At the time of writing, the value of 1 BTC was USD $46,000. Some analysts believe that the value of Bitcoin could increase even further as blockchain technology becomes more mainstream. But buying a whole Bitcoin is expensive and not for the everyday trader. With more people investing in fractional amounts of Bitcoin, what is the minimum amount you can buy?
This article will discuss the smallest unit of BTC, where BTC can be purchased from, and the smallest amount that can be bought from exchanges.
What is A Satoshi?
Bitcoin’s smallest unit is called a Satoshi. It was named after the founder, or founders, of Bitcoin, known as Satoshi Nakamoto. A Satoshi is a hundred-millionth of a BTC. At the current price, a single Satoshi would cost less than a cent.
Technically, it is possible to hold just one Satoshi, but considering that the transaction fee for purchasing it would be more than the amount of Bitcoin bought, it is impractical to do so. No exchange allows you to purchase a single Satoshi.
What Is The Smallest Amount of Bitcoin That Can Be Bought?
At present, a single Bitcoin costs over USD $46,000. Given Bitcoin’s soaring price, you do not need to buy one Bitcoin. Instead, you can start with buying a part of the Bitcoin. For instance, if you invest about $1,000, you’d get a percentage of Bitcoin (about 0.022% at the current price of BTC).
The minimum amount of Bitcoin that can be bought is governed by the cryptocurrency exchange and usually start upwards of $2 in the local fiat currency. The smallest unit of Bitcoin, the Satoshi, is a hundred millionth of one Bitcoin. The trading fee would exceed the purchase price and therefore making it impractical. Minimum Bitcoin purchase amounts are in place to account for mining and transaction fees.
Do Exchanges Have Minimum Bitcoin Amounts?
All cryptocurrency exchanges impose a minimum Bitcoin amount that you can purchase. The amount varies from exchange to exchange. For instance, Coinbase has a minimum of $2 for the purchase of any cryptocurrency. The minimums are required to account for the transaction and mining fees, as the exchange has no incentive to process a transaction that costs more than the value of the transaction. Exchanges also apply a minimum amount for withdrawals and charge a withdrawal fee. However, it doesn’t mean that users cannot buy a small amount of Bitcoin. Several exchanges allow the purchase amounts of $2, $5, $10, or $100 in one transaction.
Are The Fees Cheaper If Buying Small Amounts Of Bitcoin?
Cryptocurrency exchanges compute transaction fees in two forms. A flat fee per trade or a percentage of the traded volume. In both cases, exchanges have adopted a tiered structure, contingent on the amount being purchased. This means that the fee decreases with a corresponding increase in the traded volume.
However, since a minimum fee is applicable for every trade, fees could get more expensive if the amount is less than $200. For example, a $5 order will impose $0.99 in fees, which translates to almost 20%. On the other hand, customers pay about 2-3% fees for a $1000 order.
Where Can You Buy Bitcoin From?
Though there are several exchanges in the market if you are a beginner, it’s essential to select an exchange that provides the right balance between ease of use, high security, and low fees. Some of the top crypto exchanges that can be used to buy Bitcoin include Binance, Coinbase, Kraken, and Gemini.
How Do You Buy Bitcoin?
Lately, Bitcoin’s price has surged, with the digital token reaching an all-time high of nearly $50,000. Thus, several people who have previously stayed away from Bitcoin are now wondering if it’s a good time to invest in cryptocurrency. Thus, it’s important to understand the steps to be followed to buy Bitcoin.
1. Choose An Exchange
An account is required to purchase Bitcoin. The account is created on a crypto exchange, where sellers and buyers exchange Bitcoin for other cryptocurrencies and fiat money.
2. Select An Option For Payment
Once you choose an exchange, you need to create an account and fund it. Your account can be funded through PayPal, bank transfers, cryptocurrency wallets, wire transfers, credit cards, or debit cards based on the exchange that you select. The transaction fee could vary based on the payment method that you select. For instance, Coinbase waives off the fee for electronic transfer through a bank account. However, a $10 charge is levied for wire transfers, and 2.5% of the total amount if you select PayPal.
3. Place A Buy Order
Once you have successfully funded your exchange account, an order to buy Bitcoin can be placed. Most exchange platforms allow you to purchase by simply clicking a button and inserting the amount you want to buy.
4. Select Storage option
Though most crypto exchanges provide an integrated Bitcoin wallet, some people feel more comfortable if their wallet is disconnected from the internet to avoid being hacked. Thus, crypto can be stored using your choice of online or offline Bitcoin wallet.
Frequently Asked Questions
Can I Buy 0.01 BTC?
Bitcoin can be purchased in fractions without the need to buy a full 1 Bitcoin. You can easily purchase 0.01 BTC by paying the corresponding price in fiat currency. For instance, if Bitcoin’s price is $50,000, 0.01 Bitcoin can be purchased for $500.
Can I Buy A Small Portion Of Bitcoin?
You can purchase a small portion of Bitcoin using a cryptocurrency exchange such as Coinbase, Kraken, and Binance. These platforms allow minimum amounts of BTC worth USD 2, USD 1, and USD 10 to buy obtained.
Bitcoin can be bought in fractional amounts that make it accessible to investors all over the world to start small. Purchasing a small amount of Bitcoin is a great way to build a portfolio over time, however, individuals should be mindful that crypto exchange has minimum BTC amounts and fees that may outweigh the benefit of purchasing small amounts of Bitcoin.