted

Comparison between the cheapest cryptocurrency exchanges

 

The section gives a comprehensive guide on various ways to buy Bitcoin using bank transfers on cryptocurrency exchanges such as Coinbase, Coinbase Pro, BitPanda and other fiat-crypto exchanges across the globe. Most of these exchanges require verification and are not worldwide–acceptable such as Coinbase which is only present in 32 countries.

 

a.    How to buy Bitcoin using bank transfers from BitPanda

Note: BitPanda only allows investors from Europe to buy Bitcoins on their exchange.

1. Go to the official BitPanda Check for the security padlock sign.

bitpanda: buy bitcoin screen 1

Step 1: Go to the official BitPanda page

2. Login to your BitPanda account or sign up. Click the ‘Buy’ tab.

bitpanda: buy bitcoin screen 2

Step 2: Click the “Buy” Option

3. On the next page, choose Bitcoin, select the ‘Euro Wallet’ option and enter the amount you want to buy. Click next step.

bitpanda: buy bitcoin step 3

Step 3: Select Bitcoin as your currency of choice

4. Finish the trade by confirming the buy.

5. Wait for the Bitcoins to show in your wallet. It takes about 45 minutes to reflect.

(All screenshots are from BitPanda)

 

b.    How to buy Bitcoins on Coinbase using Bank transfers

1. Go to the official Coinbase exchange page and log in. Create an account if you are a new user, this takes less than 5 minutes.

coinbase: buy bitcoin step 1

Step 1: Go to the official Coinbase website

2. You will be directed to the Coinbase wallet account.

3. Select the buy option and choose the number of Bitcoins you want to buy.

coinbase: buy bitcoins step 24. Select the SEPA payment option.

5. Finalize the transaction and wait to receive your Bitcoins. The transaction period takes 3 business days.

(All screenshots are from Coinbase)

 

Pros of using centralized cryptocurrency exchanges

  • The fees are cheap: Fees are a standard 1.49% for every transaction amount.
  • Exchanges are very liquid with over 10+ million traders on an exchange like Coinbase, your Bitcoins will always have a market to Buy/Sell.
  • Efficient, convenient and easy to use for the new beginners in the cryptocurrency arena.

Cons of using centralized cryptocurrency exchanges

  • Only available in selected countries, locking out many willing buyers in other countries from accessing the service.
  • The process to buy is lengthy and time-consuming as it takes 3-5 days for your BTC coins to reflect in your wallet. A lot can have happened to BTC’s price during that time.

 

2.      How to Buy Bitcoins using Peer to peer exchanges

Peer to peer exchanges (P2P) offers one of the cheapest ways to buy bitcoin from anywhere in the world. Unlike bank transfers, P2P exchanges offer a fast and efficient way to purchase bitcoins. Some of the most popular P2P exchanges include Localbitcoins, Wirex and Paxful. The table below shows the comparison between the peer to peer cryptocurrency exchanges.

Bitcoin Exchange

Fees

Location

Buying limits

LocalBitcoins

0%

Worldwide

Seller decides

Paxful

0% for buyer, 1% for seller

Worldwide

Seller decides

Wirex

$3

Europe

Not decided

Table showing the comparison between P2P exchanges

 

a.    How to buy Bitcoins on Localbitcoins

Localbitcoins offers one of the easiest ways to buy bitcoin from anywhere around the world. However, the platform is also faced with multiple risks and dangers that a buyer should be aware of before purchasing bitcoin on the site. Here are some of the alerts you should be wary of:

1. The frauds on the site – The peer to peer nature of the exchange causes an increased level of scams on the site. Only trade with high rated traders with good feedback scores.

2. Some traders may price their Bitcoin too expensive. Check for the best price before purchasing bitcoin.

Steps to buy Bitcoin on Localbitcoins

1. Go to the official Localbitcoins.com website (Check for the secure green sign on the URL). Click ‘Buy Bitcoins’ tab.

localbitcoins: buy bitcoins step 1

Step 1: Go to the official Localbitcoins website

2. From the dialogue boxes on the screen, put in the amount of BTC you wish to buy, select your country and the payment option you prefer.

localbitcoins: buy bitcoins step 2 & 3

Step 2&3: Select payment method and click search

3. Click Search.

4. Choose the most favorable trader from the results section. Follow the guidelines below to choose the best seller.

5. Read and follow the trader’s terms of trade

localbitcoins: buy bitcoins steps 5 & 6

Step 5&6: Read terms of trade and finish the transaction

  1. Complete the trade by clicking ‘Send trade request’.

(All screenshots are from Localbitcoins.com)

 

b.    How to buy Bitcoins on Paxful

1. Go to the official Paxful website.

paxful: buy bitcoins step 1

Step 1: Go to the Paxful website

2. Select your preferred currency and the number of Bitcoins you wish to buy. Choose the payment option you prefer from the drop-down menu in the red box

paxful: buy bitcoins step 2

Step 2: Select the mode of payment

3. Click Search.

4. Choose your preferred seller on the results page and click ‘Buy’.

For new Paxful users click the ‘Create Account’ at the top right corner and follow the next section. If you already own a Paxful account skip to ‘Buy Now’ to complete your purchase.

5. On the next page, enter your phone number and verify the confirmation code sent.

paxful: set up account

Setting up a Paxful account

6. Select your time zone then Save Changes.

paxful: setup timezone7. Click ‘Buy Now’ and complete the transaction.

(All images are from Paxful)

 

Pros of using P2P exchanges to buy Bitcoins

  • The presence of a ready market all around the world.
  • The platform is easy for beginners to trade, buy and sell Bitcoin.

Cons of using P2P exchanges to buy Bitcoins

  • Traders tend to overprice their Bitcoin prices to compensate for the risky nature of trading on P2P exchanges.

 

Conclusion

The ways above are not exhaustive but offer the best options currently to obtain Bitcoins at the cheapest fees. Kindly do your own research before investing in Bitcoin. Always keep in mind that Bitcoin is a very volatile asset.

 

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