How to buy Bitcoin

There are several ways to buy Bitcoin. And within each one, there are several options.

It can be as simple as opening your usual broker, selecting the amount you want to buy and pressing the button. Or as complex as converting your euros into USDC (a stablecoin), anonymizing them, buying bitcoins and sending them to your private wallet. Between those two extremes, there are intermediate options.

The difficulty lies less in the process itself than in choosing reliable providers, understanding the real cost and deciding what you will do with the bitcoins afterwards. That is why it is important to understand that the buying process can be separated from the choice of platform and custody.

Where to buy Bitcoin

Although I will devote the next article to explaining in more detail where to buy bitcoin, I will summarize your options here:

The most common way to buy real BTC is to use a centralized exchange (a CEX). These platforms let you deposit euros by bank transfer or card and exchange them for bitcoin. There are many, but the most popular worldwide is Binance.
There are also financial platforms that are not CEXs, but that let you do what is known as an onramp, in other words, exchange fiat money for cryptocurrencies, usually stablecoins such as USDT or USDC.
A third route is through P2P arrangements: you have euros or dollars, another person has BTC and you reach an exchange agreement, setting the method -electronic or an in-person meeting- and the fee. Be careful because the exchange is usually more expensive and it can also lead to scams.
BTC ATMs: in reasonably large cities there are ATMs similar to bank machines where you insert fiat banknotes and the ATM sends the bitcoins to your wallet. It is convenient and carries less risk than the previous method, but the fee is usually high.
Brokers such as XTB that let you buy ETFs that track the price of bitcoin. You are not actually buying bitcoin, but another asset; however, if you only want price exposure and not the other advantages of bitcoin it may be enough for you. It is regulated and very convenient.

The detailed comparison of platform types, regulation, fees and withdrawals is in the article about where to buy Bitcoin. Here we will focus on the process once you have chosen the provider.

How to buy Bitcoin step by step in the best possible way

The first thing is to rule out the methods I do not recommend, except in exceptional cases and if you know what you are doing. So, I do not recommend buying BTC on a CEX or via P2P.

An ATM or a broker may make some sense depending on your situation, although, in general, they are not what I recommend either.

So, what remains is to use a platform that allows onramping. My recommendation is that you use this one.

The steps are as follows:

The first thing is to have your own private addresses. Think of them as your cryptocurrency accounts, similar to a bank IBAN, which is your fiat-money account. You will need two: one for Bitcoin and one for the stablecoin, which will be on a different network.
The wallets are interfaces for viewing and operating those private addresses. You can use a multichain wallet such as OKX that lets you create both addresses, or use Rabby for the EVM (Ethereum Virtual Machine) network where we will receive the stablecoin, and OKX itself only for the Bitcoin address. The reason for using Rabby is that it is more convenient than OKX.
Install the browser extensions for each of them. Tip: it is not mandatory, but I recommend having two different browser profiles, separate from each other and from your usual profile. This removes possible interference from other extensions. Even if you use OKX for both, I recommend using two browsers and configuring one extension with your Bitcoin address and the other with your EVM-network address.
Each account is determined by twelve key words. Write them down on paper and store it VERY CAREFULLY, somewhere it cannot be lost and where nobody but you has access, because it is the only way to access the funds in the wallets.
Once you have your addresses, both BTC and EVM, you create an account on the platform I mentioned earlier (this one)).
You add your personal details to complete KYC ((Know Your Customer), which is mandatory. That way, the bank and therefore the Spanish tax authorities will know that you bought cryptoassets when you carry out the onramp.
You select the stablecoin in which you will receive the exchange from your fiat money and the network. My recommendation: USDC and the Arbitrum network. It is the most popular combination by number of users and costs.
Carry out the onramp by making a normal bank transfer from your bank to the account shown on the platform and that belongs to you. This way you will receive the USDC at your private EVM address. It is important that the transfer is between two accounts in your name; otherwise, it will be returned.
The next step would be to buy Bitcoin with the USDC you have from the previous step, but the problem is that the swap requires paying a fee in a currency you do not yet have (Ether on the Arbitrum network). To get it, go here, connect your wallet and top up. You will pay 5 USDC and in return receive Ether on the Arbitrum network. Now you are ready to buy your bitcoins.
There are several platforms that perform the swap, for example Chainflip. Once you enter with the browser profile where you have the extension with your EVM-network wallet installed, in the selector choose your starting currency (USDC on the Arbitrum network, an important detail), your final currency (BTC on the Bitcoin network) and add two addresses: the Refund Address, where you enter your EVM address and the Destination Address, where you enter your BTC address. Make VERY sure you copy and paste both fields correctly and press the button.
The wallet extension will open asking you for permission to perform the swap. Review and accept several times. Once you do that, after a while -generally around 20 minutes- the process will complete and you will have your BTC at your Bitcoin address.

