How to Buy and Sell Bitcoin Safely in 2021

Person sending bitcoin safely through their smartphone to another person
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Buying and Selling Bitcoin in 2021: A Short Summary

Bitcoin continues to be the most popular cryptocurrency for crypto-investors in 2021. If you’re interested in investing in Bitcoin, we recommend you check out one of these exchanges:

  • Coinbase
  • BitBuy
  • eToro
  • Binance
  • Kraken

To sign up for an exchange, you’ll need to 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 cold or hot wallet properly and securely.
  3. Invest only with 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 2021!

With nearly 400,000 transactions happening every day, Bitcoin has become more popular than ever. Though cryptocurrency enthusiasts have been buying and selling Bitcoin since 2010, it is still confusing for a lot of potential investors. This uncertainty is largely due to the proliferation of scams and the number of untrustworthy exchanges and services online.

For those new to the world of cryptocurrency: Bitcoin is a digital asset used primarily for online shopping and investing. Bitcoin isn’t sponsored by the government but rather works through a community-based system. People in that community are able to earn coins by “mining” or buy them with traditional currency.

If you’re interested in buying or selling Bitcoin, you’ll need an online digital wallet you can link to the exchange service website you want to use. You can also use software 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. We’ll also answer your most frequently asked questions about the topic and provide some reputable sources to get you started.

How to Buy and Sell Bitcoin

bitcoinThere are a lot of different places where you can buy Bitcoin online, each with its 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.

One thing you need to keep in mind when it comes to using an exchange is that not all of them accept customers from outside of the US. This means you’ll need to make sure that the exchange you want to use is accessible from the country you live in. Also, some exchanges only accept wire transfers, while others may accept other types of payments.

There are also fees that you need to keep in mind when using an exchange. These 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.

Without further ado, here are five places where you can buy Bitcoin online.

Coinbase and 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 fifteen cryptos available and has fees that are on par with other exchanges. There are some features that 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 creating 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 six crypto options. They’ve 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, 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. (You can also log in via Gmail or Facebook.)
  4. Click the “Sign-Up” button to submit your information.
  5. You will be required to submit a Confirmation of Residence and Proof of Identity.
  6. New users also have to fill out a questionnaire based on their investing needs.

Binance

Binance is the world’s largest cryptocurrency exchange when it comes to active trading volume, and has been operating since 2017. With over 13 million active users, it’s got plenty of user-friendly features that are good for newbies. Once you’ve set up an account, you can adjust the settings to the Basic or Advanced level, depending on your familiarity with crypto trading and investing.

Binance was once rated as a top option for non-US customers, though some countries have been clamping down recently. Malaysia ordered Binance to halt operations in July 2021, and the platform has run into regulatory issues in Italy, Thailand, Germany, and Japan. As with all cryptocurrency exchanges, the US is also laying on heavy pressure as well.

As far as security goes, there haven’t been any reported breaches, though there was nearly $40 million (Bitcoin value at the time) stolen in 2019. The company said it paid back those losses to customers.

If you’d like to create a Binance account, follow these steps:

  1. Navigate to Binance’s webpage and click on the “Register” button.
  2. Enter the personal data that’s required to open a new account. You can sign up with a mobile number or email.
  3. Create your account credentials on the next page.
  4. Binance will send an authorization code to your email or mobile phone. Enter that.
  5. Once you’ve set up your account, you can pay for Bitcoin with a credit or debit card. Binance also allows P2P trading.
  6. You will be required to submit a Confirmation of Residence and Proof of Identity.
  7. If you’re new to the cryptocurrency world, you can fill out a questionnaire that will help with your investing goals.

Kraken

The Kraken platform has long been a reliable platform in the Bitcoin exchange world. It was founded in 2011 and trades with fiat and cryptocurrency. The site is a breeze to navigate and they’ve got options for every investor, from novices and seasoned traders to business owners looking to incorporate Bitcoin and cryptocurrencies into payments.

While beginners can take advantage of their easy-to-navigate site and software, it’s also great for more experienced investors. Kraken offers 69 cryptocurrency coins, margin trading, and a program that lets you loan out your coins for rewards. We wouldn’t recommend dipping your toes into those waters until you’ve fully grasped cryptocurrency trading though. Kraken has never been reported to have any hacks, which makes it a favorite among security-conscious investors.

If you’d like to register an account on Kraken, follow these steps:

  1. Go to Kraken’s site and click on the “Create Account” button. Keep in mind that you’ll need an email to sign up.
  2. Create your account credentials.
  3. Kraken will send you an authorization code to activate your account.
  4. You will be required to submit a Confirmation of Residence and Proof of Identity to buy and sell Bitcoin and other cryptocurrencies.
  5. You can set up a Starter, Intermediate, or Pro account, depending on how much experience you have with crypto investing.

