How To Buy Cryptocurrency In 2023
Published 13 Mar, 2022 Updated 02 Feb, 2023
Table of Contents
Cryptocurrencies are becoming more mainstream and readily available for United States (US) investors and traders to acquire. All you need to get started is a form of photo ID to create an account, and either a bank account or a credit card that you can link and deposit United States Dollars (USD).
Here is our guide on how to safely purchase popular digital currencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Shiba Inu (SHIB), Solana (SOL), Ripple (XRP), and many more from a top crypto exchange.
It comes without saying but you first need to choose a reputable cryptocurrency exchange or broker. We have reviewed the top crypto exchanges and platforms to provide you with unbiased and informative information to support your decision-making. Based on our reviews, Coinbase is the best overall crypto exchange in the United States, especially if you’re a beginner who is starting to buy your first digital assets. This guide has been prepared using Coinbase as an example.
|Exchange||Assets||Trading Fees||Our Ratings||Learn More||Promotion|
|Coinbase||190+||0.5% (maker) and 0.5% (taker)||4.5/5||Visit Coinbase Coinbase Review||None available at this time|
|eToro||25||1%||4.0/5||Visit eToro eToro Review||None available at this time|
|FTX||320+||0.02% (maker) and 0.07% (taker)||4.3/5||Visit FTX FTX Review||None available at this time|
|Kraken||102||0.16% (maker) and 0.26% (taker)||4.3/5||Visit Kraken Kraken Review||None available at this time|
|Gemini||80||0.5%||4.0/5||Visit Gemini Gemini Review||None available at this time|
|Binance||418||0.1% (maker) and 0.1% (taker)||4.8/5||Visit Binance Binance Review||None available at this time|
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How To Buy Crypto In 5 Steps For 2023
An overview of the five steps to buy crypto is as follows:
- Open an account with Coinbase.
- Verify your identity and activate 2 Factor Authentication (2FA).
- Deposit United States Dollars (USD) to finance your account.
- Select the crypto and enter the amount to buy.
- Review the transaction details and confirm.
Guide To Buying Crypto In The USA
Step 1 – Open An Account With A Crypto Exchange
Go to the Coinbase website and click on the “Get Started” button. This will redirect you to the registration page where a full name, email address, and password will be required to be provided.
Once the details are entered, accept the terms and conditions and click on “Create Account”.
Step 2 – Verify Your Identity
To comply with Anti-Money Laundering and Counter-Terrorism Financing regulations, you will need to verify your identity by undergoing the Coinbase Know Your Customer (KYC) process. This will require you to submit a form of identification.
Accepted forms of identification to complete the Coinbase verification process are summarised in the table below. Forms of US identification that are not accepted include US passports, green cards, residence permits, military IDs, or school IDs. The ID verification process with Coinbase takes less than 5 minutes to complete.
|UNITED STATES||OUTSIDE OF UNITED STATES|
|State-issued IDs such as Drivers Licence or Identification Card||Passport, government-issued photo ID, national identity card|
After the ID verification process is complete, we strongly recommend setting up 2 Factor Authentication (2FA). 2FA provides a basic level of security for the account where two methods of verification are needed to verify the account and also when funds are withdrawn.
We suggest downloading Google Authenticator on a mobile device. The process will involve the use of the authenticator to scan a QR code or alternatively input a provided code to enable authentication of the device.
Tip: If the six-digit code provided by Google Authenticator does not work, then go into the settings and sync the time correction for codes. This should rectify the issue.
Step 3 – Finance Your Account With USD
Before crypto can be purchased, your account will need to be financed with either a linked bank account or PayPal. United States Dollars (USD) can then be used to directly purchase the cryptocurrencies of your choice. Coinbase offers several payment methods to add USD, including:
- Linking your bank account to enable ACH transfers of USD into your account.
- Direct wire transfers.
Once USD has been transferred, you will be able to immediately use your funds to purchase cryptocurrencies. It is important to note that deposited USD is not available for immediate withdrawal.
Step 4 – Select The Crypto & Enter In The Purchase
Clicking on the “Trade” button on the left-hand side of the page will present all the cryptocurrencies that you can. Once you have found the digital asset to purchase, click on the “Buy” button.
