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5 Places You Can Buy Cryptocurrency to Play the Volatile Bitcoin Market

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Bitcoin (BTC) is all the rage these days. Once considered off-limits and dangerous, it became the hottest asset class in 2020, and it seems the momentum will not stop anytime soon. On Jan. 8, the cryptocurrency’s sizzling rally helped bitcoin prices near a remarkable $42,000 on CoinDesk. Many who had scoffed at the digital asset are now forced to eat humble pie. More importantly, rookie investors say they’re buying the cryptocurrency due to FOMO, also known as “Fear of Missing Out.”

Bitcoin’s price surge in 2020 is one of the bizarre idiosyncrasies of an unbelievable year. JPMorgan Chase strategists John Normand and Federico Manicardi recently wrote, “Bitcoin has already achieved the fastest-ever price appreciation of any must-have asset.”

However, no matter what the analysts say, crypto prices have stoked a speculative mania among the Robinhood crowd, throwing fundamental and technical analysis to the wayside. Investors are finally getting comfortable allocating at least a small portion of their extra cash towards the digital asset.

That’s why we have compiled this list of five places an investor can go to purchase cryptocurrency. However, before we proceed further, a word of caution: JPMorgan Chase & Co. cross-asset strategists have said that the digital currency is lousy at compensating short-term drawdowns in big sell-offs. Last year, large U.S. financial institutions started including it in their operations. However, the volatility is still there.

Bitcoin recently closed in on the lowest in three weeks, sliding below $32,000. Notwithstanding, prices remain more than double the levels from early November, and some technical analysts argue that a pullback is long overdue.

So, happy trading on the next five platforms. However, keep in mind that this is a volatile asset.

  • Coinbase
  • eToro
  • Robinhood
  • Paypal (NASDAQ:PYPL)
  • Bisq

Cryptocurrency Site: Coinbase

A stack of bitcoin tokens ahead of the Coinbase logo.

Source: Useacoin / Shutterstock.com

A cryptocurrency exchange headquartered in San Francisco, Coinbase is an excellent place to start for a newbie investor.

Coinbase provides market information and descriptions for 50 cryptocurrencies for over 35 million users in over 100 countries. Security is a major concern for several users. However, Coinbase has you covered there. Through Coinbase Vault, you can receive cryptocurrency like a normal wallet and limit stored crypto from being directly withdrawn by adding optional security steps. There’s also two-factor authentication and offline storage for digital assets.

When you conduct a transaction, Coinbase will tell you the transaction fees upfront. You will typically be charged a flat per-transaction fee and a spread of approximately 0.50%. However, it’s important to note here that transaction fees will vary depending on the source of funds for the purchase. For instance, it can rise to 3.99% when you use a debit card to buy. If you upgrade to Coinbase Pro, the company will charge you based on a different pricing model.

If you want to start your cryptocurrency journey, there is no better option than this one.

eToro

a digital representation of a bitcoin surrounded by several other altcoins forming a circular shape

Source: Shutterstock

An Israeli social trading and multi-asset brokerage company, eToro’s disruptive trading platform allows you to trade and invest in cryptocurrencies, stocks, ETFs, currencies, indices, and commodities or copy leading investors.

The company provides an easy-to-use platform and free practice account with $100,000 in virtual money that lets you test out buying bitcoin without risking real funds. Once you are comfortable, you can perform transactions for a 0.75% spread price for bitcoin and higher fees for other currencies.

Additionally, the company offers the CopyTrader system for all those traders, enabling individuals to automatically copy positions opened and managed by other selected individuals.

Robinhood

Robinhood app against white paper background with scattered office supplies.

Source: Sulastri Sulastri / Shutterstock.com

Robinhood offers a mobile app and website that gives users the ability to invest in stocks, ETFs, and options through Robinhood Financial and crypto trading through Robinhood Crypto. The best thing about the application is that you don’t have to bear any transaction fees when making a purchase.

This may sound familiar for many retail traders, considering its stock market investing platform also doesn’t involve transaction fees. However, the Robinhood app and Robinhood Crypto platform are separate. You can use it alongside your Robinhood stock investment account if you have already registered for the other one.

Although the platform does not support a large selection of cryptocurrencies, Robinhood app traders will likely find using this program easier than some of the other constituents on this list.

PayPal

In the intro, we spoke about how cryptocurrencies are gaining more institutional support. In 2015, eBay (NASDAQ:EBAY) spun off Paypal to eBay’s shareholders. The resulting financial services company provides electronic payment solutions to merchants and consumers, focusing on online transactions.

PayPal had 300 million active accounts at the end of 2019, including 20 million merchant accounts. It owns Xoom, an international money transfer business, and Venmo, a person-to-person payment platform.

PayPal allows its users to buy, sell, and hold four prominent cryptocurrencies – Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. The platform allows you to buy cryptocurrencies like bitcoin for as little as $1. However, you have to pay a minimum fee of 50 cents for transactions below $25.

Additionally, for transactions below $100 you will have to pay 2% for transactions between $100 and $200, 1.8% for transactions between $200 and $1,000 and 1.5% for transactions of more than $1,000.

Bisq

chart of cryptocurrency

Source: Shutterstock

We polish off our list with Bisq, an open-source desktop application that allows you to buy and sell bitcoins in exchange for national currencies or alternative cryptocurrencies.

For investors wanting some privacy, its decentralized peer-to-peer network is just what you are looking for. Furthermore, you don’t need to register with the platform to perform a transaction.

Trade fees range from 0.05% to 0.70%, depending on the payment method and other factors. Much like eBay, Bisq requires the traders to enter transactions themselves, unlike other platforms where this is automated for the traders. One negative aspect is the need for collateral when performing a transaction. Both parties are required to lock up their crypto to secure the trade.

On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

The post 5 Places You Can Buy Cryptocurrency to Play the Volatile Bitcoin Market appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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