How best to buy bitcoin in 2022

buy bitcoin

Crypto-enthusiasts like to call bitcoins “digital gold.” There is no denying the fact that there are similarities between gold and bitcoins.

Where to buy bitcoin?

Buying bitcoins (BTC) is now considered a lucrative investment. Double-digit price increases are not uncommon and encourage people to buy the popular cryptocurrency. The price of bitcoin has gone through a course (rally) over the last two years, rising from nearly $17,000 in November 2020 to more than $68,000 per BTC—a fourfold increase in price in one year.

Forecasts, such as the stock-to-flow model, which figures out price predictions based on how few bitcoins there are, say that prices will go up even more, to $120,000 or more. In the long term, some experts believe it should even cross the $1 million mark. Whether this will actually be the case, of course, no one can yet say. However, one thing is certain: Bitcoin is not going anywhere. No wonder more and more people want to invest in cryptocurrency and buy Bitcoins.

But investors are quickly confronted with a lot of vendors and information. Our guide will tell you what you need to buy bitcoins, which providers are reputable, and whether you should invest in bitcoins. This also applies if you already own cryptocurrency and now want to sell it. In short, we will tell you everything you need to know.

Buy and sell bitcoin

If you want to buy bitcoins, you will first need to choose one of the online marketplaces and create an account there. All reputable providers require new clients to go through a verification process.

This means that you have to verify your existing bank account and have your ID card or passport ready to prove your identity through a video or post-identification process. This is the only way that online marketplace vendors can be sure that it is you who is buying the bitcoins.

buy bitcoin

This is mostly because of the law. All financial service providers who offer cryptocurrency trading must follow rules about money laundering. This also includes complying with “know your customer” (KYC) requirements. This means that anyone who makes it possible to buy and sell bitcoins must be familiar with their clients!

Once verified, you can get started. You transfer the money you want to invest by credit card, bank transfer, or PayPal to the appropriate provider. Most online trading platforms keep the money in a clearing account. This, in turn, is held by a bank, which works together with the respective provider. With reputable providers, up to 100,000 euros of the money held is protected by law.

Do I have to buy a whole bitcoin?

No, you do not have to buy or sell the whole bitcoin. Bitcoin, like all currencies in the world, is divided. Bitcoin has up to eight decimal places. The smallest unit of bitcoin is “satoshi,”  named after the anonymous inventor of the cryptocurrency, Satoshi Nakamoto. So if you can’t afford or don’t want to afford a whole bitcoin, you can buy just 0.00001337 BTC, for example.

How can I buy and sell bitcoins (BTC)?

There are many reputable online trading venues where you can buy and sell bitcoins in Germany using PayPal, a credit card, Sofortüberweisung, or SEPA. At the moment, only traditional providers like Sparkasse & Co. are having trouble selling bitcoins to their customers.

There are basically three ways to invest in bitcoin and other cryptocurrencies: brokers, stock exchanges, or through derivatives.

However, the deciding factor in choosing the most suitable trading platform for you is whether you want to invest directly in bitcoin or in a bitcoin-based financial product such as bitcoin CFDs, ETNs, ETPs, or certificates.

The fastest, easiest, and safest way to invest in cryptocurrency is through a broker.

Bitcoin brokers for beginners

With a cryptocurrency broker, you buy bitcoins directly from the provider. Most brokers are very intuitive to set up; no additional prior knowledge is required to start investing right away. Recommendation: BISON app

Bitcoin exchanges for traders

On cryptocurrency exchanges, buying and selling takes place directly between traders. Bitcoin and company trading are organised through an order book. This order book contains all current offers to buy and sell. By combining these offers, the current bitcoin price is determined.

Recommendation: Boerse Stuttgart DX

Bitcoin CFDs for professionals

If you want to invest in bitcoin directly and quickly without wanting to own the cryptocurrency yourself, you can also use CFD brokers. These “Contracts for Difference” (CFDs) replicate the price of bitcoins. This way, investors can benefit from the Bitcoin exchange rate through CFDs without having to participate in it directly. If you want, you can also use this type of bitcoin trading and thus increase your profit opportunities.

Disadvantage: the risk of losing increases sharply. If you decide to liquidate your positions, your money will be paid out immediately.

Bitcoin Certificates

Bitcoin Certificates, which are not a direct investment in Bitcoin but are designed to make it easier to buy Bitcoin, are also a way to buy Bitcoin. Cryptocurrency certificates allow investors to benefit from the underlying asset—in this case, bitcoin.

Can I buy bitcoin using PayPal?

Yes, you can buy bitcoins with PayPal. PayPal itself has not yet activated bitcoin purchases in the German app. However, on some exchanges and brokers, you can choose PayPal as a means of payment for your BTC investment. With the popular app, you can not only conveniently order a pizza but also buy bitcoins.

buy bitcoin

The advantages of using PayPal when buying bitcoins are obvious:

  • Simplicity: using PayPal as your payment method, you don’t need to trust any additional payment details, such as your credit card number, to the trading platform you choose, but you can rely on PayPal as usual.
  • Speed: The cryptocurrency market moves very quickly, and a favourable opportunity can only open up a small window for trading. With PayPal, you can make a transfer very quickly and gain a time advantage over a classic transfer.

Buy Bitcoin by credit card

Buying bitcoin digital currency with a credit card is also a very popular payment method that is widely used by exchanges and brokers.

This payment method also has its advantages:

  • Accessibility: Almost everyone has a credit card, and it is usually always on hand. This is especially important in order to be able to react quickly to price fluctuations. The “credit card” payment method is also much more common than, for example, paying by PayPal.
  • Speed: Deposits on exchanges and brokers are usually made almost in real time when depositing by credit card.

Buy bitcoin from a vending machine

In some European countries, cryptocurrency can be bought at what is known as a bitcoin vending machine (ATM). The purchase is usually made in cash, but it can also be made with a credit or debit card.

Buy bitcoins without registration

Buying bitcoins without registering somewhere or checking yourself is hardly possible anymore. Contrary to what is often claimed, it is not always possible to buy cryptocurrency from a machine without registering. The KYC (know your customer) obligation depends heavily on the jurisdiction in which the ATM is located. In most cases, the obligation to register also depends on the amount of the purchase.

Buy bitcoin anonymously

Similarly, buying or selling bitcoins anonymously is hardly possible in any serious way. Buying BTC from a vending machine is also not necessarily anonymous. Only in a few cases is it really possible to buy Bitcoin without providing personal information. A purchase that is actually or rather largely anonymous is mostly only possible in a peer-to-peer network, that is, in person or in an over-the-counter transaction at an exchange office.

Petros Lorelis
Author and expert: Richard Urban
LinkedIn: Richard Urban