There are many ways to buy cryptocurrency like Ether, Bitcoin, and others–you can use an app, you can create an account with a brokerage, or you can use a cryptocurrency exchange to purchase digital funds. Brokers and exchanges may seem to serve similar functions, but one area brokerages have earned a reputation for is the ability to handle larger transactions.
Some of these entities are more helpful for new investors than others–it may be necessary to strike a balance between strong features for the new investor and the availability of educational articles and videos that can help you get up to speed quickly.
A newcomer may or may not feel compelled to choose between a broker or an exchange–for our purposes here we’ll treat the two the same, but it’s best to choose a service provider based on the services you want plus the cost of transaction fees or gas fees associated with using that service. You should aggressively shop around for the best pricing as it can vary greatly.
Crypto Beginners Take Note
If you are a newcomer to crypto, using a trusted exchange like Coinbase (see below) may be a better way to proceed at first if for no other reason than the use of exchanges is likely the best-documented way to begin for the new crypto investor.
As always, what follows is not financial advice. It is a look at the pros and cons of digital exchanges and not an encouragement to invest.
Crypto investing carries an elevated degree of risk because there is no inherent value in the currency but rather value conferred upon it by investor enthusiasm and continued support of a given currency. Invest at your own risk and make the most informed choices you can before committing a large amount of investment funds toward any high-risk investment including Bitcoin, etc.
Buying Crypto Using An Exchange
Some investors are particular about which exchanges they support and some may prefer to use exchanges and brokers based in the United States as opposed to those such as Bitpanda which are headquartered in Europe (Bitpanda is a broker, not an exchange).
The laws of the country where the exchange is based may affect some trading options, perks, pricing, and availability. Always ask before you invest. If you are investing with a company that has an office in the USA.
Some exchanges have offices in multiple countries so some of the sites below are technically USA-based but not exclusively so.
Exchanges To Buy Crypto In The USA
Here is a list of brokers and exchanges that have offices in the United States. Some are not exclusively headquartered here and may have offices in Europe, Asia, and elsewhere.
BlockFi is described as a “non-bank lender” that specializes in helping borrowers trade and earn using cryptocurrency. This company is based in New Jersey and offers investors account options that include no minimum size plus commission-free trading. You may also apply to open an interest-bearing crypto account.
The services offered by BlockFi are not available in all 50 states, and state law or changes to federal law may affect your ability to use certain services depending on circumstances. At press time, BlockFi account options are not offered in New York State.
With offices in Israel, Australia, and the USA just to name a few, this brokerage is not exclusively focused on crypto, and for some that is a benefit.
Founded in 2006, eToro boasts professionally managed investment portfolios for cryptocurrency, support for 27 different types of crypto, and offers newcomers a “$100,000 virtual portfolio to practice your strategy” at the time of this writing.
One of the key perks to eToro? The ability to start trading quickly and the availability of high limits, though newcomers should beware of taking advantage of that option too quickly.
Coinbase and Coinbase Pro
Coinbase is a United States-based exchange that started in 2012, with offices in New York, Chicago, San Francisco, Dublin, London, and Tokyo. Coinbase describes itself as a company that builds digital platforms for open and accessible finance systems.
Coinbase has one of the highest reputations of any firm dealing with crypto and the site is good for beginners thanks to a tutorial section and the option to start with Coinbase (the entry-level version) before upgrading later to Coinbase Pro which has more advanced features and is better for more experienced users.
You may be able to link a regular bank account and begin buying quickly using the Coinbank secure site.
This New York-based exchange is another that leads with Bitcoin, but offers support to more than 40 other coins. Gemini has offices in the USA, Canada, the UK, Japan, and many other countries.
The official site offers an enticing perk for new investors–you can get started for as little as five dollars (USD). This site has a unique offering–the Gemini credit card which offers rewards in crypto. It also offers to secure individual user accounts with hardware keys.
Some reviews of this exchange hold that Gemini is not available in all U.S. states, but at press time the official site notes that you can indeed create an account in all 50 states. Some reviewers give Gemini low marks for a steeper learning curve than some other exchanges.
Robinhood offers a range of services aside from helping people buy Bitcoin; this Menlo Park, California-based company offers fee-free trading, help for beginner investors who want to purchase crypto, and other perks. But Robinhood also has a reputation for being a bit restrictive–you cannot send cryptocurrency to third parties or accept coins from third parties.
You can use your virtual currency purchases to buy and sell them for U.S. dollars only at press time. That’s a limitation that might put off some potential users, especially if you are a newcomer who wants to learn the ropes of investing in Bitcoin and how transactions typically work.
Swan Bitcoin is, as you might have guessed, a Bitcoin-centric exchange that offers to, as the official site says, help Bitcoin investors “save value” and purchase Bitcoin quickly and affordably.
The site has a reputation for requesting a great deal of personal information for account creation but it also has an option for recurring Bitcoin purchases that allow you to automatically buy more crypto on a regular basis (using ACH or wire transfer) without having to manually enter the transaction.
Whether that is an asset or a liability for a new crypto investor remains to be seen, but it’s important to read ALL the fine print associated with such setups to avoid hidden fees, “gotcha” pricing, and other issues. Swan Bitcoin allows you to withdraw your virtual currency, set up an auto-withdrawal schedule for doing so, etc.
Webull is a company that has a United States headquarters (in New York) but is owned by a company based in China. Webull is essentially a brokerage that supports cryptocurrency investing and features competitive fees and mobile-based investing options.
The pricing may be good for newcomers, but if you are looking for a newbie-friendly platform Webull may not be the right choice. Webull does not pay interest on money that is not invested on the platform but does offer the ability to diversify investments. It’s a very good idea to compare the features and pricing here with Coinbase and others in our list above.
Joe Wallace has covered real estate and financial topics, including crypto and NFTs since 1995. His work has appeared on Veteran.com, The Pentagon Channel, ABC and many print and online publications. Joe is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News.