Clicking this will open up a panel where you enter in a preset amount of USD to spend or a custom amount. The page will present the following:
- Amount of USD available to spend or the amount of crypto to buy.
- A drop-down menu to select a purchasing frequency (i.e. daily, weekly, fortnightly, or monthly).
Step 5 – Review & Confirm The Purchase
Click on “Preview Buy” to review the Coinbase quotation. The amount of crypto that will be purchased will be presented as well as the Coinbase trading fee. If you’re happy with the quote, click on “Buy Now” to complete the purchase. Note, that once the purchase is confirmed, it cannot be reversed and USD funds are not recovered.
Buying Crypto In The USA: Things You Should Know
What Is The Best Exchange To Buy Crypto?
In our opinion, the best cryptocurrency exchange platform to buy crypto is Coinbase. This is due to the beginner-friendly nature of the platform and the ease at which you can buy a range of digital assets to grow your portfolio. To further support beginner crypto investors, there is a wealth of educational content as well as an innovative “earn as you learn” feature.
How Do I Choose A Crypto Exchange?
With so many crypto exchanges and platforms available, beginners may find it difficult to know which exchange is best for them. Before you start buying crypto, here are a few important considerations to take on board to assist with comparing exchanges.
- Interface Usability – Beginners should ideally be seeking out a User Interface (UI) that is simplistic, intuitive to use, and therefore making the trading experience easier and more enjoyable. Features that beginners should be on the lookout for include instant deposits and withdrawals, instant buying, and selling.
- Deposit Method – The method of depositing fiat funds into the account wallet will vary from exchange to exchange. The most common ways include direct bank transfer, BPay, POLi, and credit/debit cards. The fees incurred and the speed of the transaction should also be considered.
- Fees – You should be aware of the various fees that may be incurred when trading crypto on a cryptocurrency exchange. Fees may include deposit fees (most exchanges charge zero deposit or withdrawal fees), withdrawal fees, and trading fees (between assets, e.g. Bitcoin to Ethereum). Although not considered a fee, spreads will apply to each transaction. The spread is the difference between the buy and sells price for a quoted cryptocurrency.
- Supported Crypto – Almost all exchanges will provide various coins as purchasable and tradeable assets. However, if there is a possibility of diversifying into other cryptocurrencies then the number and type of supported cryptocurrencies and trading pairs (e.g. BTC-ETH) should be assessed.
- Liquidity & Volume – The larger and more established digital currency exchanges will tend to have access to greater liquidity compared to smaller cryptocurrency exchanges. Liquidity refers to how easily one asset is converted into a fiat currency or another asset. The higher the liquidity of an exchange, the easier and faster it will be to complete fiat-to-crypto and crypto-to-crypto transactions.
- Security Measures – Before you choose a crypto exchange, ensure that they are licensed to provide crypto services in your state. Industry-standard security measures for US crypto exchanges typically include multi-location and offline cold wallet storage of funds, a combination of hot and cold fund storage, multi-signature verification withdrawal process, and 2FA. Other features may include user private key control, ID verification, notification on account activity (i.e. email and/or SMS), proof of reserve, email encryption, and 24/7 security protocol monitoring and penetration testing by third parties.
- Quality of Customer Support – Most exchanges provide a ‘knowledge’ or ‘education’ section of their website, however, some exchanges do this better than others. Beginners should explore the customer support features of the exchange. Support tools to assist with immediate troubleshooting advice or assistance may come in the form of a ticket system or live chatbot.
What Is A Cryptocurrency Exchange?
A cryptocurrency exchange is an online platform where cryptocurrencies and digital assets can be bought and sold in exchange for tokens at market prices. There are three types of crypto exchanges:
- Fiat-to-crypto exchanges where to involve the local currency (e.g. USD) is traded for crypto (e.g. BTC).
- Crypto-to-crypto exchanges where digital assets and coins can be traded for other assets, otherwise known as trading pairs (e.g. BTC-ETH).
- A combination of the above.
Types Of Crypto Exchanges & Platforms
There are three types of cryptocurrency exchange:
- Decentralized Exchanges (DEX) – A crypto exchange that is not governed by a central authority and transactions are made from peer-to-peer. Blockchain technology is the vector for the trading of assets between customers.