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 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. Only use a secure device

Whether you’re using your desktop PC, laptop, or mobile device, you need to make sure it’s secure. There are a few things you can do to ensure your device is protected:

  • Catch up on the latest updates and security patches.
  • Get a good antivirus program. Check out our top picks here.
  • Create secure passwords and make sure to use uppercase and lowercase letters, numbers, and special characters.
  • Use a VPN. You can find more information about this in step 4 below.
  • Check URLs. You want to see a padlock and “https” in your browser when accessing Bitcoin or exchanges.
  • Don’t click or download suspicious files or programs.
  • Avoid public computers and Wi-Fi networks.

2. Find a reputable crypto 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.

It’s wise 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 helps 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, and mailing address. This information helps support the KYC requirements to keep people safe online — but also means you lose some of your privacy to fulfill 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. The trick is to read through enough varied reviews so you can get an idea of the pros and cons of potentially using that exchange for your Bitcoin buying and selling.

3. Choose the best Bitcoin wallet

Bitcoin Wallet

Once 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.

These wallets interact with the blockchain network that cryptocurrencies run on. Each wallet will have a private key — that you should never give to anyone else — and a public address for transactions, which is shareable.

Private keys let you access the wallet to make purchases, send transfers to others, or move it to exchanges. The public blockchain address allows you to receive transactions.

Depending on your needs, you can opt for a cold or hot wallet.

Cold wallets

Cold wallets are stored offline and aren’t connected to the internet. These wallets are actual hardware: they look like USBs. They’re also considered the most secure and carry the least risk. They best suit long-term investors who want to hold the cryptocurrency and believe it will be more valuable years from now.

Think of cold wallets like safes, vaults, or safety deposit boxes. You can store a lot of money or valuables in them and they’re extremely secure, but it can take time and effort to get them out. If you want to take a look at an example of a popular cold wallet, see the Ledger Nano S.

Hot wallets

Hot wallets are for active cryptocurrency enthusiasts, regular traders, and people who make lots of transactions. They’re connected to the internet and were created to make setting up and getting your Bitcoin moving easier and faster.

If you have a large amount of Bitcoin, we’d advise you to store that in a cold wallet. Smaller amounts that might be actively used are better kept in a hot wallet. If you’re looking for a hot wallet, you have different options:

  • Desktop wallets: This is software you download onto your laptop or desktop. It’s encrypted (or certainly should be) and installed onto your device. Get a strong antivirus program if your device is connected to the internet. You can look at Exodus or Coinbase’s desktop wallets for some good examples.
  • Mobile wallets: These are similar to desktop wallets, just for mobile devices like smartphones and tablets. They’re generally more convenient and have QR code transactions for those that buy, sell and trade digital currency regularly. They’re still connected to the internet, so keep that in mind. Examples of a mobile wallet would be Edge and SoFi.
  • Web-based wallets: These wallets are only accessible through the internet. While they are convenient, this makes them the most insecure for holding your Bitcoin. Websites can be targeted by DDOS and other kinds of cyberattacks. If the company underwent a data breach, your information would also be at risk.

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 that you need to make sure each is managed and secured properly. A password manager might be able to help with this.

You should always set a secure password for your wallet to make sure it’s safer 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. It’s used to retrieve your investment in case you lose access to your wallet.

4. Use a VPN when making transactions

Computer Screen With VPN and Money BagWhen you’re making any financial transactions, a VPN is an essential tool. A VPN will protect your sensitive data at all times, also when you’re transferring money.

Sometimes you might need to access your Bitcoin account — or bank account for that matter — while on public Wi-Fi at an airport or train station. A premium VPN protects you from man-in-the-middle attacks, which is when hackers try to intercept your data through insecure networks. With a VPN’s 256-bit encryption protocols, it would take an eternity for even the most skilled hacker to figure out the scrambled data. In other words: you and your data are safe.

We can recommend NordVPN for security and encryption. This VPN provider also recently came in at the top of our truly no logs VPN list.

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

Now 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.

Is it Still Worth Buying Bitcoin in 2021?

Bitcoin symbol on computerIn 2017, Bitcoin investors saw a return of over 1,300% with an all-time high of $20,000. Just a year later, Bitcoin lost over 70% of its value when it dropped from $14,000 to $4,000 at the end of 2018.

2020 was a volatile year for cryptocurrency, mostly due to the pandemic, which caused Bitcoin to drop 50% as investors in every market went to cash to weather the storm.

In the second half of 2020, global markets recovered greatly. Both the US stock market and gold reached all-time highs. In April of 2021, Bitcoin surged to more than $64,000 before crashing back down. As of late 2021, Bitcoin was hovering around $50,000.

In short, the Bitcoin market is incredibly volatile, which can be a huge risk. Even so, we wouldn’t advise you to give up on this crypto just yet. If you’ve got the stomach for it, here are three reasons you might want to consider investing in Bitcoin this year.

