How to buy Bitcoin in the United States?

Approximately 25% of global Bitcoin trading takes place in the United States. This figure gives us an idea of the importance and size of Bitcoin in the US and other cryptocurrencies as well.

One of the problems when buying Bitcoin in the US is the lack of federal regulation of cryptocurrency trading. Each state has its own rules regarding the treatment of cryptocurrencies and digital assets. Buying Bitcoin is fully legal across the country, but there are differences between states.

While there is no federal legislation for cryptoassets in the U.S., agencies at the federal level have offered guidance to states. Following the 2014 boom, these federal agencies had to make decisions on their cryptocurrency classifications.

The SEC designated cryptocurrencies as digital currency, the CFTC classified them as commodities, and the IRS defined them as property. So, while it is completely legal to buy, sell and trade cryptocurrencies, they are not legal tender.

What is Bitcoin?

First of all, for those who don't know yet, let's explain what Bitcoin is.

It is the first cryptocurrency in the world, born in 2009, and it is the most important in terms of capitalization and influence. Its price has grown at a great speed, and that is the reason why it has caught the attention of investors.

Three years ago it was already trading very high and reached $6,300 in March 2020, and today, after a significant drop, it is trading at $30,500 in May 2022, although it exceeded $60,000 in 2021.

The important thing about Bitcoin is not only its value as a cryptocurrency, it is that it introduced a new technology called "blockchain", which revolutionizes the system allowing to offer decentralized finance and contracts.

A major difference with other forms of transferring value is that BTC exchanges are anonymous and it is impossible to trace the people behind the transactions. It follows that it is a payment method free of government regulations.

If you do not know Bitcoin, we recommend you to study what cryptocurrencies are and how they work before investing.

Steps to buy Bitcoin in the United States

It is relatively easy to buy cryptocurrencies in the U.S. The first step is to choose a hardware or software wallet, and the second is to choose a cryptocurrency exchange to buy from.

The most difficult step is to verify your identity through a Know Your Customer (KYC) process. This involves providing your full name, date of birth and residential address to the exchange.

Identity must then be verified by providing them with a copy of a passport or government-issued ID. Some exchanges offer a video call option.

There are many exchanges to buy cryptocurrencies, here is a list of the top 10 exchanges to buy Bitcoin in the United States.

Here are the five basic steps to buy cryptocurrencies in the US:

1. Choose an exchange

The first step in obtaining cryptocurrencies is deciding where you will buy them. For most people, the most convenient (and cost-effective) way to buy Bitcoin is through an exchange.

2. Verify identity

Most cryptocurrency exchanges will have some form of verification (this is known in the industry as Know Your Customer or KYC). They will likely require some combination of bank account information, driver's license or passport, proof of residency, and current photograph.

Don't be deterred by this process, as exchanges are required by law to collect this information.

3. Buying Bitcoins

Once you have deposited funds into your exchange account, you should be able to immediately purchase Bitcoin or any other cryptocurrency at the current exchange rate. Buying cryptocurrencies on an exchange is generally a very easy process.

We will put in the amount of money we want to invest and make the payment, either by credit card or other methods supported by the exchange.

4. Storing Bitcoins

There are different methods of storing cryptocurrencies. When a person buys his first Bitcoin, and has little money invested, he usually leaves those Bitcoin in the wallets of the Exchange where he bought those Bitcoin, all exchanges allow to store cryptocurrencies.

Many people prefer to remove their cryptocurrencies from exchanges to hardware wallets for more security. It is a personal decision, but to start with we can use the wallets provided by the exchanges because it will be easier to start investing in cryptocurrencies.

5. Manage Bitcoins

You have finally acquired Bitcoins! What you do from here on is up to you. You can simply let them sit and, hopefully, let them gain value, you can exchange them for other cryptocurrencies, you can staking them for interest, you can even trade them.

Other ways to buy Bitcoin in the United States

Although exchanges are perhaps the preferred way to buy Bitcoins and other cryptocurrencies, they are not the only way to access this market. There are other methods you can use for your Bitcoin purchases.

Bitcoin ATMs

These act as a sort of Exchange, but in a physical and face-to-face manner. Users can insert their money into the machine and use it to buy Bitcoins, which will be transferred to the digital wallet.

Bitcoin ATMs have become very popular over the last few years. If you don't know the ones near you, Coin ATM Radar could help you discover them.

P2P Exchange

Unlike decentralized exchanges, there are several P2P Exchange services that provide a more direct connection between users. Local Bitcoins could be, in this case, the perfect example.

After creating their account, users can publish that they buy or sell Bitcoins, including payment information and price. The consumers themselves will then search the list for who is buying or selling, choosing the user with whom they wish to transact.

Are there any states where Bitcoin cannot be purchased?

There are no states where Bitcoin is not available for purchase. However, because regulations are made at the state rather than federal level, there are some states where you may want to avoid doing business with cryptocurrencies. There are 4 states where regulation is less favorable.

• New York has implemented a policy where any company working with cryptocurrencies must apply for a BitLicense, which has a $5,000 application fee and has 44 pages of compliance requirements. Since implementation, most crypto companies have moved out of New York State.
• Rhode Island assesses sales tax on all cryptocurrency transactions and development, which means that, as a business, you must pay tax for accepting cryptocurrencies, but also for developing or researching cryptocurrencies. Like New York, most companies have jumped ship.
• Arizona has adopted the same policy as Rhode Island, taxing companies that only develop software and imposing sales taxes on any transactions made with cryptocurrencies.
• Hawaii has no law against cryptocurrencies, but requires all exchanges to have their entire cryptocurrency balance backed by traditional currency. Therefore, most major U.S.-based cryptocurrency exchanges have opted not to offer the service to residents of the Aloha State.

Español: ¿Cómo comprar Bitcoin en Estados Unidos?