Knowing how to buy Bitcoin with cash can be a challenge, especially if you are looking for secure, private, and efficient options. In this guide, we explore methods that not only protect your privacy but also offer faster transactions and better rates.
Whether you want anonymity or you would rather buy Bitcoin in person, keep reading to discover the ways to enjoy flexibility and complete control.
Key Takeaways
- It is possible to buy Bitcoin with cash, but you will need a Bitcoin wallet address to complete the transaction. The crypto wallet address is the key to receiving Bitcoin.
- The five common ways to buy Bitcoin with cash are Bitcoin ATMs (automated teller machines), peer-to-peer (P2P) trading, retail stores, mailing cash for Bitcoin, and direct bank deposits.
- When buying Bitcoin with cash, it is crucial to consider security. If you are using an ATM, mailing cash, or doing a P2P trade, always make sure the seller is reliable.
Discovering How to Buy Bitcoin With Cash
Buying crypto with cash ensures convenience because you can explore as many cash to Bitcoin exchange options 24/7. This accessibility makes it easy for you to buy Bitcoin using Bitcoin ATMs, peer-to-peer (P2P) trading from the comfort of your home, and retailers.
But before exploring the best and cheapest way to buy Bitcoin with cash, it is important to first understand what Bitcoin is and how it has transformed the digital currency market.
Understanding Bitcoin
Bitcoin is a decentralized cryptocurrency that operates on a peer-to-peer network, using cryptography to verify and record transactions. It was invented by Satoshi Nakamoto in 2008 and originated from the desire to create a decentralized digital currency that operates without a central authority.
Bitcoin was built on blockchain technology—a distributed ledger that records all transactions across a network of computers. Initially, the cryptocurrency functioned as a medium of exchange, but it now represents a store of value or investment, similar to gold.
In 2017, Bitcoin faced scalability issues due to rising associated fees and slower confirmation times leading to the creation of Bitcoin Cash (BCH). BCH aimed to address these problems by increasing block sizes and reducing fees. That being said, let’s dive into the various cash options you can use to pay for Bitcoin.
1. Bitcoin ATMs
Bitcoin ATMs allow users to insert cash and receive Bitcoin directly into their Bitcoin wallets. These ATMs were established in 2013 and have become popular ever since, with over 31,000 machines installed worldwide, especially in the United States and Europe.
How Bitcoin ATMs Work
Bitcoin ATMs connect with your Bitcoin wallet to process your transaction and deposit the token. Platforms like Bitcoin Depot, Coincloud, and CoinFlip offer crypto ATMs in various retail locations, enable traders to purchase Bitcoin with cash.
Some ATMs only allow traders to purchase Bitcoin, but others are bidirectional, allowing you to also sell Bitcoin for cash. Whether you are using a one-way ATM or selling bitcoin through the bidirectional route, the process is similar;
- Download a digital wallet.
- Find a crypto ATM near you using online directories or tracking apps to find Bitcoin ATMs like LibertyX website.
- Complete the required verification by following the on-screen guide.
- You can scan your Bitcoin wallet QR code in many Bitcoin ATMs, while others offer Bitcoin address and private key in a receipt paper.
- Choose how much crypto you want to buy or sell.
- Once you confirm the transaction, the Bitcoin will be deposited in your wallet. Want to learn more about this process? Watch this short actionable video on how to use a Bitcoin ATM.
Pros
- Accessibility: Bitcoin ATMs provide an easy entry point into cryptocurrency.
- Privacy: Transactions are anonymous, requiring minimal personal information.
- Bitcoin ATMs license every transaction to protect your investments and ensure compliance, so you can worry less about scams and losing your funds.
- Convenience: Bitcoin ATMs are placed in various public locations, making it easier for users to buy or sell Bitcoin quickly.
- Many Bitcoin ATMs do not require a prior account; you can register right away and complete a transaction.
Cons
- Higher Fees: Additional fees can range from 5% to 27%.
- Security Risks: The lack of KYC (Know Your Customer) protocols can make these machines targets for fraud and scams.
- Limited Availability: While growing in number, Bitcoin ATMs are still not as widely available as traditional banking services.
