Patrick Iturra, Asset/Investment Manager & Consulting.
Bitcoin ATMs: A Physical Exchange
In the ever-changing cryptocurrency world, Bitcoin ATMs are making a solid impression. These machines essentially operate as physical Bitcoin exchanges. Users insert cash and, in return, receive Bitcoin, which is immediately transferred to their online wallets. Walmart Inc. (WMT), the well-known retail giant, has started incorporating these Bitcoin ATMs into their stores. As a result, Bitcoin ATMs have become highly accessible and convenient for regular users.
However, there is a caveat. Since early 2020, Bitcoin ATMs have started requiring government-issued IDs for transactions. This step has been taken to bolster security and streamline operations.
Understanding the Costs
Nevertheless, it’s essential to understand that using Bitcoin ATMs comes with certain costs. Users must cover purchase and conversion fees when converting their fiat currency to Bitcoin. On a global scale, these fees are relatively high. On average, the purchase fee is 8.4% of the total amount, while the sale fee reaches 5.4%.
Peer-to-Peer Exchanges: Direct Links between Users
Shifting gears, another viable alternative to buying Bitcoin is through Peer-to-Peer (P2P) exchanges. Services like LocalBitcoins are leading the way in this regard.
“LocalBitcoins has decided to stop providing Bitcoin trading services. New account registration was suspended on 2023-02-09.”
A P2P (peer-to-peer) cryptocurrency exchange functions as a digital trading arena, bringing together individuals looking to buy and sell cryptocurrencies such as Bitcoin. This platform facilitates direct transactions between parties, bypassing any need for middlemen.
In the process of acquiring cryptocurrency via a P2P exchange, the buyer sends the pre-determined amount from their account directly to the seller’s account. This transaction occurs not between an individual and a financial services company but between two separate customers.
While P2P exchanges might not offer the same level of anonymity as decentralized exchanges, they provide certain advantages. For instance, they allow users to shop around for the best deal. Additionally, many P2P exchanges incorporate rating systems, which help users assess the credibility of potential trading partners.
You might also be interested: Understanding and Avoiding Cryptocurrency Ponzi Schemes
The Role of Mainstream Brokerages
Meanwhile, mainstream brokerages are also making their mark in crypto trading. Robinhood Markets Inc. (HOOD) is a prime example of this trend. Robinhood has taken the initiative to eliminate commissions on cryptocurrency trades and purchases. Instead, it generates revenue by routing its trading volume to other platforms or brokerage firms. Notably, Robinhood supports a range of cryptocurrencies, including Bitcoin, Bitcoin Cash, Litecoin, Ethereum, Dogecoin, and Ethereum Classic.
Simultaneously, other platforms, such as Coinbase, offer users access to various cryptocurrencies. Furthermore, traditional brokers are not far behind. A notable example is Fidelity Investments, which offered Bitcoin investment options for 401(k) accounts in 2022.
In conclusion, these alternative methods of buying Bitcoin showcase the dynamic evolution of the cryptocurrency market. Consequently, it is becoming increasingly accessible and adaptable to meet the diverse needs of investors.
I am attaching a list of exchanges where you can buy Cryptocurrencies:
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“I don’t sell houses. I grow your Assets” –Patrick Iturra, Asset/Investment & Management.