Investing In Bitcoin – Why You Should Have Multiple On Ramps
When investing in Bitcoin it would be considered a prudent move to have more than one means to get your fiat currency into Bitcoin, and on the flip side of the digital coin, more than one way to get your money back out of Bitcoin.
Please keep in mind that I am not offering financial advice here, and you must seek your own financial advice as to what will best meet your specific needs, and be compliant with the laws in your jurisdiction.
Here, I will share with you my views on why having multiple on and off ramps into crypto is important at this point in time.
If you were around this space in the chaotic bull run of 2017 you would have seen the issues that many newcomers to crypto faced when looking at investing in Bitcoin. Websites and exchanges took weeks to verify accounts and identity.
If you were trying to get yourself set up in the later days of November 2017 or the early days of December 2017, this delay could easily have equated to thousands of dollars in missed growth in Bitcoin alone.
A smart move in times like these, when the market is still relatively quiet, is to get yourself set up on as many exchanges and websites to enable you to move your fiat into crypto quickly and easily. You need to be positioned to act when you choose to based on where you are at that specific time, and not still be waiting for approvals to come through.
Before you have reached this stage, you should have laid your foundation with regard to setting up your encrypted email accounts and 2 Factor Authentication. If you haven't done that yet, I strongly suggest that you consider the earlier post about the first steps to take in Getting Started In Crypto - a Cryptocurrency for Beginners guide.
Websites to Set Up With
There are many different websites you can set up with, but I'll share with you what I believe are the cream of the crop at this point in time, and my reasons for including them in my list. In the interest of full disclosure, some of these links do include affiliate links. A key thing you should look for is reliability and reputation. Always check for yourself what people are saying in various forums about the sites and services suggested here, and ultimately, decide for yourself.
A preferred method for getting fiat into crypto for me at this stage is to link one of my bank accounts to various websites and either use a wire transfer, direct debit, or Bpay. Depending on where you live the scope of the services may vary from those listed in this post, so please use what works best for you.
Coinjar offers what seems to be an attractive avenue to convert your fiat into Bitcoin through a number of ways, with the most appealing of them on the surface being the 0% fee for BPay deposits. The main drawback for me with this, however, is that the BPay deposits can take as long as 3 days for the fiat to be on your Coinjar account. Their mining fees for moving Bitcoin off their website and into your wallet or onto an exchange are set at a default 0.0005 BTC, which can be a high cost, particularly if the demand on the network is lower.
When looking at strategies for investing in Bitcoin I have found that the best value is in using POLi through Coinspot (you'll notice there's no affiliate link to Coinspot here). The fluctuation of the mining fees for the network is something that you'll need to manage if your chosen crypto is Bitcoin. If you want to diversify your portfolio into other cryptocurrencies you can do this directly through Coinspot.
By using the POLi payment method, you can deposit fiat from your bank account directly into Coinspot almost instantly, and the fees for buying cryptocurrencies are currently locked in at 1%, which is comparatively lower than the alternatives.
If your strategy is to buy Altcoins on an exchange that are not listed on any of the sites here, in times of high demand on the Bitcoin network, I would leverage the Altcoins that the exchanges use as trading pairs. These are typically Ethereum, Litecoin, and sometimes (in the case of less favorable choices for exchanges) Dogecoin.
Below, you will find a detailed outline of the current fees for a handful of sites that you can use to move your fiat into crypto when investing in Bitcoin. There are many more out there, and you may well find others that you prefer to use. Make sure you consider each stage of the transaction before you commit to using them, including:
- Cost and speed of fiat into the website
- Cost of the 'on-site' fiat balance being converted to cryptocurrency
- Cost of moving the cryptocurrency balance off the site and into your chosen wallet or exchange
Fees current as of 21st April 2018 - please confirm current fee structure with the website you are using before transacting.
| Website | Deposit Method | Fee | Notes |
|---|---|---|---|
| Coinjar | BPay | 0% | No fee for fiat deposits via BPay. Only able to buy Bitcoin at this stage. Bitcoin transfer fees from Coinjar website to other wallets can be comparably higher than alternatives |
| Coinjar | Cash Deposit | 1.5% | Only able to buy Bitcoin at this stage. Bitcoin transfer fees from Coinjar website to other wallets can be comparably higher than alternatives |
| Wyre | Bank Transfer | 0.75% | Low fees. Limited countries serviced and limited support |
| Coinspot | POLi | 0% | Ability to buy multiple cryptocurrencies for fiat directly. 1% fee for buying and selling cryptocurrencies. Free to withdraw AUD to Australian bank accounts |
| Coinspot | BPay | 0.9% | Ability to buy multiple cryptocurrencies for fiat directly. 1% fee for buying and selling cryptocurrencies. Free to withdraw AUD to Australian bank accounts |
| Coinspot | Cash Deposit | 3% | Ability to buy multiple cryptocurrencies for fiat directly. 1% fee for buying and selling cryptocurrencies. Free to withdraw AUD to Australian bank accounts |
| Cointree | POLi | 3%K | Allow 1 to 2 days for deposits to appear online. Limited to $5000. Additional fixed fee commission charged when buying Bitcoin plus GST |
| Cointree | Bank Transfer | 3% | Allow 1 to 2 days for deposits to appear online. Limited to $5000. Additional fixed fee commission charged when buying Bitcoin plus GST |
| Cointree | Cash Deposit | 3%K | Allow 1 to 2 days for deposits to appear online. Limited to $5000. Additional fixed fee commission charged when buying Bitcoin plus GST |
| Coinbase | Bank Transfer | 1.49% to 3.99% | Fiat and Bank Transfer fees vary depending upon your country and can include a combination of both Variable and Fixed Fees |
| Bit Trade | POLi | 4.9% | High fees. Stringent KYC and AML processes resulting in slow turn around time |
| Bit Trade | Bank Transfer | 5% | High fees. Unreliable verification processes experienced for linking Bank Accounts |
Investing in Bitcoin
Investing in Bitcoin, like any other type of investment, has its risks. The cryptocurrency market is more volatile than other markets with more maturity, but this is also the reason for the astronomical gains (and losses) in this space. Please ensure that you do your own research before taking action on anything with regard to investing in cryptocurrency.
This article was recenty posted on my website TechMagy and shared here with the Steemit community to add value.
The first post in this series Starting with Bitcoin - Encrypted Email and 2FA can be found right here on Steemit and it explores setting up your foundation before investing in Bitcoin.