Bitcoin is the largest cryptocurrency by market capitalization and shows no sign of giving up this position any time soon. As bitcoin and the crypto markets as a whole are becoming more mainstream, there are now ways to buy BTC using a bank account and in sizes smaller than you might have thought.
If you’re thinking of buying bitcoin for the first time and want to use your bank account, then using eToro could be for you. eToro removes the need to use complicated crypto wallets and specialist crypto platforms, not to mention thousands of dollars to book just one trade.
How to Buy Bitcoin With a Bank Account
One of the ways to buy bitcoin using a bank account is through a reputable online broker. Follow these steps below to buy bitcoin (BTC) on eToro with a bank account.
Step 1: Create a Free eToro Account
Visit the eToro website or download the mobile app to register a new account. You must complete industry-standard KYC (Know Your Client) documentation, the eToro crypto knowledge test, and complete the client categorization questionnaire. After working through those tasks, you will gain access to the eToro trading platform and its full features, including deposits, withdrawals, and trading.
Step 2: Deposit Funds Using Bank Transfer
Use the “Deposit Funds” button on the left side of the screen to access the banking page and choose “Bank Transfer” from the available options. Connect your bank account to eToro by entering the necessary information.
The minimum deposit amount via bank transfer on eToro is $500.
Tip: Ensure the details on your bank account matches with your personal information on eToro.
Step 3: Buy Bitcoin With USD
Click on “Discover” on the left side of the home screen and select “Crypto.” Choose BTC among the options and click “Trade.” Enter the amount of BTC you want to buy and complete the transaction. Afterward, you’ll have the BTC in your wallet when you check your “Portfolio” page.
Source: eToro
Why Buy Bitcoin with eToro?
The intuitive functionality of the eToro platform already allows millions of existing eToro clients a way to seamlessly navigate the crypto markets and buy Bitcoin with a few clicks.
Keeping on top of your portfolio is crucial, and you can manage your eToro account from anywhere that has an internet connection. If it’s more convenient, you have the option to download the eToro app and track your performance on mobile devices.
The crypto markets are unregulated, but eToro has experience providing regulated trading and investment services in traditional markets such as stocks, ETFs and options. An advantage of eToro being a multi-asset broker is that you can invest in other markets using the same account that holds your crypto positions. That way you can build a well-thought-out balanced portfolio which includes stocks, ETFs, and options as well as cryptocurrencies.
The Risks and Benefits of Buying and Owning Bitcoin
Investing involves establishing the risk-return associated with a particular situation and whether that matches your investment aims. With crypto markets being characterized by extremely high price volatility, the risk-return proposition facing traders can sometimes be extreme.
There are risk factors associated with cryptos, like bitcoin, which apply to all forms of investing, most notably “market risk” – the chance that the value of your investment might go down. There are also crypto-specific risks which also need to be considered and include:
- Price volatility – If, or possibly more accurately, when, the price of your bitcoin investment fluctuates dramatically you might trade emotionally and fall into the trap of letting psychological biases distort your thinking.
- Lack of regulation – Unlike markets such as the stock market, investing in bitcoin is unregulated which means that you have few rights to appeal for compensation or against malpractice. There are also examples of governments introducing laws to make crypto trading illegal.
- Operational risk – The infrastructure supporting crypto markets such as bitcoin is still developing. That leaves room for intentional and unintentional lack of oversight by individuals and corporations to put your investments at risk.
- Lack of intrinsic value – Bitcoin has no intrinsic value. Its worth is dependent on other parties considering it to be valuable and being willing to buy it. This is also the case for fiat currencies, but as cryptocurrencies are a more recent development there are more question marks about their true value.
- Liquidity – Crypto markets are relatively illiquid which can make it harder to trade out of positions and increase the costs associated with executing trades.
The reasons why investors buy cryptocurrencies such as bitcoin change over time and some investors give greater weight to some areas of analysis over others, but they include:
Groundbreaking technology: Bitcoin was founded in 2009 as a response to the way the financial crisis of 2008 exposed weaknesses in the traditional fiat money banking system. Many crypto purists are still attracted to the deregulated and decentralized nature of blockchain technology.
Cross-border payments: Blockchains and cryptocurrencies such as BTC offer a viable alternative to traditional cross-border payment and settlement methods.
Diversification: Spreading your investments across a range of different asset groups is one of the five golden rules of investing. While many investors would advise against being too overweight crypto, there could be justifiable reasons for including coins like bitcoin in many portfolios.
- Cross-border payments
- Diversification
- Groundbreaking technology
- Independent of central banks
- Transparent blockchain record-keeping
- Price volatility
- Lack of regulation
- Operational risk
- Lack of intrinsic value
- Illiquid markets
Final Thoughts
The ability to buy bitcoin with a bank account on eToro is another example of how cryptocurrencies are becoming more mainstream. How that will play out in terms of the market prices is difficult to predict.
Despite the major developments in the sector, it is important to note that any cryptocurrency is extremely
FAQs
- Can I buy Bitcoin directly from my bank account?
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Yes, you can buy BTC with your bank account on eToro. Select the “Bank Transfer” payment method during the purchase in order to do so.
- What are the fees for buying Bitcoin on eToro?
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eToro offers a fee of just 1% on every crypto trade. That means you can expect to pay a transparent fee of 1% when you buy Bitcoin on our exchange. You can read more about our fees here.
- What is the eToro Money app?
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The eToro Money app is a crypto wallet available to existing eToro clients. It provides users with easy access to the crypto market, using the same login credentials as their trading account.
This information is for educational purposes only and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments.
This material has been prepared without regard to any particular investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Not all of the financial instruments and services referred to are offered by eToro and any references to past performance of a financial instrument, index, or a packaged investment product are not, and should not be taken as, a reliable indicator of future results.
eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this guide. Make sure you understand the risks involved in trading before committing any capital. Never risk more than you are prepared to lose.