Choose Between a Bitcoin Exchange and Broker: Factors to Consider

Key factors to make your choice

When it comes to buying bitcoin, selecting the right exchange or broker is crucial. You want to work with a reputable company that offers secure operations, competitive fees, and a user-friendly platform. Here are some things to keep in mind when selecting a bitcoin exchange or broker:

1. Reputation: The reputation of the exchange or broker is critical. You want to work with a trustworthy company that has a good track record of customer service and secure operations. Look for reviews and feedback from other users to gauge the company’s reputation.
2. Security: Security is a top priority when it comes to bitcoin exchanges and brokers. Look for companies that offer robust security measures such as two-factor authentication and cold storage. Also, look for companies that provide insurance in the event of a hack or theft.
3. Fees: The fees charged by bitcoin exchanges and brokers can vary widely. Look for companies that offer competitive fees and transparent fee structures, so you know exactly what you’ll be paying for each transaction.
4. User Experience: The user experience of the exchange or broker’s platform is also important. Look for companies that offer a easy to to navigate and understand platform with high level of customer service.
5. Payment Methods: Different exchanges and brokers offer different payment methods. Look for companies that offer payment methods that are convenient for you, such as bank transfers or credit cards.

Once you’ve considered these key factors for selecting a bitcoin exchange or broker, you’ll be better equipped to make an informed decision that fits your needs. To help get you started, we’ve compiled a list of some of the best bitcoin exchanges and brokers that offer strong security, competitive fees, and a user-friendly experience together with a good choice of payment methods.

But before that let’s view really quick the pros and cons of both choices.

Bitcoin Exchange vs Broker: Pros and Cons Comparison

When investing in Bitcoin, you can choose from the following options:

• Buying Bitcoin CFDs with an online CFD broker
• Buying physical coins on a cryptocurrency exchange

CFDs are financial derivatives in which you speculate on the rise or fall of the Bitcoin price.

With this option, you can profit from price changes without having to deal with the technology and storing tokens.

If you buy physical coins with an exchange, you can send them to your personal bitcoin wallet. In this way, you have full control of your coins and act as your personal bank.

Rest assured that with either option, you have an excellent opportunity to benefit from the current boom in Bitcoin.

• If you have a great technical enthusiasm for blockchain technology and its applications, physical coins from an exchange is probably the best option for you

• If you are more interested in trading and bitcoin price spikes and do not want to hold the coins for a long time, then Broker is the way to go

Hey, have you made a choice yet?

We’ve compiled a list of the best exchanges and brokers around, so you can easily compare and choose the one that’s right for you.

Tim Kaiser Cryptocurrency veteran since 2017

Step 2

Create an account

On this step, we will show you step-by-step how to buy Bitcoin right now.

For our guide, we will use eToro – which was the winner of our comparison through the best exchanges and brokers as its platform prvides both options: CFD trading and a wallet for physical coins.

Registering, depositing and buying Bitcoin with this provider is a simple process fro beginners. And it is similar with most of the other platforms so it will help you even if you chose another exchange or broker for your needs.

Now let’s see go through the entire process from creating an account to buying your first Bitcoin.

To buy Bitcoin, you need to create an account here. Registration takes like 2-3 minutes. First – enter your data in the fields as shown in the image: You will immediately receive an e-mail asking you to confirm your account with one click – do that.

Verify your account

In order to verify your account, you need to submit both proof of identity and proof of address documents. Your verification process will only commence after you’ve provided the platform with both of these documents.

You can also scan your documents directly to the eToro platform using the app.

Proof of Identity

The proof of identity (POI) document you submit should contain your name, date of birth, a clear photograph, issue date, and an expiry date if applicable.

For the quickest processing time, eToro recommends submitting a passport as your POI. But a government-issued ID or driver’s license may also be used. If the document is double-sided and contains relevant information on both sides, make sure to upload both sides for review.

Proof of address

When submitting your proof of address (POA) document, it must include your full name, current address, and an issue date that is no older than three months. The name or logo of the issuer must also be clearly visible.

To make sure that all four corners of the document are visible, you can scan it against a differently colored background.

Complete your profile

Because eToro is a regulated platform with operating licenses in EU and other jurisdictions, you will asked to asnwer a few routine questions in order to get started.

To do this, click on ‘Complete Profile (1)’ and follow the steps that are part of the KYC security system.

When you reach ‘100% completed profile’ – you are ready to deposit (2).

Step 4

Add funds to your account

In the bottom left-hand corner you will see a blue Deposit Funds button that will lead you to the selection of the payment method:

You must then select the amount to be deposited and choose your prefered payment method.

The most popular deposit methods are PayPal, debit and credit card, and SEPA bank transfer. After the first deposit you will be added several other payment methods, such as UnionPay, Skrill, Neteller, etc.

Step 5

Buy Bitcoin (BTC)

Once you have made your deposit, you can start buying Bitcoin immediately. To find your favourite cryptocurrency, add it (1) to your list of favourites (2). You will go to the search box to type Bitcoin (1), then ‘finish’ (2) to move on. Now think about the amount for which you want to buy Bitcoin (3). And whether you want to use leverage of up to 2:1.

Enter the desired amount (4) and… Congratulations, you have purchased your first Bitcoin tokens after clicking the ‘Open position’ button (5)!

How to sell Bitcoin?

Of course, you can also sell BTC and other cryptocurrencies on a cryptocurrency exchange. Let’s see how this works:

1. Go back to the list of favourites, but this time click on ‘Sell’.
2. Enter the desired amount and click on the ‘Open Position’ button.
3. So you sold Bitcoin or bet on a price drop

Fees for buying and selling bitcoin on eToro

Still not sure where to buy Bitcoin?

