Why do I need a centralized exchange?
Due to regulations and Know Your Client (KYC) laws, bank transfers are only allowed through regulated means. So to first acquire Bitcoin or other cryptocurrencies, you will first need to use a centralized exchange.
If you do decide you want to own the actual cryptocurrency instead of a traditional investment product like the exchange-traded Bitcoin fund, you will need to use a centralized method to be your “on ramp” into crypto, such as Coinbase, Binance, Gemini, or Kraken, which are all discussed below. It also happens to be the easiest (and can be the cheapest) way to acquire crypto. Similar to when you create a brokerage account to buy traditional stocks and ETFs, you are required to fill in your personal information and go through the standard Know Your Client (KYC) process, which includes uploading your personal ID or passport, and probably some kind of selfie to verify your identity.
These centralized exchanges are also currently the best place for short-term trader as they have active order books, abilities to set limit orders, and have active market makers for best pricing. This will hopefully change in the future where you have these capabilities in a decentralized exchange.
Always remember that these exchanges own the crypto, not you. As long as your assets are on the exchange, your balances are essentially IOUs, and as we have seen from the failures of FTX, Voyager, Celsius, and others, your crypto could be at risk while sitting with the exchange if they were to experience a failure of some sort. Knowing this, visit our Crypto Wallet guides and take hold of your crypto.
Depending on what state you live in, your options may be limited as to what exchange you can use and what crypto you can buy/sell. See our Decentralized Exchange section for how to acquire any crypto you want.
Here are trusted, centralized ways to buy crypto in the USA, including crypto-only exchanges, online payment processors, and traditional investment companies:
Coinbase
One of the most recognizable names in the crypto industry, the Coinbase exchange is available in all US states (one of only three exchanges available in New York), and many other countries. As a USA regulated company, they are restricted from operating in certain high risk countries as defined by the US Government.
Coinbase offers a subscription services for no fee trades. This doesn’t include trading on their “Advanced trade” (formerly Coinbase Pro). Their Advanced trade service allows you to view active order books, set limit orders as well as stop-limit orders. The fees to use this service are much cheaper than using the standard buying/selling sections within the app.
How to buy crypto on Coinbase:
- You must first open the account and go through their verification process.
- Connect a bank account, PayPal, or wire funds to fund your account.
- If you send funds through your bank account, you will be able to immediately buy crypto using the funds you are depositing, but you won’t be able to withdraw them to your personal wallet until your funds settle, similar to how it takes a few days for cash to be available when you deposit a check to your bank account.
- Once you deposit funds, Coinbase does a great job simplifying the purchases of crypto inside the app or on their website, typically only taking a few clicks to proceed with a purchase. Just enter the dollar amount you want to buy, and click purchase.
Gemini
Gemini, founded by the Winklevoss twins, is another American crypto exchange based in New York. As a USA regulated company, they are restricted from operating in certain high risk countries define by the US Government. Gemini is available in all 50 states (one of only three exchanges available in New York), and over 60 countries worldwide.
Like Coinbase, Gemini offers an advanced trading platform for traders, which also has reduced fees if you are willing to learn how to use it. Otherwise, the standard platform is very beginner-friendly and offers one of the easiest interfaces out there to buy and sell crypto.
How to buy crypto on Gemini:
- You must first open the account and go through their verification process.
- Connect a bank account, PayPal, debit card, or wire funds to fund your account.
- If you send funds through your bank account, you will be able to immediately buy crypto using the funds you are depositing, but you won’t be able to withdraw them to your personal wallet until your funds settle, similar to how it takes a few days for cash to be available when you deposit a check to your bank account.
- Once you deposit funds, Gemini does a great job simplifying the purchases of crypto inside the app or on their website, typically only taking a few clicks to proceed with a purchase. Just enter the dollar amount you want to buy, and click purchase.
- As mentioned above, you can reduce your fees when buying and selling crypto if you switch from the Simple platform to the Advanced platform. This can be done in your profile/settings.
