Bitcoin being transferred from one phone to another

How to Buy and Sell Bitcoin Safely in 2020

Last edited: September 24, 2020
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Buying and selling Bitcoin in 2020

Bitcoin continues to be the most popular cryptocurrency for crypto-investors in 2020. If you’re interested in investing your money into Bitcoin we recommend you check out exchanges like Coinbase, BitBuy and eToro. To sign up for one of these exchanges simply create an account, verify your information and connect your payment method of choice.

To protect yourself and your money when getting started with Bitcoin buying and selling, follow these quick steps:

  1. Find a reputable exchange by doing your research.
  2. Set up your wallet properly and securely.
  3. Invest only on protected devices.
  4. Only spend what you can afford to lose.

Keep reading to learn more about how to safely buy and sell Bitcoin in 2020!

Even though buying and selling Bitcoin has been possible for over 10 years, it can still be confusing for a lot of potential investors. This uncertainty is mostly due to the number of untrustworthy exchanges and services online.

For those of you who need a refresher, Bitcoin is a digital currency used primarily for online shopping and as an investment. Bitcoin isn’t sponsored by the government but rather works through a community-based system. People in that community are able to earn coins from “mining” or buying them with traditional currency.

If you’re interested in buying or selling Bitcoin you need an online digital wallet that you can link to the exchange service website you want to use. You can also use a program on your computer for your digital wallet. Some people choose to keep their digital wallet on a physical device like a hard drive so it’s not accessible through their computer unless they want it to be.

We’ve put this article together to help guide you in the Bitcoin buying and selling process, as well as answer some of your most frequently asked questions about the topic. We’ll also provide you with some reputable sources where you can get started.

Is it Still Worth Buying Bitcoin in 2020?

IBitcoin symbol on computern 2017, Bitcoin investors saw a return of over 1300 percent with an all-time high of $20,000. Just a year later Bitcoin lost over 70 percent of its value when it dropped from $14,000 to $4,000 at the end of 2018. 2020 has been a volatile year for the cryptocurrency, mostly due to the pandemic which caused Bitcoin to drop 50 percent as investors in every market went to cash to weather the storm.

In the second half of 2020, global markets have recovered greatly. Both the US stock market and gold have reached all-time highs. Many cryptocurrency investors are speculating that Bitcoin could see a similar resurgence.

Here are three reasons you might want to consider investing in Bitcoin this year.

Wall Street is Adopting Cryptocurrency

In 2019, the Intercontinental Exchange (ICE) and Fidelity launched cryptocurrency trade offerings for institutional investors. Then in May JPMorgan announced that it had started processing crypto transactions as well as offered banking services to Gemini and Coinbase. As of August of 2020, the Office of the Comptroller of the Currency said that American national banks and federal savings associations can now provide cryptocurrency custody services for investors who are interested. What this means for investors is that Bitcoin is becoming more widely accepted on Wall Street which adds further weight to the cryptocurrency’s potential investment value.

Bitcoin is becoming more widely used around the world

According to data from Blockchain_wallet, they’ve had an increase from 41 million wallets to over 52 million in the past year. Square has also reported a large increase in Bitcoin revenue for Q2 of 2020 with its Cash App generating $875 million (an increase of 600% when compared to last year). Countries around the world have also shown a dramatic increase in Bitcoin trades in 2020. These countries include Peru, Mexico, Kenya, and South Africa. This is good for Bitcoin investors because it shows a wider acceptance of the cryptocurrency which in turn brings it one step closer to being a part of the mainstream financial system.

Historically, Bitcoin recovers after a crash

To date, Bitcoin has been declared dead by the mainstream media over 380 times. This hasn’t affected Bitcoin as it always surpasses its most recent highs after a collapse. In 2013 Bitcoin reached the $1,000 mark before declining to a low of $175 for the next two years. Then, at the start of 2017, Bitcoin climbed again to $1,000 before hitting it’s historical high of $20,000 per coin.

Some of the other advantages to Bitcoin that continue to propel its growth include the added anonymity of the currency, as well as how much easier it is to use as a currency where it’s accepted online. This ease of use is in direct comparison to exchange rates between traditional currencies and the fees associated with these exchanges.

Basically, what all of this means is that Bitcoin is being adopted around the world more readily than ever before. This world-wide investment acceptance, paired with the historical data surrounding Bitcoin recovery, means that there are grounded reasons to consider an investment in this cryptocurrency.

