Quick Start Guide Pt 4: How to Buy Cryptocurrency

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In this section we’ll focus on how to buy cryptocurrency via bank transfer, credit/debit cards, or cash.

If you aren’t interested in how to buy crypto right now, continue the guide by learning the basics of How to Trade on Exchanges.

The number of options to buy your first crypto is slowly growing, but there are two main routes I recommend:

Option 1: Buy from an Exchange

I use and recommend Coinbase as a point of entry to the crypto world because it’s very easy to use and already trusted by millions of users. Plus, you can even trade on your phone from the Coinbase app. Currently Coinbase allows trading from USD/Euro/GBP to Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, with more coin support coming in the near future. Sign-up is pretty straightforward, and you have the option to purchase using your bank account or credit/debit cards. Lastly, Coinbase offers a debit card linked to your crypto account so you can spend your crypto in the real world.

Further down the page are a few other exchanges where you can use USD or credit cards if Coinbase isn’t for you.

Many credit and debit card providers are charging their customers high fees when buying cryptocurrency. Check with your card provider before using a card to buy crypto. Using bank transfers, such as when linking a bank account to Coinbase, does not incur any extra charge in my experience.

Step 1: Sign up for Coinbase. If you use the following link to sign up for Coinbase and buy $100 of crypto, we will both get $10 worth of bonus crypto.

Click Here for the Coinbase Referral Link

Tip: Coinbase has its own exchange, GDAX.com, and each has different fees. Here’s how to get the bonus AND minimize the amount of fees you pay:

The sign-up bonus is only available if you purchase crypto directly from Coinbase’s “Buy/Sell” tab. However, Coinbase charges 2-3% fees on these purchases. So, only buy your 1st $100 worth of crypto directly from Coinbase.

After you purchase $100 worth of crypto (and come out $7-8 ahead from the bonus!), you can avoid future fees by depositing USD directly from your bank account to Coinbase, and then transferring the money for free to Coinbase’s exchange, GDAX.com.

Coinbase uses Know Your Customer (KYC) procedures, like most other exchanges that allow you to purchase crypto with USD, so be aware that you will need to provide a copy of your ID and a selfie in order to verify your new account.

Once you are verified, you’ll need to link a form of payment. Do this from the “Buy/Sell” tab.

Add Your Payment Account to Coinbase

Then, once your payment method is linked, you can make your first crypto purchase.

Purchase Your First Crypto from the Coinbase Buy Sell TabPurchase your 1st $100 of crypto under the “Buy/Sell” tab to take advantage of the sign-up bonus.

Step 2: Choose the currency you’d like to buy and enter in the purchase information.

Coinbase Initial Purchase

In this example, I’m buying $100 of Litecoin, which completes right after I click the big blue buy button. Also, notice the $2.99 in fees that we’re trying to avoid on future purchases! 

Purchasing directly from Coinbase locks in the price at which you buy a crypto, but unfortunately Coinbase doesn’t let you send or trade that crypto for a few days. This is another benefit of GDAX: purchasing through GDAX allows immediate use of your shiny new crypto.

Step 3 (Avoiding Coinbase Fees on Future Purchases): Deposit USD from your bank account from the “Accounts” tab. The funds may take a few days to arrive in your Coinbase account, but you’ll pay fewer fees.

Coinbase - Make a Deposit

Step 4: Once the USD arrives in your Coinbase USD Wallet, transfer it to your GDAX account. Do this by first logging into GDAX.com with your Coinbase username and password. Then, choose to Deposit Funds from your Coinbase Account.

Step 5: As soon as your USD is in your GDAX account, skip to Part 5 of the guide.

Option 2: Buy Local

At localbitcoins.com or localethereum.com you can search for real people nearby who will sell you Bitcoin or Ethereum through a variety of payment methods. This is an excellent way to purchase crypto with cash, but I recommend meeting the seller at a public place and waiting until the transaction has gone through.

Before arranging a transaction with a local seller, you should create a wallet for the crypto you are trying to purchase. Part 7 of the guide covers wallets.

Depending on where you live, you may also be able to buy various cryptos from a Bitcoin ATM. Make sure to check fees before using this method as they may vary widely.

Other exchanges if Coinbase/GDAX isn’t your thing:

Many exchanges do not allow USD deposits, but a few other exchanges that allow purchasing of crypto with USD (via bank transfer or major credit cards) include: Kraken, Changelly, Gemini, Bitstamp, and Cex.io.

Continue the guide with Part 5: How to Trade on Exchanges