How to choose a Marketplace, Broker or Service when buying Bitcoin

Let’s assume you’re someone who has never bought Bitcoin before but plans to invest money by buying a small amount of Digital currencies without knowing what exact type of service to use even though there is an overwhelming number of options available to help you buy Cryptocurrencies

Knowing that there are plenty of choices to be found online that provide trading services for Bitcoin, you’ll probably prefer a hassle-free experience or finding the best bargain. 

There are different types of Merchants & Businesses offering Bitcoin Trading services, we have highlighted 3 types in this post; Crypto Brokers, Traditional Crypto Exchanges and Peer-to-Peer Marketplaces.

Investors who are interested in getting the best bargain should consider signing-up with active marketplaces usually a Traditional Exchange or P2P Marketplace, in order to find the most competitive Bitcoin rates. It’s possible to sometimes find cheaper rates on low liquidity Exchanges or find a better bargain from sellers on P2P marketplaces, it really depends if there is an individual who is willing to offer the lowest price among all other listings. The price of Bitcoin varies across all Marketplaces, since this Digital asset is being traded between Marketplaces, Countries and Currencies

Finding the preferred Marketplace

Bitcoin, is still an unregulated asset in the majority of countries around the world therefore as an investor, it is your responsibility to due diligence especially when it comes to choosing the right services as it could potentially get you in trouble. Some Nations are not in favour of Digital currencies, it’s advisable to check the country’s jurisdiction surrounding Digital assets like Bitcoin because there is the possibility of the breaking law. Example of this, would be traders sentenced for money laundering for buying or selling on Localbitcoins or credit card transaction getting blocked for purchasing digital assets using Major Banks services

Here is what to consider before using a Marketplace or Merchant to buy Bitcoin from;

Reputation & Credibility 

Buy Bitcoin from an established Marketplace run by a credible team or reputable company, try to avoid new upcoming Businesses as there is a lot risk associated with centralized services that have little to no track record in the Cryptospace. Coinbase is a great example of institutional backed Exchanges that actually provides a small degree of insurance for Digital Currency investor, do background research on the Crypto Exchange to find out whether is regulated and run in professional manner, Traditional Exchanges or Bitcoin Merchants that deal with your Credit Card need to comply with local jurisdiction due the nature of this business

Market Liquidity

It’s best to trade on an active Marketplace with significant volume to take advantage of the best price discovery, as buyers want the lowest price offered by competitive sellers. Traders can search up the country’s Bitcoin Trading volume and trace the share of volume amongst all the active Marketplaces, find out where buyers and sellers are trading your preferred Fiat currency in exchange for Bitcoin. Make sure to determine Peer-to-Peer Exchanges like Localbitcoins or Remitano, as these Marketplaces could also record significant trade volume especially in markets that lack the necessary Bitcoin infrastructure or services

Privacy & Storage Facilities 

Find out how Digital assets are being stored by third-party services as businesses should be as transparent as possible when dealing with a self-governed Blockchain. Keep in mind, that services that have control over your private key, have control over your Digital Assets this creates a lot of risk and uncertainty. Even disclosing personal information via KYC procedure, this puts you at risk, therefore, it advisable to check the terms & conditions or policies surrounding the privacy, data and storage facilities

The majority of Cryptocurrency Merchants and Quick-to-buy Bitcoin services that provide more user-oriented services tend to charge above market rates, in order to generate consistent profit this means investors will be paying a premium price.  1st Time Bitcoin buyers will discover that there is a lot to learn when it comes to managing digital assets, this to many is also one the main barriers to entry that hinders individuals from investing in Cryptocurrencies.

Easiest & Quickest Method for Bitcoin Beginners

Why complicated a process? If this is your first time buying virtual digital currencies, you should consider the most easiest approach to buying Bitcoin instead of finding the fastest or cheapest options. 

CryptoHype recommends, that serious investors should consider doing in-depth market research of all the available Traditional Exchanges and P2P Marketplaces that are based within the country. Bitcoin buyers will often have a variety of domestic and international services to choose from but for first-time buyers it’s best to pay a premium price to use services like (Changelly) that allow instance purchase of Bitcoin using a Visa/Mastercard or sign up with a traditional exchange like Coinbase that offers a quick way to buy BTC.

Signing up with Exchange via a KYC procedure is time-consuming, however these services have made it incredibly easy to buy and trade Cryptocurrencies so it’s definitely worth your time to register and verify an account with a trustworthy Exchange if you plan to trade Bitcoin in the near future. Some Exchanges don’t require KYC procedure for small purchases and often have the most competitive rates.

For those looking to buy small amounts or reside in a region of the world with little no to Bitcoin trading services available, we recommend using Peer to Peer Exchanges or to directly buy BTC from a Crypto Merchant

Considering himself a futurist, Sven has the passion to keep up with the latest technological breakthrough especially surrounding the FinTech sector. From a young age, Sven has been fascinated with Traditional Financial Markets but has after discovering Blockchain Technology in 2014 he has dedicated most of his time staying ahead in the industry

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