Where to Buy and Sell Bitcoin

bitcoinThere are a lot of different places you can buy Bitcoin from online, with each having their own benefits and drawbacks. We know that security is a big concern when it comes to buying and selling Bitcoin so we’ve only listed exchanges that have a good reputation with investors.

Some things you need to keep in mind when it comes to using an exchange is that not all of them accept customers from parts of the world outside of the US. This means you’ll need to make sure you live in a country that has access to the exchange you want to use. Also, some exchanges only accept wire transfers while others may accept more types of payments.

There are also fees that you need to keep in mind when using an exchange. These fees typically include deposit fees, transaction fees, withdrawal fees, and Bitcoin network fees. Of course, there are also exchange rates and buying limits that you need to take into consideration when investing.

Coinbase & Coinbase Pro

With a user base of over 13 million people, Coinbase is considered to be one of the best places to buy and sell Bitcoin. This exchange platform is insured, secure, regulated, easy-to-use, and accessible for investors of different knowledge levels. Coinbase also has over 15 cryptos available and has fees that are on par with other exchanges. There are some features which are geo-restricted but if you live in the UK, US, or EU you can use Coinbase without restrictions.

The primary difference between Coinbase and Coinbase Pro is that the pro version uses a more complicated interface. However, people who don’t use Coinbase Pro are charged higher fees to be on the easier-to-use interface. No matter which platform you use, all trades happen on the Coinbase Pro engine.

To create an account on Coinbase just follow these steps:

  1. Visit coinbase.com and click the “Get Started” button at the top right of your screen.
  2. Create your account by filling in your name, email, and a secure password.
  3. Verify your email by clicking the “Verify Email Address” button in the email you were sent.
  4. Sign in to your account by re-entering your email address and password and clicking “Sign In”.
  5. Set up two-step verification with your phone number.
  6. Enter the seven digit access code that was sent to your phone number.
  7. Connect your bank card to your account so you can use it to buy crypto.

BitBuy

BitBuy is the best way to buy Bitcoin if you live in Canada. While most other exchanges offer limited services to Canadians, BitBuy provides an excellent user experience and fees that aren’t too expensive. Some of the benefits to choosing BitBuy include regulation by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), cold storage, and 6 crypto options. They have also gone through different financial audits without an issue.

The verification process does take some time and you’ll need to give BitBuy a number of documents to verify both your identity and address. This process could mean you won’t be able to trade for a few days while you’re getting set up on the exchange.

To create an account on BitBuy just follow these steps:

  1. Visit bitbuy.ca and click the “Sign Up to Get Started” button.
  2. Enter your email address and create a password to sign up.
  3. Click the “Verify My Email” button in the email you were sent.
  4. Select the “Sign in Here” text to sign in.
  5. Re-enter your email address and password to sign in to your account.
  6. Add your phone number to secure your account.
  7. Verify your identity by filling in the required fields in your account settings.
  8. Click the “Request Verification” button at the bottom of the page to finish your registration.

eToro

eToro is one of the most popular sites if you’re interested in trading stocks. This exchange has more than 10 million users and provides a number of benefits to interested Bitcoin investors. eToro is an established company that is regulated by the Financial Conduct Authority. They have a number of different deposit methods and have low fees for investors. eToro also has social trading and leverage trading available to its users.

One of the downsides to using eToro is that you can’t register an account if you live in Canada, Israel, Japan, or Turkey. Also, while you can buy and sell cryptocurrency in eToro, you can only withdraw fiat (traditional currency). Unlike cryptocurrency, Fiat is a currency that any government has declared to be legal tender. Some examples of Fiat include the euro and the dollar.

To create an account on eToro just follow these steps:

  1. Head over to etoro.com and click on the “Join Now” or “Trade Now” button.
  2. Enter the personal data that’s required to open a new account.
  3. Fill in the relevant information requested in the form on the next page.
  4. You can also login via Gmail or Facebook.
  5. Click the “Sign-Up” button to submit your information.
  6. You will be required to submit a Confirmation of Residence and a Proof of Identity.
  7. New users also have to fill out a questionnaire based on their investing needs.

How to Stay Safe When Buying Bitcoin

HackerIt’s true that buying Bitcoin comes with certain risks. In fact, a lot of people have been scared away from investing their money into any sort of cryptocurrency because of the high amount of scams and cybercrime that target new and even experienced investors.