Yes, as you can see, it is a long process the first time. The next times you will start at step 8.

There are two fundamental points here:

The first is to review everything without rushing every time, but especially the first time you carry out the process.
The second point is that the first time do not transfer all your capital at once, but carry out the process with five or ten euros and verify that everything arrives correctly. Once you have checked it, then yes, make the exchange with the rest.

If you follow both pieces of advice the risk of making a mistake drops dramatically and, above all, if one does happen, the consequences are minimal. It is better to pay the fee twice because if you make a mistake the first time, losing five euros is not the end of the world, but losing several thousand can be a serious problem.

Finally, record and keep the date, the amount, the quantity of both USDC and BTC and the fees. This information will be needed for the Spanish tax authorities.

Important: an additional step could be added to this process, between 8 and 9, in which we could anonymize the amounts. It is not essential and I am not going to explain it, but I am leaving you a link so you can investigate.

Next steps

Below are the next articles in the series. They are designed so that, if you do not know much about Bitcoin, you can read them in order, but they are all independent, so you can jump to whichever interests you most:

Frequently asked questions

What is the easiest way to buy Bitcoin?

The easiest way is usually to use a platform that lets you deposit euros and buy Bitcoin directly. You can also gain exposure to its price through certain financial products, although in that case you will not be buying bitcoins that you can send to your own wallet.

Where can you buy Bitcoin?

You can buy it through centralized exchanges, onramp services, P2P transactions or Bitcoin ATMs. Another option is to use a broker to invest in products that track its price, although that is not the same as owning BTC directly.

Is buying Bitcoin the same as buying a Bitcoin ETF?

No. When you buy BTC, you can send it to a Bitcoin address and custody it yourself. With an ETF or another financial product, you have economic exposure to Bitcoin, but you do not own bitcoins that you can withdraw to a private wallet.

What is a cryptocurrency onramp?

It is a service that lets you convert traditional money, such as euros, into cryptoassets. Depending on the platform, you can buy a cryptocurrency directly or first receive a stablecoin to use afterwards.

Do I need a wallet to buy Bitcoin?

Not necessarily. Some platforms can custody the bitcoins for you. However, if you want to keep them under your own control and use them directly on the Bitcoin network, you will need a wallet and your own address.

What is a wallet seed phrase?

It is the set of words that allows you to recover access to a wallet. You must store it securely and never share it with anyone, because someone who gains access to it may be able to control the associated funds.

Is it advisable to make a small Bitcoin purchase first?

Yes. If it is your first time using a platform, a wallet or making a transfer between networks, starting with a small amount lets you check that the addresses and process are correct before moving a significant amount.

Why do you need to check the network and addresses so carefully?

Because the same cryptocurrency can exist on different networks, and the source, destination and refund addresses must be compatible with the transaction. An error when copying an address or selecting a network can cause the funds to be lost.

What fees are involved when buying Bitcoin?

It depends on the method used. There may be costs for depositing money, buying the cryptoasset, using a blockchain, swapping currencies and withdrawing the bitcoins. That is why you should consider the total cost of the transaction, not just the fee advertised by the platform.

Is it better to leave bitcoins on the platform or send them to your own wallet?

It depends on what you want. Leaving them in third-party custody is usually simpler, while self-custody gives you direct control of the funds but also makes you responsible for protecting the keys and seed phrase.

What data should I keep after buying Bitcoin?

You should keep at least the transaction date, the euros used, the amount of cryptocurrency received, its value at that time and the fees paid. This information makes it easier to track the investment later and comply with tax obligations.

Does buying Bitcoin through P2P or an ATM cost more?

It can. In P2P transactions, the price and conditions depend on the counterparty, while ATMs usually include their own margins and fees. Before using either method, it is worth comparing the final cost with other alternatives.