Ask CryptoVantage: Can I Buy Bitcoin Without Using an Exchange?

Bitcoin ATMs

Buying Bitcoin from an ATM is pretty similar to having an in-person Bitcoin exchange experience.

Just as you would buy any product from a vending machine, Bitcoin ATMs allow you to insert cash into the machine and receive Bitcoin in return. For this purchase, you will need to have a secure digital wallet to which the Bitcoins you have bought will be deposited. The process is easy and usually takes a few minutes.

As the adoption of Bitcoin and cryptocurrencies in general increased, the number of installed and functioning Bitcoin ATMs continues to rise. You can check out CryptoATMRadar.com for a map that shows you the nearest Bitcoin ATMs in your location.

The downside of using a Bitcoin ATM is that it tends to be prohibitively expensive (due to fees) and there can be security issues.

Person-to-Person (P2P) Transactions

If you can’t find a Bitcoin ATM near you, you can easily buy Bitcoin directly from another Bitcoin owner.

This experience is fairly simple and similar to buying an item from eBay or Craigslist. Several platforms allow you to connect with Bitcoin owners in your area.

On LocalBitcoin.com for instance, you can locate people near you selling Bitcoin. You can even arrange in-person meetings to conduct the trade, or you can use provided escrow services as a safety measure.

This is one of the riskier ways to acquire cryptocurrency but the aforementioned escrow services can be very helpful.

Ideally you would simply buy your Bitcoin from someone you already know and trust 100% (like a friend or family member).

Crypto Credit Cards 

Select credit card issuers allow users to make Bitcoin purchases using a credit card.

For credit card issuers that allow Bitcoin purchases, the process is usually quite similar to that of linking your bank account to a crypto exchange via an automated clearing house or ACH. However, it is important to note that Bitcoin credit card purchases are assessed differently than regular credit card purchases.

In most cases, the process is considered risky as the credit card issuer may lower your credit limit or outright close the card given Bitcoin’s volatile nature and also depending on your credit limit. Bitcoin credit card purchases also come with higher charges as there are broker and credit card fees as well as transactional fees to consider. Also if you are not in the U.S, you might have to consider a 1 to 3% foreign exchange fee.

Digital Payment Platforms

If you already have an account with a digital payment platform such as PayPal, Cash App, or Venmo, you can buy Bitcoin.

However, these alternatives are not ideal if you want to self-custody your crypto as platforms such as Paypal and Venmo do not allow you to hold crypto in your wallet. Cash App does allow crypto withdrawals.

With most digital payment platforms, your private keys remain within the platform and therefore you are forced to use the digital payment app as your wallet. Although most digital payment solutions offer an easy and intuitive way of buying Bitcoin free from risks, they also come with relatively higher fees.

Bitcoin Rewards

As Bitcoin’s mainstream adoption continues, an array of banks and financial institutions are creating new ways for Bitcoin enthusiasts to get access via Bitcoin rewards.

These are mostly in the form of credit card-based incentives that dole out cryptocurrency rewards to credit card users. Examples include platforms such as BlockFi which offers a credit card with Bitcoin rewards as cashback for transactions made on the card. Other platforms include the Brex Cards, Sofi Credit Card, Tomo Credit Card, and Gemini Credit Card to mention a few.