Key Takeaways
- Buying, selling, and trading cryptocurrencies in the US is legal, guided by federal agency recommendations despite the absence of specific federal laws.
- Bitcoin is highly divisible, allowing purchases in any amount, with the smallest unit being a Satoshi (one hundred millionth of a Bitcoin).
- Leading US exchanges like Kraken, Bitstamp, Uphold, and Coinbase offer unique features catering to different investor needs.
- Selling Bitcoin in the US is straightforward but subject to capital gains tax on profits.
- Bitcoin can be used to purchase other cryptocurrencies, with transactions becoming easier once you own crypto.
Can You Buy Bitcoin in the US?
Yes, purchasing Bitcoin in the US is legal. You can buy Bitcoin through online exchanges like Coinbase or Bitcoin ATMs using various payment methods, including credit/debit cards, bank transfers, or wire transfers.
What’s the Minimum Amount of Bitcoin You Can Buy?
Bitcoin’s divisibility allows you to purchase any fraction of it. The smallest unit, a Satoshi, is 0.00000001 BTC. Most exchanges let you specify the amount you wish to spend in USD, and they’ll calculate the equivalent Bitcoin amount.
Top Crypto Exchanges in the US
Here’s a breakdown of notable US exchanges:
| Exchange | Key Features | Drawbacks |
|---|---|---|
| Kraken | High security, diverse crypto offerings | Faced SEC regulatory challenges |
| Bitstamp | User-friendly platform, good for beginners | Limited advanced features |
| Uphold | Versatile trading options, supports multiple assets | Higher fees for certain services |
| Coinbase | Beginner-friendly, easy onboarding | Higher fees, SEC legal issues |
👉 Discover the best crypto exchanges for your needs.
Steps to Buy Bitcoin in the US
1. Choose an Exchange
Select a reputable exchange based on security, fees, and available cryptocurrencies.
2. Verify Your Identity (KYC)
Complete the Know Your Customer (KYC) process by submitting:
- Bank account details
- Government-issued ID (driver’s license/passport)
- Proof of residency
- A current photo
3. Fund Your Account
Deposit USD via bank transfer, wire, or card. Note that card purchases often incur higher fees.
4. Buy Bitcoin
Purchase Bitcoin at the current market rate or set limit orders for specific prices.
5. Store Your Bitcoin Securely
Options include:
- Hot wallets (convenient but less secure)
- Cold wallets (e.g., Ledger, Trezor – highly secure)
👉 Secure your Bitcoin with a hardware wallet.
6. Manage Your Investment
Hold, stake, trade, or use Bitcoin for transactions. The choice depends on your goals.
Cost-Effective Ways to Buy Crypto
- Bank/Wire Transfers: Lower fees but slower processing.
- Avoid Card Purchases: Higher fees (3–5%).
- Watch for Withdrawal Fees: Exchanges charge varying fees.
Selling Bitcoin in the US
- Transfer Bitcoin from your wallet to an exchange.
- Sell at the market price.
- Withdraw funds to your linked bank account.
- Remember: Capital gains tax applies to profits.
Using Bitcoin to Buy Other Cryptocurrencies
Yes! Once you own Bitcoin, swapping it for other cryptocurrencies (e.g., Ethereum) is simpler than buying with fiat.
Bitcoin Taxation in the US
Capital Gains Tax: Applies to profits from selling or trading Bitcoin.
- Short-term: Held <1 year – taxed as income.
- Long-term: Held >1 year – lower tax rates.
- IRS Reporting: All crypto transactions must be reported.
Conclusion
Buying Bitcoin in the US involves selecting an exchange, completing KYC, funding your account, and securing your purchase. While fees vary, bank transfers are often the cheapest option. Always consider tax implications when selling or trading.
FAQs
Is buying Bitcoin legal in the US?
Yes, it’s legal. You can purchase Bitcoin through exchanges or ATMs.
What’s the smallest Bitcoin amount I can buy?
You can buy fractions of Bitcoin, with the smallest unit being a Satoshi (0.00000001 BTC).
Which US exchange is best for beginners?
Coinbase is beginner-friendly, while Kraken offers advanced features.
How do I sell Bitcoin in the US?
Transfer Bitcoin to an exchange, sell it, and withdraw the funds to your bank account.
Are Bitcoin profits taxable?
Yes, profits are subject to capital gains tax. Short-term (<1 year) and long-term (>1 year) rates apply.