2017 was the year of cryptocurrencies, where crypto-trading became one of the most profitable and popular forms of trading, overtaking traditional stock and forex trading in terms of popularity. Bitcoin has undoubtedly been at the forefront of this cryptocraze since its inception, and all other cryptocurrencies and altcoins are either directly or indirectly affected by Bitcoin’s volatile price movements. Cryptocurrency Exchanges have emerged as the go-to destination for crypto-traders, especially in 2017 and 2018, usually by exchanging other altcoins for Bitcoin. However, acquiring Bitcoin is not limited to only crypto-exchanges, and a number of companies have started offering Bitcoin purchasing services in order to capitalise on the increased demand for cryptocurrencies.
Buying Bitcoin without Exchanges
Due to the overwhelming number of Bitcoin exchanges in operation, it can get quite confusing to narrow them down to the best options. Luckily, the latter part of 2017 and 2018 has seen an influx of companies offering alternate options to buy Bitcoin. Several Over-the-counter purchasing options are being offered by a myriad of companies, where traders have the option of buying Bitcoin through Credit Cards, PayPal Accounts, and even Debit Cards. Many traditional cryptocurrency exchanges have also started offering similar services in recent times.
There are several reasons why many traders and investors flock to brokerage firms and companies over a normal cryptocurrency exchange. One big advantage is that they protect the trader’s capital from price slippage. Price Slippage refers to the loss of a substantial chunk of a trader/investor’s capital when they sell through an exchange. Normally, Sell orders which are substantially large can cause the price of Bitcoin on the exchange to fall, as more of it is pumped in. There is no hard and fast rule to quantify the amount of slippage on an exchange; with several experts agreeing that it can reach up to 10% if a big enough sell order is in motion. Purchasing Bitcoin through Debit Cards, Credit Cards and PayPal accounts are thus more profitable, especially for large traders. Many exchanges have also started providing direct payments methods involving Credit cards and PayPal accounts.
Buying Bitcoin Through Credit Card:
Using a credit Card for acquiring Bitcoin is a very useful offer to prevent slippage. Although many people still remain sceptical towards this method of investment, the number of organisations that offer Credit Card Purchasing options have exponentially risen with the popularity of Bitcoin. As of January 2018, there have been a number of organizations that have either embraced processing digital currency transactions, or treat them as cash advances. On the other hand, there have also been a number of Merchant Services and payment processors that have outlawed using credit cards for cryptocurrency purchases altogether. Nevertheless, below are three of the best options for an individual to buy Bitcoin using a credit Card.
- io: CEX Exchange is a London based Cryptocurrency Exchange, which started out originally as a Bitcoin Cloud mining provider. Unlike a normal crypto-exchange, CEX offers digital currency exchanging services, where traders can exchange Bitcoin and certain other cryptocurrencies with Fiat options. They provide purchasing options using USD, EUR, GBP and RUB.
CEX is registered Within the FinCEN (USA) as a Money Services Business and also possesses a PCI DSS Level 2 certificate. At the time of writing, CEX has a daily trading volume of $8,953,076 USD with 24 active trading pairs on offer. They accept both Visa and MasterCard options, with plans to expand in the near future.
- BitStamp: BitStamp is Luxembourg based Bitcoin Exchange which allows Bitcoin purchases through credit cards. Currencies allowed for deposits and withdrawals include USD, EUR as well as altcoins like Litecoin, Ethereum, Ripple and Bitcoin Cash.
Bitstamp allow both Visa and MasterCard Credit cards to be used on its platform. At the time of writing, the daily trading volume of Bitstamp is $120,672,930 USD, with 14 active trading pairs on offer. It also offers other types of trading methods, such as instant order, limit order, Stop order and Market order.
- CoinMama: Coinmama is a relatively old cryptocurrency exchange, which puts a special emphasis on user-friendliness. It is one of the few platforms that offer multiple ways of trading and buying cryptocurrencies such as Ethereum and Bitcoin. Founded in 2013, the exchange is based out of Israel and operates in many countries of the EU as well as the US. Coinmama’s service accepts Visa and MasterCard Credit and Debit Cards for cryptocurrency acquisition. Coinmama is known for instantaneous verifications and charges a small premium for each transaction.
