Guide on how to buy Bitcoin BTC with CFD Broker

Today, cryptocurrencies such as Bitcoin, Ethereum, Ripple and many others became mainstream and hugely popular among individual investors and traders. Cryptocurrencies are part of the forex market, the largest in the world with $6 trillion in daily trading volume. The volatility of Bitcoin still presents a huge opportunity to profit from its wild price swings and attract millions of investors. As cryptocurrency trading becomes more popular, individual investors now have a number of options of how to buy Bitcoin and invest in this digital asset. But for newbie investors, it might not be easy to navigate this space with so many options available. We have seen the good, bad and ugly of cryptocurrency trading. Some platforms offer highly reliable service and institutional level trading capability. Some other platforms just try to get by and don’t advance while some others are simply scammed trying to rip off people. 

While investing in Bitcoin can seem difficult at first, it becomes much simpler once you break it down into stages. Buying Bitcoin is becoming easier by the day, and the trustworthiness of exchanges and wallets is increasing.

Our team at EthereumTrading.pro is on the mission to educate ordinary investors about opportunities presented by the cryptocurrency market. We reviewed different trading platforms and prepared a number of guides on how to invest in Bitcoin, Ethereum, Ripple and other cryptocurrencies. 

TopTop 3 Crypto Trading Robots to Buy Bitcoin

Key Takeaways

  • Bitcoin’s value stems from its widespread use as a store of value and payment mechanism, as well as its limited supply and low inflation.
  • Although it is almost impossible to hack Bitcoin itself, it is possible for your crypto wallet or exchange account to be hacked. This is why proper storage and security procedures are important.
  • The only requirement for investing or trading Bitcoin is an account on a cryptocurrency exchange, though additional secure storage practises are suggested.

Top 3 Crypto CFD Brokers to Buy Bitcoin

Before You Get Started

Any aspiring Bitcoin investor requires a number of items. If you’re using a Know Your Customer (KYC) network, you’ll need a cryptocurrency exchange account, personal identity papers, a secure Internet connection, and a payment system. It’s also a good idea to have your own personal wallet separate from your exchange account. Bank accounts, debit cards, and credit cards are all acceptable payment methods on this route. Bitcoin can also be obtained via specialised ATMs and peer-to-peer (P2P) exchanges. Be conscious, however, that as of early 2020, Bitcoin ATMs were increasingly needing government-issued IDs.

For Bitcoin investors, privacy and protection are critical concerns. Even if there are no actual Bitcoins, boasting of big holdings is typically a bad idea. Anyone who obtains the private key to a Bitcoin public address has the ability to approve transactions. Although it is self-evident that the private key should be kept private, criminals will try to steal private keys if they discover large holdings. Keep in mind that the balance of a public address system can be used by everyone. As a result, it’s a smart idea to hold large Bitcoin holdings at public addresses that aren’t linked to the ones used for transactions.

Anyone, including you, has access to the blockchain’s transaction history. However, although transactions are publicly registered on the blockchain, personal information about users is not. Only a user’s public key appears next to a transaction on the Bitcoin blockchain, rendering transactions private yet not anonymous. Bitcoin transactions are more straightforward and traceable than cash in some ways, but they can also be used anonymously.

This is a crucial difference. International researchers and the FBI claim to be able to monitor Bitcoin blockchain transactions to users’ other online accounts, like digital wallets. When anyone opens a Coinbase account, for example, they must have identification. When that person buys Bitcoin, it is now associated with their name. It can also be traced back to the Coinbase purchase, which was linked to the account holder’s name if they send it to another wallet. Many investors should be unconcerned about this since Bitcoin is legal in the United States and most other developed countries.

STEP 1 –  Select an Exchange, Broker or Automated Trading Platform

You can purchase, sell, and keep cryptocurrency by signing up for a cryptocurrency exchange. It is generally recommended that users use an exchange that allows them to withdraw their cryptocurrency to a personal wallet for safekeeping. This is not permitted on certain exchanges and brokerage sites. This function might not be relevant to those who trade Bitcoin or other cryptocurrencies on a regular basis.

Cryptocurrency exchanges come in a variety of forms and setups. Due to the decentralisation and individual autonomy ethos of Bitcoin, some exchanges enable users to remain anonymous and do not require them to enter personal details. Exchanges that enable this usually function independently and are decentralised, meaning there is no single point of control. To put it another way, there is no CEO and no individual or group for any regulatory body to investigate if it suspects criminal activity.

Although these programmes have the ability to be used for malicious purposes, they also offer services to the unbanked. People like this may include refugees or those living in countries where there is little or no government or banking infrastructure to provide a state identification needed for a bank or investment account. Some argue that the benefits of these programmes outweigh the risk of illicit usage since unbanked people already have a way to save money and use it to get out of poverty.