Buying bitcoin with a broker

Through brokers, you can use CFDs (contracts for difference) to speculate on the rise or fall of cryptocurrency prices, but without actually owning them. Instead of buying physical bitcoins, you buy ‘long’ or ‘short’ positions from a broker.

This allows you to trade bitcoins with leverage.

For example: if you want to buy bitcoins for 1,000 EUR, you will receive bitcoins worth exactly 1,000 EUR.

If you instead buy contracts for difference 2:1, you will receive bitcoin CFDs worth 2,000 EUR.

This way, you can earn more with the same capital as a result of price fluctuations, but also the risk increases as you can lose more.

Another advantage of CFD trading with brokers is that they are strictly regulated by financial regulators.

So you can be sure that your investments are protected and that everything is legal.

Also, you do not have to worry about storing your bitcoin, as you are only trading CFDs. The winner of our test among bitcoin brokers is Libertex. Libertex offers CFD-only trading and is one of the largest online brokers in the world.

When to choose Libertex?

• You want to actively trade bitcoin and cryptocurrencies
• You want to deposit with PayPal
• You want to trade on a regulated trading platform
• You want to trade not only bitcoin, but also other asset classes
• You don’t want to worry about the security of your cryptocurrencies

When it comes to the cryptocurrency boom, both Bitcoin exchanges and brokers can offer excellent opportunities to benefit from this emerging trend. Our top picks, eToro and Libertex, stand out with their low fees and top-notch security measures, making them a solid choice for anyone looking to invest in Bitcoin. Whatever your decision may be, we wish you the best of luck with your investments!

Buying bitocin with an exchange

On cryptocurrency exchanges, you can buy real bitcoin and actually own it.

Unlike CFD brokers, on exchanges you do not trade contracts, but buy real coins and then transfer them into your wallet.

With this option, you can ensure that you own your cryptocurrencies.

Similarly, for example, you can send your bitcoins to altcoin exchanges such as Binance and then continue trading there. However, the responsibility for storing cryptocurrencies passes to you. The recent Binance hack shows that large wallets on cryptocurrency exchanges are becoming a target for hacker attacks.

Unfortunately, many cryptocurrency exchanges are still unregulated, so for security reasons, you should transfer purchased cryptocurrencies to your personal wallet as soon as possible.

One exception is eToro, the only cryptocurrency platform that is subject to multiple financial supervision in the EU and offers deposit protection for depositors. Especially beginners are advised to invest in cryptocurrencies via eToro or to choose a CFD broker.

If you decide to buy cryptocurrencies on an unregulated bitcoin exchange, we recommend using your personal wallet and storing cryptocurrencies on it. For less experienced investors, we recommend a regulated exchange such as eToro or a cryptocurrency broker.

When to choose eToro?

• Want to buy real bitcoins using PayPal
• You want to buy real bitcoins using a credit card
• Want to trade on a regulated bitcoin exchange
• You want to be able to trade CFDs
• You want to trade not only cryptocurrencies, but also forex, commodities or indices
• You are looking for a community-based trading platform

Final thouhts: Buying Bitcoin made easy

Buying Bitcoin doesn’t have to be a complicated process. By following our five-step guide, you can purchase Bitcoin safely and securely with a reputable exchange or broker.

Choosing the right exchange or broker, creating an account, verifying your identity, adding funds, and finally making your purchase are all crucial steps that should be approached with care and consideration.

With this guide, you’ll be well-equipped to navigate the world of Bitcoin and take advantage of the exciting opportunities it presents.

Remember, the key is to take your time, do your research, and make an informed decision that fits your needs and investment goals. Good luck, and happy investing.

[FAQ] How to buy Bitcoin

How do I buy Bitcoin?

You can buy Bitcoin through a Bitcoin exchange or broker. The process typically involves creating an account, verifying your identity, adding funds, and then making your purchase.

What’s the best way to buy Bitcoin?

The best way to buy Bitcoin depends on your preferences and needs. Some popular options include Bybit, Binance, and eToro.

How much does it cost to buy Bitcoin?

The cost of buying Bitcoin depends on the current market value of Bitcoin, as well as any fees charged by the exchange or broker you use.

Can I buy Bitcoin with a credit card?

Yes, some exchanges and brokers allow you to buy Bitcoin with a credit card. However, keep in mind that credit card transactions may incur higher fees.

How long does it take to buy Bitcoin?

The time it takes to buy Bitcoin varies depending on the exchange or broker you use, as well as the payment method you choose. Some exchanges allow you to make instant purchases, while others may take several days to process your transaction.

Is it safe to buy Bitcoin?

As with any investment, there are risks associated with buying Bitcoin too. However, if you choose a reputable exchange or broker and take necessary security precautions, buying Bitcoin can be a safe and secure process.

Can I buy a fraction of a Bitcoin?

Yes, Bitcoin can be divided into smaller units, and you can buy fractions of a Bitcoin, known as “satoshis” or “sats”.

Do I need a wallet to buy Bitcoin?

If you plan to hold your Bitcoin for an extended period, it’s recommended to store it in a secure wallet. Also some exchanges and brokers offer built-in wallets for your convenience.

Can I sell my Bitcoin after I buy it?

Yes, you can sell your Bitcoin at any time through an exchange or broker. The process is similar to buying Bitcoin and involves selling it for fiat currency or another cryptocurrency.