There are multiple ways to buy bitcoin, but perhaps the easiest and safest way is through an exchange like Coinbase. This article will show you how to buy bitcoin on this popular exchange.
Launched in 2012, Coinbase is a popular site for crypto investors, primarily because it is easy to use. Coinbase reports over 110 million verified users – that’s more than Charles Schwab, with 33.6 million active brokerage accounts.
Here is what you need before you get started:
- A valid email address
- A valid photo ID (such as a driver’s license)
- A bank account or credit card
Coinbase has no minimum account size. That means you can buy bitcoin at Coinbase and then ship it to your private wallet, leaving a zero account balance at Coinbase if you like. Perhaps the safest way to hold bitcoin is in your own private wallet, in case the exchange gets hacked.
You will need valid identification, such as a driver’s license or photo ID. You will upload your ID directly on the Coinbase website. For security purposes, Coinbase does not allow you to send your ID by email.
You also need a bank account or credit card to make purchases. During due diligence, Coinbase will send a few pennies to your bank account; then you must verify the amount to Coinbase. All this is for verification and authentication purposes. Like any bank or money transmitter, Coinbase must comply with Know Your Customer/Anti-Money Laundering laws.
Open Your Coinbase Account
Once you are ready to sign up for an account, go to the account signup page, where you will see this:
Simply fill in the required fields to open your account. You will be prompted to upload your ID and verify your bank account or credit card as you go. Simply follow the prompts as they appear to complete account set up.
Once you have opened an account at Coinbase, you will see a dashboard with the price of bitcoin, Ethereum, Solana and other coins listed, along with your current balance of each coin and the market’s top movers.
To buy bitcoin, scroll up to the top of the main Coinbase page and click on Buy/Sell. A screen will pop up that looks like this:
You can specify a dollar amount of bitcoin you want and by clicking the “Preview Buy” button you can see the amount of BTC you would receive for that amount. In this case, the purchase is for $100 worth of bitcoin or 0.00428171 BTC.
You will see the order to buy 0.01411305 BTC for $100, with a $2.99 Coinbase fee, which is 2.99 percent of the purchase price. The price of bitcoin was $22,656.84 at the time of the sale.
Hit “Buy now” Then you will see the confirmation of your purchase. Note that the amount of bitcoin purchased could be slightly different than on the preview screen as Coinbase is constantly updating the purchase based on the market price. In this case the preview showed 0.01411305 BTC for $100, however we ended up getting 0.01428165 BTC for $100 because the price of bitcoin dropped slightly in the 30 seconds or so it took to complete the transaction. This worked in our favor this time, but that might not always be the case.
You can always see the purchase by clicking on Bitcoin from your Home screen and then switching to the “Primary balance” tab. It will show all the purchases made from your Coinbase account, how much BTC you received, and how much fiat you paid. Unfortunately it doesn’t show the fees paid, which would be a nice addition.
Setting Up Recurring Buys
One approach to buying an investment with a fluctuating price like bitcoin is dollar cost averaging. Dollar cost averaging is buying a fixed amount every month to average in your cost basis. Dollar cost averaging works well for investors who are buying stocks or cryptocurrencies on a fixed monthly budget.
Coinbase allows you to set up this kind of recurring transaction straight from your dashboard if you wish. Simply click the dropdown in the middle of the Buy/Sell page (it defaults to “one time purchase” but there are several options to choose from) and choose the frequency of your recurring purchase.
Coinbase is a good way to get started with buying bitcoin and altcoins because of its ease of use. It also offers sales of Ethereum, Litecoin, and Cardano, as well as Polygon, Solana, and Polkadot. Overall, there are currently 172 assets available for trading, and 212 assets you could hold in the Coinbase wallet.
Yet Coinbase has limitations. Its fees are quite a bit higher than other exchanges. Also, Coinbase does not offer Ripple XRP or several other popular currencies like Tron and Dash. A review of other crypto trading sites can be found here.
The market is huge, with about 9,000 altcoins currently. To keep on top of this fast-changing market, subscribe to the Bitcoin Market Journal newsletter today!