The most widely used types of exchanges are currently not decentralised and need KYC. Coinbase, Kraken, Gemini, and Binance U.S., to name a few, are among these exchanges in the United States. The number of features available on each of these exchanges has increased significantly. Bitcoin and an increasing number of altcoins are available through Coinbase, Kraken, and Gemini. These three are possibly the simplest ways to get started with cryptocurrency in the entire industry. Binance caters to the more experienced trader, with more severe trading functionality and a large selection of altcoins.

While opening a cryptocurrency exchange account, it’s crucial to follow secure internet practises. This involves using two-factor authentication and creating a password that is both unique and long, with a mix of lowercase, capitalised, special, and numeric characters. 

 STEP 2 – Open Account and Deposit Funds

Once you’ve decided on an exchange, broker or automated trading platform, you’ll need to collect your personal records. These could include images of a driver’s licence, your social security number, as well as information about your employer and source of funds, depending on the exchange. The information you’ll need is likely to be determined by the area you reside in and the laws that govern it. The procedure is similar to that of opening a traditional brokerage account.

You can now connect a payment option after the exchange has verified your identity and legitimacy. You can associate your bank account or a debit or credit card directly with the exchanges mentioned above. Although it is possible to buy cryptocurrency with a credit card, it is generally recommended to avoid doing so due to the uncertainty that cryptocurrencies can encounter.

Although Bitcoin is legal in the United States, some banks are wary of the concept and may challenge or even refuse to make deposits to cryptocurrency-related websites or exchanges. While most banks accept these deposits, it’s a good idea to double-check that your bank accepts deposits at the exchange you choose to use.

Deposits made with a checking account, debit card, or credit card have different fees. Coinbase, for example, has a 1.49% fee for bank accounts and a 3.99% fee for debit and credit cards, making it a good exchange for beginners. It’s crucial to learn about the fees associated with each payment option before deciding on an exchange or which payment option is better for you. 

STEP 3 – Placing a Buy Order  

You can now buy Bitcoin and other cryptocurrencies after selecting an exchange and connecting a payment method. In recent years, cryptocurrency and its exchanges have gradually gained popularity. In terms of liquidity and feature set, exchanges have expanded significantly. What was once called a fraud or dubious has evolved into something that can be considered reliable and legitimate.

Crypto exchanges have now progressed to the point that they offer almost the same functionality as their stock brokerage equivalents. You’re ready to go once you’ve found an exchange and linked a payment process.

Today’s crypto exchanges have a variety of order forms and investment options. Almost every cryptocurrency exchange accepts market and cap requests, with some even accepting stop-loss orders. Kraken has the most order types of the exchanges listed above. Market, cap, stop-loss, stop-limit, and take-profit limit orders are all available on Kraken.

Aside from various order forms, exchanges often provide ways for clients to set up recurring investments, allowing them to dollar cost average into their preferred investments. For example, Coinbase allows users to schedule transactions for each day, week, or month. Creating an account on a cryptocurrency exchange is all you need to do to buy Bitcoin or other cryptocurrencies, but there are a few other precautions to take for added safety and protection.

STEP 4: Choose Safe Storage

Wallets for bitcoin and other cryptocurrencies are a safe way to store digital assets. Keeping your crypto in your personal wallet rather than on an exchange means that only you have access to the private key to your funds. It also allows you to store funds outside of an exchange, reducing the chance of your funds being stolen if your exchange is hacked.

While most exchanges provide users with wallets, security is not their primary concern. For large or long-term cryptocurrency holdings, we don’t suggest using an exchange wallet.

Some wallets have a greater number of features than others. Some are Bitcoin-only, while others allow you to store a variety of altcoins. Some wallets also allow you to exchange one token for another.

You have a variety of choices when it comes to selecting a Bitcoin wallet. The definition of hot wallets (online wallets) and cold wallets is the first thing you can learn about crypto wallets (paper or hardware wallets).

What is CFD and How to Buy Bitcoin with CFD? 

Contracts for Difference, which are usually called CFDs, are financial derivative instruments that are widely used by day traders to express their views on the market. Unlike in traditional trading where you need to buy an underlying asset and pay a full price, with CFD you make a financial bet on the price more and get the difference between the open and close position in cash but not the physical asset or security. When you trade CFD, you can start investing with a small minimum trade amount usually starting at $10 or less but you need to be able to cover the margin or the difference in price. That is why CFDs are considered being risky instruments, as you can potentially lose more than they originally invested when the price goes against you. Investors can also use leverage to boost their trading profits but that can also result in the magnified losses if traded irresponsibly. 