Buying Bitcoin Through Debit Card
Similar to credit card buying services, many exchanges and enterprises have started offering Bitcoin purchases through debit cards as well, citing the recent surge in cryptocurrency transactions involving credit cards. Many of these sites offer both Debit and Credit card options to their users. However, a notable exception is Coinbase, which has unfortunately stopped offering Credit Card purchasing options. Below are just a few of the exchanges that allow Debit Card Purchasing of bitcoin.
- Coinbase: Probably the most well-known exchange in this list, Coinbase is a San Francisco based cryptocurrency brokerage and exchange firm, founded in 2012. They offer cryptocurrency trading for Bitcoin, Bitcoin Cash, Ethereum, Litecoin and a string of other cryptocurrencies. Coinbase was originally one of the first enterprises to offer Bitcoin purchases through credit cards. However, from February 2018, Coinbase discontinued this service, citing regulatory concerns. It still however, allows purchases with Debit Cards on its platform. There are no additional charges for using a debit card on the exchange, as is the case with many other exchanges.
- Coinhouse: Coinhouse is a France based cryptocurrency exchange, operating out of Paris. It offers Bitcoin purchases via Debit or credit cards, as well as with NeoSurf prepaid cards. Coinhouse takes great care in making sure both credit and debit card transactions are secured on their platform. As a Bitcoin broker operated by Ledger, a well-known security company, Coinbase has 3D secure credit and debit card options. It is a very smooth and fast platform, with almost instant verifications. However, the fees for Debit card purchases are a bit on the high side, 6-10% depending on the transaction.
- 24/7 Exchange: A relatively new entrant into the market, 24/7 exchange has already managed to attract quite a substantial number of traders from the trading community. A lot of it has to do with the fact that it offers both credit card and debit card purchasing options with a substantially low exchange rate. The platform offers complete transparency in regards to processing fees and other related costs, a trait not seen in the majority of crypto exchanges.
Buying Bitcoin through PayPal:
Since the rise of cyber crimes involving credit card and debit card purchases, many people now believe that PayPal is probably the safest option for buying cryptocurrencies directly. Many exchanges have thus started offering PayPal crypto purchases besides the regular debit/credit cards. Other payment processors like Skrill are also used on multiple platforms. Below is a brief list of Exchanges/brokerage firms which allow PayPal purchases on their platform.
- Virwox: Virwox is one such exchange which offers users the opportunity to use PayPal and Skrill, another payment processor to buy Bitcoin. Users have to first deposit money into their account using their PayPal account. The exchange does not allow users to purchase Bitcoin directly and requires users to Buy their native token, SLL on the exchange. After exchanging, users can easily trade SSl tokens with Bitcoin on the exchange and withdraw afterwards.
- eToro: eToro allows traders to acquire Bitcoin by PayPal directly on the platform. The only catch is that it does not have a withdrawal option for Bitcoin nor does it allow direct trading with other traders using Bitcoin. They can only sell them for fiat money in either Dollars or Euros. The platform is thus ideal for crypto-traders looking to make substantial profits from Bitcoin’s unpredictable price swings.
- Localbitcoins: Localbitcoins is more of a virtual marketplace than an exchange, creating a comprehensive market like environment where Bitcoin buyers and sellers can meet. Many people prefer Localbitcoins because of the credibility it offers. Users can use PayPal to buy Bitcoin from other sellers with an added premium. Users can also choose their own sellers, with the platform providing a corresponding feedback rating for added assistance.
The Cryptocurrency market has matured in a way that sees an influx of crypto-enthusiasts enter the market in the last 2 years. Big enterprises, brokerage firms and even some cryptocurrency exchange have thus recognized the need for offering multiple purchasing options for crypto traders and investors. As more and more companies hope on the crypto-bandwagon, the number of exchanges offering alternative purchasing options is expected to rise in the coming year.` However, it is always advised to conduct substantial market research before making any final decision, due to the increase in frauds and Ponzi schemes involving cryptocurrencies in recent times.