Binance US
Binance is the biggest centralized exchange in the world. However, the USA version is much more limited than their international product since the USA has much more strict rules and regulations. Binance is available in most US states, excluding New York, Texas, Louisiana, Hawaii, Idaho, and Vermont.
Binance offers a a robust trading platform if you want to be more active trading versus investing as well as an easy-to-use interface for simple buying and selling. They also have some of the lowest fees, with some Bitcoin trades as low as 0%.
How to buy crypto on Binance:
- You must first open the account and go through their verification process.
- Connect a bank account, PayPal, debit card, or wire funds to fund your account by going to the Wallet section, then choosing Deposit, then selecting USD.
- You can also choose to deposit cash at the time of your purchase.
- If you send funds through your bank account, you will be able to immediately buy crypto using the funds you are depositing, but you won’t be able to withdraw them to your personal wallet until your funds settle, similar to how it takes a few days for cash to be available when you deposit a check to your bank account.
- Once your account is funded, the next step is to click the Buy Crypto link, which brings you to buy Bitcoin by default. Type in the dollar amount you want to purchase, then choose the source of the funds, whether it is USD that you transferred in, or your bank account from which you want to pull money from, then select Preview Purchase, and Confirm.
Kraken
Kraken is a San Francisco based crypto exchange. It is available in all USA states, except Washington and New York, and several other countries around the world.
Kraken offers a Pro version for traders to go with their standard, simple interface for beginners.
How to buy crypto on Kraken:
- You must first open the account and go through their verification process.
- Connect a bank account for ACH purchases, Apple or Google Pay, PayPal, or debit card.
- ACH and Paypal deposits are held from withdrawal for 7 days
- ACH purchases, debit, and Apple/Google pay purchases have a 72 hour hold before you can withdraw
- Your verification level dictates your purchase timing. If you are verified to Express, Intermediate, or Pro levels, you may be able to instantly buy after depositing, but you will still be subject to hold times for withdrawals.
- Once your account is funded, the next step is to click the Buy crypto link, which brings you to buy Bitcoin by default. Type in the dollar amount you want to purchase, then select how you want to pay for it, then select Review, and Confirm.
Bitstamp
Bitstamp is a European based crypto exchange available both internationally and the USA. Most US states are available, with the exception of Hawaii and Nevada.
Bitstamp is available to institutional traders, Pro traders, and more simple investors.
How to buy crypto on Bitstamp:
- You must first open the account and go through their verification process.
- Connect a bank account for ACH transfers or purchase using a credit or debit card.
- You can also choose to deposit cash from a bank account at the time of your purchase.
- You can use deposited funds for trading as soon as funds have been credited to your account, but you are unable to withdraw those funds for 7 business days after.
- Once your account is funded, select Buy/Sell on the platform after choosing your desired crypto. You are able to select an “instant order” which is placing a market order, or you can choose your price in which you’d like to buy/sell through a limit order. Enter the amount of money you want to buy and click Buy BTC (or whatever crypto you are buying).
Crypto.com
Crypto.com is a crypto exchange based in Singapore. It is available in many international companies and 49 states in the USA, excluding New York.
How to buy crypto on Crypto.com:
- You must first open the account and go through their verification process.
- Connect a bank account for ACH transfers, send a wire, or purchase using Apple/Google Play.
- You can use deposited funds for trading as soon as funds have been credited to your account, but you are unable to withdraw those funds for 7 business days after.
- After your account is funded or connected to your Crypto.com account, you can proceed in the application to buy crypto. Select your crypto of choice, type in how much you want to purchase, then select how you want to pay for it. Click Buy, then review the details and Confirm.
Robinhood
The popular traditional stock and ETF investing application known for its zero fee trades added cryptocurrency trading in 2018. It is available in all USA states.
**If you live in Hawaii or New York, you are restricted from withdrawing your crypto to an outside wallet, so you are essentially just betting on the price and not really owning the crypto.