While CFD is considered to be a complex instrument, if you take some time to understand how they work it becomes very easy. But what is essential is to manage your risk properly and not to invest more then you are prepared to lose. You have to be extremely careful with leverage especially if you are making your first steps in trading and always use features such as Stop Loss. 

So, how can you buy bitcoin with the CFD broker and what are the main things you need to know? 

How to buy Bitcoin with Leverage? 

Leverage is a popular tool in CFD trading and is essentially borrowing money at a low cost for a particular trading transaction. Say if you want to borrow money with a credit card company you will pay 20% p.a. or even more. But you can also borrow money with a broker, for a very short period of time at a low cost. 

Using leverage, say 10:1 means that if you buy $1000 worth of Bitcoin in one transaction, your actual trading position will be x10 or $10,000. If the price of the Bitcoin increases by 10% (which is quite normal given Bitcoin price volatility), your profit on that trade would be $10,000 * 10% = $1,000. And while the price of an asset only increased by 10%, as you invested $1,000 and made $1,000, your actual trading profit equals 100%. That is how leverage works and that is why it is so popular among investors. But you also have to remember about the risks involved and that if the trade goes against you, the losses can exceed the initially invested amount. 

How to Buy Bitcoin with CFD Broker and which platform to choose from? 

There is a large number of CFD brokers where you can buy Bitcoin but not all of the platforms are trustworthy and reliable. Our team at EthereumTrading.pro prepared a series of CFD Broker reviews where we provided information on a number of platforms. We covered the main features of these brokers and also explained what pros and cons of using each one of them. We also want our readers to stay away from scam brokers and aiming to uncover untrustworthy ones. 

But today we want to highlight two of the most popular CFD brokers that we liked and can recommend. 

How to Buy Bitcoin with AvaTrade

AvaTrade is an award-winning CFD broker that has been operating since 2006 and currently regulated in 6 jurisdictions. AvaTrade has more than 200,000 active traders who place more than 2 million trades each month. AvaTrade offers a range of professional trading terminals including Meta Trader, AvaOptions, AvaTrade Web Trading Terminal and mobile trading app AvaTradeGO. 

AvaTrade Review Trading Terminal

AvaTrade also offers automated trading and is one of the main partners of ZuluTrade, the world largest social trading platform. With AvaTrade and ZuluTrade you can auto-follow experienced and professional traders and simply copy their trades for a small profit share. That is a great way to start investing with top-performing traders and learn their trading style. It is also a good opportunity to make some passive income as now you don’t have to do all the investment research yourself and can trust it to the professional. With ZuluTrade, you can see all the investment strategies and manager on the social trading platform, and chose to follow these strategies via AvaTrade. 

AvaTrade offers CFD trading capability in most of the popular asset classes such as stocks, commodities, forex, indices, cryptocurrencies and ETFs. AvaTrade offers leverage which, at the moment of writing this article, for Bitcoin was 20:1. 

How to Buy Bitcoin with the Bitcoin Revolution

Another popular trading platform where you can buy and invest in Bitcoin is the Bitcoin Revolution. It is an automated trading platform and it works with a number of preferred partner broker platforms, most of which are Cyprus based and CySEC regulated CFD broker. Bitcoin Revolution has more than 1,8 million active traders from more than 100 countries. It offers CFD trading in stocks, forex, commodities, ETFs and cryptocurrencies. You can buy Bitcoin, Ethereum and 10 other most popular cryptos using leverage and ultra-low spreads. 

bitcoin revolution review - trading results

Bitcoin Revolution operates a proprietary built web-based platform that is very easy to use and navigate but still offers a full set of professional trading capabilities required for fundamental and technical analysis, have access to forex and earnings calendar, margin calculator and most popular trades that others are making. Bitcoin Revolution also offers a vast number of educational resources dedicated to trading and investing. The newbies can find out how to buy Bitcoin and other cryptos with the Bitcoin Revolution and professional traders can learn and improve their advanced technical skills. 

How to Buy Bitcoin and Trade CFDs in the USA? 

While most of the European CFD brokers are open for business and can take customers from anywhere in the world, if you are a US citizen you will find it difficult to onboard with these brokers. That is because US regulations are different and brokers need to have a  separate license for the US. So what can you do if you are a US citizen and how you can buy Bitcoin with CFD in the US?  

One of the options you have is to join ZuluTrade, the world largest social trading platform and their US partner broker. When you visit ZuluTrade, open Free Account and ZuluTrade will connect you to the broker available for US clients. 

ZuluTrade Brokers

After you open a Free Account with ZuluTrade and the US-registered CFD broker, you will be able to follow top-performing traders and copy their trading strategies. But once the broker account is open, you can also make other trades not necessarily via ZuluTrade. Social Trading is a great tool for newbie traders or if you don’t have time to dive into trading full-time. 

