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What’s The Best Way to Buy Cryptocurrency?

There are many ways to buy cryptocurrency. Which one is right for you?

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Investing in cryptocurrency used to be a complicated process, requiring many apps for every step of the journey. You’d need an app to deposit your cash and convert it to crypto, followed by finding an exchange that lets you convert your new crypto holdings to the desired currency before you can invest in interest accounts.

Along the way, there are transaction fees and withdrawal fees to consider on every platform, in addition to different payment methods and their costs. So without careful planning, you could be starting your investment journey in the red due to all these costs.

Summary of key points about buying crypto

How to Buy Cryptocurrency

Here are some of the top payment options available when it comes to buying cryptocurrency, and different payment methods come with differing levels of convenience and fees:

Buying Crypto Within Europe Through SEPA

If you’re in Europe, Cabital allows you to buy crypto using SEPA transfer from your bank’s app. SEPA (Single Euro Payments Area) is only available for European bank accounts, and it lets you send and receive payments in euros between supported bank accounts within the eurozone. 

As SEPA utilises bank transfers, you’ll enjoy the added security provided by the banks on their networks, as these can only be initiated by authorised personnel for verified accounts.

The processing time usually takes only one to two working days, and you’ll be ready to invest in crypto. From your crypto wallet, you can convert these into different cryptocurrencies based on your crypto asset allocation preferences and putting them to work in a crypto interest account.

Buying Crypto Globally With SWIFT

SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a global payment network that enables customers worldwide to send and receive payments, regardless of their bank. Each financial organisation member has a unique code that is combined with the respective bank account number to transfer funds. 

Like SEPA, SWIFT also utilises bank transfer, so your transaction is protected by the banks’ networks security,

SWIFT transfers are mainly used for international transfers across different currencies, and they come with longer processing times (of up to four days) than SEPA. For SWIFT transfers, you may incur additional fees in exchange rate charges and processing fees from your bank. 

Buying Crypto With The Convenience of Credit Cards

Credit cards sound like the most convenient method: enter credit card details and hit buy. However, the convenience may come with additional fees. For example, one Bitcoin costs US $44,000. If you make the purchase via SEPA or SWIFT, most platforms don’t charge additional fees. However, if you choose to buy with a credit card, you’ll have additional fees that can raise the price to over US $46,000. 

Paying through credit card can also expose you to additional risks, as payment on merchant platforms can expose you to the risk of data breaches.

Right now, we’re working on getting credit card payments to you at a fair rate—follow us on LinkedIn if you’d like updates on our latest product releases.

Buy Crypto With P2P Exchanges 

P2P exchanges are a transaction matching platform that works like an online shopping platform like eBay. Sellers can sell their crypto on it, and buyers can browse the order record, completion percentage, and rates offered before making a decision. 

There are less fees involved, where buyers aren’t usually charged zero trading fees, and sellers are charged a small amount of transaction fees for every completed order. However, as it’s a P2P transaction, there is a risk of identity fraud, where they use a third-party account for transactions, or reversible payments, where they transfer the payment, then claim they didn’t make it and ask the bank to reverse the payment.

Buy Crypto Using Third Party Platforms

This payment method is a popular alternative for users in other regions to buy cryptocurrencies from U.S. exchanges, as the latter may offer more cryptocurrency options or better fees. You pay for crypto through a third party platform, which handles the payment and transfer of the crypto into your account on the exchange.

However, the third-party platform fee can range from 2 – 5%, and you’ll be charged in USD, which can result in increased costs if the exchange rates aren’t in your favour. 

Table 1: Comparison table of payment methods

Ultimately, the option you choose will depend on your location, urgency, security, and the final cost of the cryptocurrency you’re looking to purchase.

Where to Buy and Sell Cryptocurrency

You can usually buy, trade and sell cryptocurrency through exchanges, or buy, earn and sell through a savings platform like Cabital, if it’s available for your region. 

How to Buy and Sell Cryptocurrency on Exchanges

You can buy cryptocurrency on exchanges, which offer a wider range of coins. However, these often come with fees and premium exchange rate. There is usually an upfront fee that’s a flat fee, or a percentage of the amount you’re purchasing. However, besides the advertised fee, you should check the exchange rate against other exchanges before purchase.

When it comes to exchange rates, Cabital’s Buy and Sell feature has one of the lowest conversion spreads, so you pay less when you’re buying cryptocurrencies. On other platforms and exchanges, the conversion spread could be as high as 8%, with waiting times of up to 3 days. 

Table 2: Comparison table of purchasing crypto with Cabital vs other exchanges

When it’s time to withdraw your crypto earnings, you have a few options: 

1. Convert to Cash

First, you’ll need to sell your cryptocurrencies, and this comes with a selling order fee that usually ranges from 0.1% to 1%. After that, you may also have to pay a withdrawal cash fee that could be a certain percentage, or a flat amount.

These fees can put a significant dent in your earnings, so remember to do your research on the best rates before choosing an exchange to buy and sell with. 

2. Transfer Into Another Exchange or Crypto Wallet

If you prefer transferring your assets to another wallet or crypto exchange, it’s time to withdraw your crypto. Most platforms have a minimum withdrawal amount, so you should take this into consideration before choosing an exchange. After all, you don’t want to be unable to withdraw your crypto when the time comes. 

There’s also a withdrawal fee that accompanies every transaction, which varies by exchange. To minimise the withdrawal costs, you should look into withdrawing larger amounts of crypto instead of withdrawing small sums. 

How to Buy and Sell Cryptocurrency with Cabital

If you’re in Europe, you can buy, earn and sell cryptocurrency with Cabital using SEPA. You can transfer euros into your Cabital wallet with SEPA, before choosing to convert them into three leading cryptocurrencies: Bitcoin (BTC), Ethereum (ETH) and the Tether stablecoin (USDT). 

We’ve designed a system that aggregates and checks rates across multiple exchanges so you can enjoy the best rates without needing to research on the rates offered by other exchanges.

Once you’ve converted your euros to crypto, your crypto will be directly deposited into your Cabital savings account so you can put it to work right away!

Ready to get started on buying and selling crypto with Cabital?

This article has been prepared by Cabital Fintech (LT) UAB  (the “Company”) and is general background information about some of the Company’s activities at the date of this presentation.

This article does not contain all the information that is or may be material to you and should not be considered as advice or a recommendation to you in respect of the holding, purchasing or selling of digital assets and does not take into account your particular objectives, financial situation or needs. This article has been made to you solely for information purposes. This presentation may be amended and supplemented as the Company sees fit, may not be relied upon for the purpose of entering into any transaction and should not be construed as, nor be relied on in connection with, any offer or invitation to purchase or subscribe for, underwrite or otherwise acquire, hold or dispose of any digital assets, and shall not be regarded as a recommendation in relation to any such transaction whatsoever. The contents of this presentation should not be considered to be legal, tax, investment or other advice, and you  should consult with your own counsel and advisers as to all legal, tax, regulatory, financial and related matters concerning an investment in or a disposal of such digital assets and as to their suitability for you.

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The information in this article has not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the presentation and the information contained herein and no reliance should be placed on it. Information in this article (including market data and statistical information) has been obtained from various sources (including third party sources) and the Company does not guarantee the accuracy or completeness of such information.