- Centralized Exchanges (CEX) – A cryptocurrency exchange that is governed and regulated by a central authority.
- Typically offer higher liquidity and trading volumes than DEC
- Fiat-to-crypto trading only
- More susceptible to security breaches
- High functionality
- Typically lower liquidity and trading volumes than CEC
- Crypto-to-crypto trading only
- Increased security due to the distribution of nodes on the Blockchain
- Limited functionality
Crypto Exchange Reviews & Comparisons
To find the right exchange to buy, trade, and sell cryptocurrency, MoreCrypto has reviewed the vast majority of providers in the country which are regulated and licensed to provide crypto services in each state. For more information, read our exchange reviews and comparisons below.
Detailed Exchange Reviews
- Coinbase Review
- eToro Review
- FTX Review
- Kraken Review
- Gemini Exchange Review
- Binance Review
- Huobi Global Review
- Gate.io Review
- KuCoin Review
- Bybit Review
- Crypto.com Review
- Plus500 Review
- Changelly Review
- Exolix Review
- ChangeNOW Review
- BlockFi Review
How To Store Digital Currencies
Deciding on how to store crypto comes down to two options. Firstly, crypto can be kept in the exchanges storage system, which can be cold storage (wallet), or a combination of hot and cold storage. Secondly, cold-storage wallets may be used by individuals to hold crypto offline and usually in a physical state.
- Hot storage refers to a wallet that is connected to the internet and can be accessed at any time. Examples include online cloud wallets, mobile wallets, software wallets, and exchanges. Hot wallets are great for keeping an amount of crypto available for frequent buying, trading, and selling.
- Cold storage refers to a physical means of keeping crypto in a storage device and is only accessible by the wallet owner. Examples include hardware wallets such as CoolWallet Pro and the Ledger Nano X. Cold-wallets are not connected to the internet.
Since hot-wallets (e.g. exchanges) are connected to the internet, crypto may be susceptible to loss, damage, or theft, albeit the risks are low. With this in mind, investors and traders should be seeking a reputable and trustworthy exchange that has a stellar security record. The best way to mitigate against this potential risk is to store crypto in a cold-storage wallet.
The key function of a cold wallet is to provide an extra security mechanism between the internet-connected device (e.g. computer) and the asset. All wallets will have a private key that legitimizes access to the stored asset. Most wallets usually come equipped with a variety of recovery options in case the wallet is lost or damaged.
Frequently Asked Questions
Is It Legal To Buy Crypto In The USA?
The legal status of cryptocurrencies in the USA is in a state of flux due to the ever-changing regulatory landscape. In 2014, the Internal Revenue Service (IRS) issued a notice stating that virtual currencies are treated as property for Federal income tax purposes. Therefore, it is legal to buy cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) in the US and they are subject to general taxation principles.
Which USA Crypto Exchange Has The Lowest Fees?
FTX.US and Binance have very low spot trading fees that start from 0.02% (maker) and 0.07% (taker). If you trade higher volumes or hold the native tokens of FTX.US (FTT) and Binance (BNB), then you may be eligible to receive discounts on your trading fees.
What Crypto Exchange Has The Most Coins?
According to CoinMarketCap, Gate.io offers the largest range of digital assets with over 1,300 coins to buy, trade, and sell. Available cryptocurrencies include Bitcoin (BTC), stablecoins (i.e. USDT), and a vast array of altcoins including Ethereum (ETH), Litecoin (LTC), Shiba Inu (SHIB), Solana (SOL), Dogecoin (DOGE), and many more. Depending on your state, the selection of available assets may be limited.
Where Can I Buy Crypto In The US?
The best place where you can buy cryptocurrencies is from a licensed exchange that is regulated in your state of residence. Using an exchange that is regulated by local authorities reduces the risk of fraudulent activity as the platform must adhere to strict requirements imposed by the Government.
Can I Swap Crypto Without Doing KYC?
Non-custodial crypto swapping platforms such as Changelly, ChangeNOW, and Exolix allow you to perform token-to-token exchanges without the need to create an account or verify your identity. The exchange of digital assets is performed directly from one wallet to another and is not stored by the platform.
Related: How to buy crypto in Australia
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