How to buy crypto on Robinhood:
Creating a Robinhood account is like any other broker or crypto exchange. You’ll need to provide personal information and go through the account opening process. Once your account is funded, you will be able to search for and buy around 15 different cryptos, but your location may limit your access to some of them.
PayPal
PayPal is a well known payment processing company, facilitating transfers for businesses and individuals for both business and personal reasons. In 2020, PayPal began allowing crypto trading from within their website, and even went so far as to create a stablecoin in 2023.
USA customers of PayPal, excluding Hawaii, can transact in 5 different cryptos, including BTC, ETH, LTC, BCH, and PayPal’s stablecoin, PUSD.
How to buy crypto on PayPal:
Within their website and application, there is a section dedicated to crypto, and they can’t make it much easier to buy. Simply click the Buy button from within their Crypto section, select the crypto you want to buy, type in the dollar amount, and select where to pay from, whether it is your PayPal balance, connected bank account, or debit card.
Cash App
Cash App is a mobile payment processor developed by Block (formerly Square) that allows users to transfer money to one another using a mobile app. They have since integrated the ability to buy stocks as well as Bitcoin. You also have the ability to direct deposit your paycheck, and earn interest on your savings.
How to buy Bitcoin on Cash App:
- Create an account.
- Link a debit card in the settings in the section called Linked Banks.
- In the money section of the app, you have the ability to add cash, and buy Bitcoin. Click Bitcoin, then select Buy.
- In this menu, you have the option of changing the order type. If you want to purchase at current market prices, no need to change. If you want to set a limit order to say you want to buy only if the Bitcoin price reaches a certain level, change the order type and enter a Custom Purchase Order.
- Enter the amount you want to buy and select Next.
- It will ask you to enter your pin.
- Review your order details to make sure everything looks right, then click Confirm.
Fold App
We reviewed the Fold app here, but Fold also offers a way to purchase Bitcoin in the app in addition to being a Bitcoin rewards app, unless of course you are in New York and Texas (as of March 2024).
Fold does not add any spread to Bitcoin purchasers if you have the Fold card. They also don’t charge any fees if you are a premium Spin+ subscriber. For regular Spin users, there is a 1% fee to purchase through their Auto-Stack feature, and a 1.5% fee to purchase Bitcoin in their app. If you aren’t in New York or Texas, here is how to buy Bitcoin on fold:
- Fund your Fold account through ACH, debit card, or Venmo and Apple Cash.
- Inside the application, select the Bitcoin symbol B icon towards the bottom right, next to settings.
- Enter the amount you want to purchase, and it will give you the detail on how many sats that will be purchased along with any fees.
- Click Confirm Purchase.
Fidelity Crypto
Fidelity is one of the biggest asset managers in the world and offer their own custodian services for both Bitcoin and Ethereum. Having a traditional investment firm handle the security of assets is a huge benefit for some because they have a strong track record in the financial world.
They don’t offer any other cryptos at this time, but are evaluating expanding their options. Availability is also somewhat limited as of March 2024. It is available in most states (38), excluding Alaska, Arizona, Connecticut, Georgia, Hawaii, Louisiana, Maryland, Minnesota, New Mexico, North Carolina, Rhode Island, and West Virginia.
Fidelity does not offer round the clock trading, but the hours are expanded from typical market hours of 9:30am-4pm Eastern Time to 4am-12am Eastern Time. They also do not allow customers to transfer the crypto from Fidelity to another wallet, but have stated it is in the pipeline. They also can charge up to a 1% spread on transactions.
How to buy Bitcoin & Ethereum on Fidelity:
- Open a Fidelity Crypto account.
- If you aren’t already a Fidelity brokerage customer, they will also open a brokerage account for you when opening your crypto account, which will be used to bring in funds from your bank account before transfering over to the crypto account.
- Once your Fidelity Crypto account is funded, go to your Crypto account and go to Bitcoin or Ethereum, then simply click the Buy button.
- You have the ability to enter market orders or set limit orders if you only want to buy if BTC or ETH fall to a certain price.