2. Bitcoin Peer-To-Peer Trading
P2P trading allows traders to turn cash into Bitcoin through direct interaction with other traders who are willing to accept cash in exchange for Bitcoin. This method uses marketplaces like LocalCoinSwap, Binance, Paxful, Bybit, and Kraken to facilitate peer-to-peer trading.
How Bitcoin P2P Trading Works
This cash to Bitcoin method enables you to buy crypto from the comfort of your home. If you prefer, here is a guide you can follow (using Bybit Exchange for example):
- Select P2P trading on the services page. Choose the asset you want to buy at the top left corner, which in this case is BTC. Also, if you would like to display money using a different fiat, you can change it at the top right corner.
- Listing Offers: Sellers create listings on P2P exchanges like Binance or Bybit. Their ad specifies the amount of Bitcoin they want to sell, the price, limits, and accepted payment methods. Browse the listings and choose an ad that suits your preferences.
- Input the exact quantity of fiat or BTC you want to buy on the next page and click on “BUY” to make payment.
- Escrow Service: Once a buyer initiates a trade, the platform holds the seller’s Bitcoin in escrow until the buyer confirms the fiat payment using the method, such as bank transfers or cash deposits.
- Bitcoin Release: As soon as the seller confirms the cash deposit, they initiate the release of the Bitcoin held in Escrow.
The majority of P2P platforms require authentication before releasing Bitcoin, usually using Google authenticator or other means to ensure safety.
Pros
- P2P trading eliminates the need for intermediaries, allowing users to trade directly with one another.
- Accessibility: Users in regions that support Bitcoin can trade across borders without restrictions.
- Multiple Payment Options: Support various payment methods, enabling users to choose what works best for them.
- Market Flexibility: Users can select ads that match their rates, giving them a good deal.
Cons
- Fraud Risk: The lack of a centralized authority increases the risk of scams and fraudulent activities.
- Lower Liquidity: Some P2P marketplaces may not have the liquidity and trading volume of bigger centralized exchanges, making it challenging to find suitable Bitcoin sellers.
- Volatility: Since traders are in charge of the market due to decentralization, there could be price discrepancies and fluctuations.
- Potential for Disputes: If one party fails to fulfill their end of the deal, it may lead to disputes. It might take a few days for conflicts to be resolved. It might take a few days for conflicts to be resolved.
3. Purchasing Bitcoin from Retailers
Many US retailers, including Walgreens, Rite Aid, and CVS, teamed up with LibertyX to offer in-store Bitcoin purchases. This collaboration enables traders to buy Bitcoin at over 30,000 locations, including major retailers.
To find a store that is part of this collaboration, visit the LibertyX website and explore various locations in the United States, Canada, or the United Kingdom. Using these stores, you can buy up to $1000 in Bitcoin daily, with a minimum of $4.95 service fee at chain retailers.
How Purchasing Bitcoin From Retailers Works
- Visit the LibertyX website and create an account.
- Browse available locations and select the location where you want to buy Bitcoin from the list of 30,000+ locations.
- Generate an order number by entering the Bitcoin wallet address to which you want to send the Bitcoin then click on “Start purchase.”
- The cashier will scan your barcode at the store.
- Pay the equivalent amount of the Bitcoin you want using cash, and your account will be credited with the Bitcoin within 60 seconds.
Pros
- Retailers provide a convenient approach for individuals to buy Bitcoin using cash or debit cards, making it accessible to those who do not want to use online exchanges.
- Quick Transactions: Bitcoin transactions can be processed in minutes, allowing for faster access to funds.
- Improved Privacy: Since you do not have to register for an account with a centralized institution, you can maintain a level of privacy.
Cons
- Security Risks: While blockchain technology is secure, users face risks of losing access to their Bitcoin wallets if they forget passwords, private keys, or experience hacks.
4. Mailing Cash for Bitcoin
If you prefer a traditional approach, sending cash through the mail is an option to buy Bitcoin without an exchange. While this method is less secure, and we do not recommend it due to the risk of loss or theft, it remains a viable choice if you are willing to take the risk.
How Mailing Cash for Bitcoin Works
Here is a step-by-step guide on how mailing cash for Bitcoin works:
- Find a Trustworthy Reliable Seller: A reliable trader who is willing to exchange their Bitcoin for cash via mail. You can seek them on online marketplaces.