Top Platforms to Buy Bitcoin in the US

Hot Wallets  

“Cold” wallets are another term for online wallets. Hot wallets are digital wallets that operate on internet-connected devices such as laptops, smartphones, and tablets. Since these wallets produce the private keys to your coins on these internet-connected devices, this may pose a risk. While a hot wallet can be very useful for quickly accessing and transacting with your money, keeping your private key on an internet-connected computer makes it more vulnerable to hacking.

This may seem unlikely, but people who do not use adequate protection while using these hot wallets risk having their funds stolen. This is a common phenomenon that can occur in a variety of ways. For example, bragging about how much Bitcoin you have on a public forum like Reddit while using little or no protection and storing it in a hot wallet is not a good idea. However, if precautions are taken, these wallets can be made to be safe. Minimum criteria should include strong passwords, two-factor authentication, and secure internet surfing.

Small quantities of bitcoin or cryptocurrency that you are actively trading on an exchange are better stored in these wallets. A hot wallet is similar to a checking account. According to conventional financial wisdom, you can keep just your spending money in a bank account and put the rest of your money in savings or other investment accounts. Hot wallets fall into the same category. Mobile, laptop, platform, and exchange account custody wallets are all examples of hot wallets.

Exchange wallets, as previously said, are custodial accounts offered by the exchange. The private key to the cryptocurrency stored in this wallet is not held by the owner of this wallet form. Your funds would be lost if the exchange were to be hacked or if your account was to be compromised. Inside cryptocurrency forums and groups, the term “not your key, not your coin” is frequently used.

Cold Wallets 

A cold wallet is simply a wallet that is not linked to the internet and therefore poses a significantly lower risk of being hacked. These wallets are also known as hardware wallets or offline wallets.

These wallets store a user’s private key on a device that isn’t connected to the internet, and they can have software that runs in the background so that the user can access their portfolio without risking their private key.

A paper wallet is also the safest place to store cryptocurrency offline. A paper wallet is a wallet that can be printed from a variety of websites. It then generates both public and private keys, which you can print out on paper. You can only access cryptocurrency in these addresses if you have a piece of paper containing the private key. Many people laminate these paper wallets and keep them in their bank’s safe deposit box or even in their home safe. Since you can’t easily sell or exchange Bitcoin stored in these wallets, they’re best for high security and long-term investments.

A hardware wallet is a more popular form of a cold wallet. A hardware wallet is a USB drive computer that safely stores a user’s private keys off the internet. This has a number of benefits over hot wallets, including the fact that it is untouched by any viruses that might be present on the user’s device. Private keys never come into contact with your network-connected device or potentially compromised applications with hardware wallets. These devices are also open source, allowing the community to decide their safety through code audits rather than a corporation declaring it safe to use.

Cold wallets are the safest place to keep Bitcoin and other cryptocurrencies. However, setting them up usually necessitates a little more experience.

A smart way to set up your wallets is to have three of them: a buying and selling exchange account, a hot wallet to carry small to medium quantities of crypto you want to trade or sell, and a cold hardware wallet to store larger holdings for long periods of time.

Alternatives to Coinbase and Binance Although exchanges like Coinbase and Binance remain common ways to buy Bitcoin, they are not the only option. Additional procedures used by Bitcoin users are listed below.

Bitcoin ATMs  

Bitcoin ATMs function similarly to Bitcoin exchanges in person. Individuals may put money into the machine to buy Bitcoin, which is then transferred to a safe digital wallet. Bitcoin ATMs have grown in popularity in recent years, and Coin ATM Radar will help you find the nearest ones.

P2P Networks

Unlike decentralised exchanges, which anonymously match buyers and sellers and facilitate all aspects of the transaction, some peer-to-peer (P2P) exchange platforms allow users to communicate directly. A good example of this form of exchange is Local Bitcoins. Users can post requests to buy or sell Bitcoin after establishing an account, including details about payment methods and price. Users then search through a list of buy and sell deals, selecting trade partners with whom they want to do business.

Some aspects of the trade are made easier by using local Bitcoins. Although P2P exchanges do not provide the same level of anonymity as decentralised exchanges, they do allow users to compare prices. Many of these exchanges also have rating systems, which enable users to assess potential trading partners before making a transaction. 

Learn Trading Skill with Bitcoin Revolution.

With free online courses, webinars, and workshops, you can learn how to trade – or expand your expertise. This from a global leader in the capital markets with over 45 years of experience. Short, step-by-step courses let you learn at your own speed, with videos, interactive activities, and quizzes to help you check your understanding. 

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