How to Buy BTC for Fiat in 2020
A recent study published by the Tokenist has shown that the number of people who trust cryptocurrencies rather than banks has grown by 27% over the past three years.
Crypto has been gaining popularity for a while now – pretty much everyone on the Internet has at least heard of Bitcoin. As more people become interested in cryptocurrencies, the demand for them rises, with supply following suit. More and more crypto purchasing services appear, fit for all tastes and needs. However, not all of them are equally good, and some may even lead to legal trouble. Consider what risks you can and cannot take, and choose the platform that you can be confident in.
In this article, we’ve collected the most popular ways to buy cryptocurrencies for fiat. Keep reading to find the one that suits you best.
According to Coingecko, there are currently more than 400 exchanges on the market. The most popular ones are Binance, Huobi, Kraken, etc. Most of them let users purchase crypto for fiat.
Cryptocurrency exchanges are suitable for those users who not only want to buy crypto for fiat, but also trade it. Purchased cryptocurrencies are not withdrawn directly to your crypto wallet, but are first sent to your account on the exchange.
Let’s overview the three most popular exchanges.
Binance cryptocurrency exchange is one of the most liquid and popular exchange platforms in the world. It lets users purchase over 170 cryptocurrencies for 30 fiat currencies. All you need to start buying is a verified account and a bank card. In order to verify the account, a user has to provide a government-issued ID as well as a selfie. In 2020 Binance announced a partnership with Payeer, a global payment network.
Binance works with several providers, including Simplex, Paxos, and Trustoken.
After the transaction is completed, the cryptocurrency remains in your account in the exchange’s internal wallet, so if you wish to use it outside of the platform, it has to be withdrawn to your own wallet. Please note that Binance charges a rather high commission for withdrawing funds. For example, the withdrawal fee for Bitcoin is 0.0004 BTC.
For more information, visit their website: Binance.com
Coinbase.com is both a platform for buying and selling cryptocurrency and an online crypto wallet. It consists of three different services.
The availability of cryptocurrencies and the amount of fees you have to pay may vary depending on your country of residence and payment method. The following fiat currencies are available: USD, EUR, GBP, AUD, CAD, SGD.
Coinbase’s most crucial disadvantage is its limited selection of digital assets, as it supports only 23 cryptocurrencies. In addition, similar to Binance, you will have to go through the verification and after the purchase, the cryptocurrency will go to the custodial wallet of Coinbase.
Compared to simple exchanges, exchange aggregators make it both easier and more profitable to buy crypto for fiat for external usage.
They streamline the whole process, reducing the time it takes you to go from thinking about buying a cryptocurrency to having it in your wallet. You just enter your payment info, your wallet address, and then after a short while the crypto is yours! It also saves you money, as you don’t have to pay the withdrawal fee. Commission fee is usually included in the amount you have to send to the exchange, so everything is fully transparent.
Let’s review three of the most popular crypto aggregators.
Changelly is a non-custodial service that allows users to exchange, buy, or sell cryptocurrency. With regard to purchasing crypto, Changelly aggregates competitive fiat-to-crypto offers, making it easier to find the lowest price. A wide range of payment methods is available, from cards and bank transfers to Apple Pay.
The list of fiat providers Changelly works with includes big names such as Simplex, MoonPay, Coinify, and others.
All the crypto you buy is sent directly to your wallet. Transactions on Changelly usually take no more than 15 minutes, though the time may vary depending on how congested the blockchain is.
What’s great about this platform is that they have quite a wide variety of digital assets available for fiat purchases: you can buy over 90 cryptocurrencies for more than 40 various fiat currencies. However, please note that not all offers are available in all regions so these numbers may vary.
Founded in 2017, CoinSwitch is an Indian cryptocurrency exchange aggregator. Within the service, users can exchange about 100 crypto coins. However, there are only 15 cryptocurrencies to buy with fiat money. The service supports USD (US Dollar), EUR (Euro), JPY (Japanese Yen), RUB (Russian Ruble), etc. CoinSwitch accepts only MasterCard and Visa.
Before purchasing coins, the service asks you to give some personal info: your email, address, name, date of birth, country of residence, phone number. CoinSwitch charges a fee that is already included in the final purchase price.
P2P exchanges are cryptocurrency trading platforms that provide a direct connection between the seller and their client. The buyer transfers the money to the seller’s account, who then sends back the cryptocurrency via the exchange. The only intermediary in a P2P exchange is a program that transfers cryptocurrency from the seller’s deposit to the buyer’s wallet.
What are the advantages of P2P exchanges? First of all, the buyer does not have to pay a commission to deposit, exchange, or withdraw funds. The buyer sends the money to the seller’s account and receives the cryptocurrency in their wallet. The seller pays a commission that amounts to 0.5-1% of the transaction amount.
Secondly, sellers on P2P exchangers accept many different payment methods, from electronic money to gift cards and bank card transfers. Also, these exchanges protect users. The exchange blocks the seller’s deposit during the exchange. If the seller does not complete the transaction, arbitration helps the buyer to receive their cryptocurrency.
However, there are some serious risks involved in buying crypto via P2P exchanges, as hackers frequently use them to sell stolen cryptocurrency. In order to quickly get rid of illegally acquired funds, scammers often set a price below the market price. We recommend you to not buy cheap crypto from low-rated sellers.
Now, let’s overview the two most popular and trusted P2P exchanges.
Paxful is a peer-to-peer exchange that lets users buy and sell BTC using a lot of different payment methods. The platform was launched in 2014, and since then its user base has grown to 3.30 million users. Paxful provides every user with a free wallet to store Bitcoins. The seller has to pay fees.
LocalBitcoins is a veteran of the crypto industry. Launched in 2012, this P2P platform has been offering fast and anonymous Bitcoin purchases for almost a decade.
LocalBitcoins lets users buy and sell BTC without any fees. Transactions to other LocalBitcoins users are also commission-free. However, if you want to transfer your BTC to any other wallet, the usual Bitcoin Network fees will be charged.
Many wallets have a built-in function that allows users to buy cryptocurrencies for fiat. If you already have a wallet, check whether it offers this feature. It makes it possible to buy a cryptocurrency for dollars or euros and get it right away in your wallet. This is especially convenient when using a mobile wallet, as then crypto is only a few finger taps away.
However, when you buy crypto in your wallet, it is unlikely that you will be able to choose a specific payment provider. The exchange rate that wallets offer is often higher than the one on exchanges.
Buying cryptocurrency in terminals was once in demand, but over time this method has lost its attractiveness. There are three reasons for that.
Firstly, the prices are much higher than the ones on online exchanges.
Secondly, it can take anywhere from several hours to several days for crypto to reach your wallet, which is unacceptable considering how volatile the crypto market is.
Thirdly, the lack of technical support. In case of terminal failure, you will probably have to wait for a while before your money is refunded – if it is refunded at all.
To conclude, it is safe to say that in most cases cryptocurrency exchanges and exchange aggregators are the most suitable options to purchase cryptocurrency. The former is a better choice if you plan on doing any further trading on the same platform, while the latter are a more efficient way of gaining digital assets for external usage due to an easier cashout process. Finally, although it is up to you to decide which cryptocurrency you are going to buy, please be careful and pay attention to Bitcoin’s price, as all altcoins can be affected by its volatility.