- Agree on the amount of Bitcoin you want to buy, the exchange rate (compare current prices of any cryptocurrency exchange), and the mailing address for sending cash.
- Package the cash properly to avoid theft or loss during transactions.
- Mail the cash to the address. Ensure you use a secure and trackable mailing way to send the cash.
- Verify Receipt: Once the seller receives the cash, they will transfer the corresponding Bitcoin to your wallet.
Pros
- Private: This way does not need sharing your personal information or interacting with cashiers like in retail stores.
- Lower Fees: Transaction fees may not be high compared to other platforms.
Cons
- Risk of Loss or Theft: Mailing cash for Bitcoin purchases is risky because your funds might get lost, or the seller might not be as trustworthy.
- Limited Recourse: If disputes arise, options for resolution may be limited.
- Inconvenience: The process can be complicated and time-consuming.
- Limitation: Difficult to seek sellers who can accept cash via mail for Bitcoin transit.
5. Depositing Cash Into Bank Account for Bitcoin Purchase
A more traditional way to buy Bitcoin with cash is depositing money into your bank account and utilizing electronic payment to purchase Bitcoin from any crypto exchange or wallet of your choice. Here is a guide on how depositing cash for Bitcoin works.
How Depositing Cash for Bitcoin Purchase Works
- Go to your bank branch to inform the bank teller that you need to deposit cash into your account. If you do not have an account, you can ask the bank to open one for you.
- Deposit Cash: Give the money to the bank teller, who will handle the payment, and the amount will be reflected in your account balance.
- Transit to Exchange: Download your preferred crypto exchange or wallet on your mobile device and deposit the money. Ensure the exchange allows fiat currency deposits in your local currency. If it does not, you can use P2P marketplaces to buy USDT and convert cash to Bitcoin.
- Buy Bitcoin: Now, you can purchase Bitcoin at the current market rate with the funds available on the exchange
Pros
- Security: This method is generally secure, as it involves traditional banking systems that are well-regulated.
- Familiarity: Many people are accustomed to using banks for transactions, making this approach straightforward.
- Higher Limits: Using a bank account often allows for higher daily transaction limits compared to other methods like Bitcoin ATMs or peer-to-peer exchanges.
Cons
- Identity Verification: Most exchanges require identity verification due to KYC regulations, which can involve offering your private information. Regardless, this will not be a problem if you are using no KYC crypto exchanges.
- Bank Policies: Some banks have restrictions or policies with cryptocurrency transactions, that could result in blocking or limiting accounts.
- Fees: Local banks, crypto exchanges, and crypto wallets charge fees for deposits and transfers, potentially increasing the cost of buying Bitcoin.
Conclusion
If you are looking to buy Bitcoin with cash, your choice will depend on what you value most. Bitcoin ATMs and P2P trading are great options if you prioritize security and convenience. On the flip side, mailing cash can offer more privacy, but it comes with less security. So, weigh your choice using our in-depth review in this article to find the option that best fits your needs.
FAQ
Is it Safe to Buy Bitcoin With Cash?
Buying Bitcoin with cash can be safe if you transact through trusted and secure methods. For instance, we do not recommend mailing cash for Bitcoin because it has higher risk compared to other methods.
How to Buy Bitcoins With Cash at Walmart?
Walmart does not directly sell Bitcoin, but you can use it to facilitate a cash-to-Bitcoin purchase through Coinstar kiosks. Here’s how to go about it:
- Download a cryptocurrency exchange or wallet.
- Find a participating Walmart with a Coinstar kiosk.
- Use the kiosk to exchange your cash for a Bitcoin voucher.
- Redeem the voucher online via Coinme to add Bitcoin to your digital wallet.
Bear in mind that each buy-in carries a fee of 4% and a cash exchange fee of 7%.
Are There Taxes Associated With Buying Bitcoin With Cash?
When buying Bitcoin with cash, you typically do not incur immediate tax liabilities. The Internal Revenue Service (IRS) does not consider the buying of cryptocurrency a taxable event. However, tax obligations come up when you sell, trade, or use Bitcoin in trades that generate capital gains.