There are steps you can take to ensure that you’re being careful when buying Bitcoin. Let’s break down what you should do when getting started with Bitcoin and how to protect yourself and your money each step of the way.

1. Find a reputable exchange

The first thing you need to do when researching Bitcoin is to find an exchange that has a solid reputation. We’ve provided some examples above that are good starting places for you to look into using. One good idea is to look only at exchanges that accept users who comply with KYC and AML requirements. KYC means Know Your Customer, while AML stands for Anti-Money Laundering. Each of these requirements help to prevent money laundering and terrorism funding. If the exchange complies with these regulations there’s a good chance you’re making a smart choice.

Keep in mind that to sign up for an exchange service you need to provide private information such as your full name, email address, phone number, mailing address, and more. As you saw in the steps outlined in the previous section, you have to share this information with the exchange to buy and sell Bitcoin through their service. This giving away of personal information helps support the KYC requirements to keep people safe online but also means you’re losing some of your privacy to fulfil these requests.

You should also read reviews to hear about what other people say about the exchange. Keep in mind that no exchange is going to be without bad reviews. However, just read through as many of them as you need to get an idea of the pros and cons of potentially using that exchange for your Bitcoin buying and selling.

2. Use a wallet that you trust and set it up properly

Bitcoin WalletNow that you’ve settled on an exchange, you need to find a wallet to keep your Bitcoin in after you’ve bought it. The two traditional options are either an online or offline wallet. Offline wallets are less likely to be hacked when compared to online wallets.  A good idea is to have different wallets for storing your funds so there’s less of a risk of losing your money.

Some places where you can find a digital wallet for your Bitcoin include the following:

While a mobile wallet is great for daily trading or transactions, an offline wallet is better for storing large amounts of money. The only challenge with having multiple wallets is you need to make sure each is managed and secured properly. A password manager might be able to help with this.

You should also set a secure password for your wallet to make sure it’s more safe against hackers. Setting up two factor authentication on your online exchanges is another security step you should take to protect your investment.

Backing up your wallet is also an essential step to staying safe with Bitcoin investments. All you need to do is write down a series of unique words that then make up a recovery phrase. This is typically a requirement when setting up a wallet and is used to retrieve your investment in case you lose access to your wallet.

3. Only use a secure device

Whether you’re using your desktop PC, laptop, or mobile device, you need to make sure it’s secure. Having a secure device basically means it’s caught up on the latest updates and security patches and has a solid antivirus program running. You also need to make sure you have a secure password set up on your device to make sure it can’t be accessed without your permission.

Using a VPN may also be a good idea to provide that extra level of security. Other good tips to stay safe online and keep your device secure include checking URLs (look out for “https“) for web-based wallets and exchanges, avoiding public WiFi or public computers to access your Bitcoin or exchanges, and staying away from suspicious files or programs.

4. Don’t invest money you can’t afford to lose

Moneybag with dollar sign on computerNow that you’ve chosen an exchange to use, have your wallet set up properly, and are using a secure device, you need to set a budget for your investments. When it comes to investing in Bitcoin you shouldn’t spend any money you can’t afford to lose.

Because the market can be so volatile, especially when it comes to cryptocurrency, you need to be conservative with your investments when you’re just starting out. As you become more familiar with Bitcoin and how the investment process works you can allocate more funds as needed but it’s best to start small and be safe.

Buying Bitcoin with PayPal

While you can buy Bitcoin with PayPal, most exchanges don’t allow it because of the high risk of fraud associated with this type of payment. The reason the fraud is higher on PayPal is because a buyer can purchase Bitcoin and then turn around to PayPal and say they never got it which could result in a chargeback.

Some of the different options you have when it comes to using PayPal to buy Bitcoin includes peer-to-peer marketplaces, select exchanges, and peer-to-peer lending platforms. Keep in mind that any peer-based platform is risky and you may be more susceptible to being scammed using this type of network. Also, there are typically much higher fees in place for people who use PayPal to buy Bitcoin when compared to other payment methods.

While it is possible for you to buy Bitcoin with PayPal, it’s not something we recommend. Between the higher fees and limited exchange options it’s just not the best choice.

How to Buy Bitcoin with Your Credit Card or Debit Card

Thanks to updates on exchanges it has become much easier to use your credit card or debit card to purchase Bitcoin. All you need to do is go into the account you’ve created on your exchange of choice and add your credit or debit card as your payment method. Keep in mind that you’ll need to set up your Bitcoin wallet before purchasing Bitcoins.