1. 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.

2. Bitcoin is more widely used around the world

According to data from Blockchain_wallet, Bitcoin has 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.

3. Historically, Bitcoin recovers after a crash

To date, Bitcoin has been declared dead by the mainstream media over 380 times. But 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 a historical high of $20,000 per coin. In April of 2021, it soared to $64,000.

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. For instance, you can purchase a VPN subscription without having to give away information such as your credit card or bank account details. This ease of use is in direct comparison to exchange rates between traditional currencies and the fees associated with these exchanges.

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

Buying Bitcoin with PayPal

PayPal has also taken the leap into the world of cryptocurrency. With their app, you can buy, hold, and sell crypto. A nice advantage of PayPal is that it offers the same protections on crypto as it does on other payments. If you’re looking for protection of your digital assets — just like a bank protects your USD, Euros, or home country’s currency — PayPal could be a fine option.

However, investors should be aware that buying and selling on the platform isn’t actually as straightforward as it seems. With PayPal, you can only buy and sell Bitcoin between PayPal accounts. While you do have the account and its public address, you don’t own the private key — PayPal does.

When you set up a Bitcoin account or digital wallet with any other platform, you get a private key and public address. That way, you fully own the digital asset and can do with it as you like. This is different when you choose PayPal as your crypto wallet. While you can buy Bitcoin with PayPal, keep in mind that you won’t technically own it.

This doesn’t necessarily mean that PayPal is a bad option for cryptocurrency. The decision just comes down to the consumer and how they’d like to store, buy, and sell their assets.

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 then 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 Bitcoin.

An important note: when you use a credit card to buy Bitcoin, it qualifies as a cash advance. This 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.

There are some credit cards that allow you to directly purchase cryptocurrency as a cash advance. These include:

Using these cards online is as safe as using any credit card to make purchases on the internet. Just make sure you’re being careful with your online purchases and the way you access the internet on your computer or phone.

Why you might use a credit or debit card for buying crypto

There are multiple reasons why people might choose to use their credit or debit card when purchasing Bitcoin. Firstly, 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.” In April of 2021, Bitcoin hit an all-time high of $64,000 before losing nearly 50% of that value and crashing to around $30,000 in July.

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 add 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 Bitcoin, other kinds of crypto, and browsing the web safely, since surfing online securely is of great importance when making any kind of financial transaction.

Buying and Selling Bitcoin: Frequently Asked Questions

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

If you have a debit card, credit card, or bank account, you can set up a digital wallet that you can use to store the Bitcoin you buy. With this wallet — which can take the shape of either offline hardware or online software — 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.

Yes, you can. To convert Bitcoin into cash, choose an exchange that you want to use. For a list of reputable exchanges, go to our article on buying and selling Bitcoin. Register for the broker, and complete their verification requirements. Once you’ve deposited or bought Bitcoin, you can cash it out through a PayPal or bank account (depending on the service). There are also Bitcoin ATMs in certain countries that let you pull out cash using exchange credentials.

Coinbase is one of the best exchanges available to security-conscious cryptocurrency traders and investors. While it’s usually not recommended that you store Bitcoin on an exchange — as cold and hot digital wallets are a more secure option — Coinbase has some of the highest security protocols available and there is no proof that it has ever been hacked.

Setting up trading and investing accounts for Bitcoin and other cryptocurrencies isn’t all that different from setting up a bank account. You have to provide proof of residence and some form of official identification. Once you’ve been verified, buying and selling Bitcoin can be as simple as clicking a button. For more recommendations for storing and trading Bitcoin, check out our full article.

To sell Bitcoin safely, you’ll need a reputable cryptocurrency exchange platform and account. You must make absolutely sure that the individual you’re sending the crypto to is who they say they are. There are plenty of scams out there and once you’ve sent Bitcoin to a blockchain address, it’s virtually impossible to get it back.

Though Bitcoin has become a huge speculative investment, it was created to be a payment system. Tesla Motors famously made the purchase of their electric vehicles with Bitcoin possible for a time before backing off the idea. Still, cars, boats, website subscriptions, VPNs, and even food and drink can be bought with Bitcoin these days.

Bitcoin and other cryptocurrencies are extremely volatile and price swings are tough to predict. If you do decide to invest, proceed with caution and create either a long-term strategy or a trading strategy. While gains can be tremendous, so can losses. Putting down large sums of money is only recommended for people who have a lot of knowledge about investing in cryptocurrency and have the capital to risk without putting their livelihood on the line.

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 what you bought the Bitcoin for at the time of your investment.

Tech writer
Brad is a digital security and marketing specialist with years of hands-on experience working in the industry. He enjoys researching the unblocking and streaming capabilities of VPNs. When he's not working, Brad spends his time with his wife and young daughter. He enjoys reading, playing video games, and baking in his spare time.