You should remember that when you use a credit card to buy Bitcoin it qualifies as a cash advance. This is important to consider because it means you’ll start occurring interest right away and will have to pay a higher cash advance APR. There may also be a cash advance fee you need to pay to go along with your purchase.

There are some credit cards which allow you to directly purchase cryptocurrency as a cash advance. These include the Amex EveryDay Credit Card, the Alliant Cashback Visa Signature Credit Card, the Cash Magnet Card from American Express, the USAA Preferred Cash Rewards Visa Signature, and the Blue Cash Everyday Card. Using these cards online is as safe as using any credit card to make purchases through the internet. You need to make sure you’re being careful with your online purchases and how you access the internet on your computer or phone when it comes to your finances.

If you link your checking account or debit card to the exchange you’re using you may be able to avoid a lot of the fees you run into with credit cards. The transfer may take a few days to go through but you’ll save money by using your bank account instead of your credit card.

Another reason you may want to use your debit card or bank account is that it limits the amount you can buy based on the money in your account. This is a great way to ward off temptation and keep yourself in check while investing.

What is The Future of Bitcoin?

On June 1st 2020, the price of Bitcoin dropped to $8,600 from $10,000 in less than five minutes. According to Cointelegraph.com, the degree that Bitcoin dropped without any catalysts indicates that it simply “broke down from a multiyear resistance level”.  Opinions on the recovery of Bitcoin are split with some people believing it could continue to drop while others think it will recover to retest the pivotal $10,500 area again.

Since it began, Bitcoin has been a volatile investment that has seen numbers jump and dip by double-digits. The future of Bitcoin as an investment may be difficult to predict, but the continued growth and mainstream adoption of the currency certainly adds to the renewed optimism surrounding the investment.

Additional Resources

Like any investment, it takes time to understand how Bitcoin works and how to make the most money from the market. Before you get started, you should do your research so you understand the history of Bitcoin and how trading works. Other important aspects of this type of investment include looking into the pros and cons of different exchanges, as well as setting up your wallet and payment methods.

There are countless resources available to guide you as you learn more about Bitcoin and how to buy and sell the currency for the most benefit. In addition to this article, you should also check out the Bitcoin Trading Guide for Beginners and the Bitcoin for Beginners series of articles. In addition, we recommend our useful articles about browsing the web safely, since surfing online securely is of great importance when making any kind of financial transaction.

Conclusion

We hope that this article has been useful in helping you learn more about buying and selling Bitcoin in 2020. Investments, especially cryptocurrency investments, can be difficult to get started with because of the high learning curve associated with them. However, we feel that with the right knowledge you can have a lot of fun getting into Bitcoin trading while hopefully making some money!

Buying and selling Bitcoin: Frequently Asked Questions

If you have further questions about buying and selling Bitcoin, we have you covered! Check out the following questions and answers to learn more about this topic. If you feel like we’ve missed something, just let us know in the comments below.

 

If you have a debit card, credit card, or bank account you can open a Bitcoin wallet which you can use to store the Bitcoin you buy. With this wallet, you can open an account on an Exchange website that will allow you to buy and sell Bitcoin through their investment services. These Bitcoin purchases are then transferred into your wallet.

A single Bitcoin is a computer file that gets stored in your digital wallet. You can buy and sell these Bitcoin purchases, or part of a single Bitcoin, to other people online. Every time you make one of these transactions it gets recorded in a public list called the blockchain. You make money when you sell for more than you bought the Bitcoin for at the time of your investment.

You can buy Bitcoin through online exchanges once you’ve created an account and connected your digital wallet to the exchange. You can also buy Bitcoin through peer-to-peer exchanges but these are riskier than regulated exchanges like Coinbase and eToro. To learn more, read our article about buying and selling Bitcoin safely.

As of September 2020, one Bitcoin costs just over $10,000 USD. You can purchase half of a Bitcoin for slightly over $5,000 USD. These figures do vary depending on the market and when you decide to buy Bitcoin.

Bitcoin is a risky investment because it’s so volatile when compared to more traditional investments. Putting down large sums of money is only recommended for people who have a lot of investing in cryptocurrency knowledge and have the capital to risk without putting their livelihood on the line.

Tech writer
Brad is a digital marketing specialist with years of hands-on experience working in the industry. When he's not working Brad spends his time with his young daughter and wife. Some of his hobbies include video games, reading, writing, and travelling.

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