You already know that it’s possible to buy Bitcoin (BTC) with your credit card, debit card, and various Ewallet methods. But did you know it’s also possible to buy Bitcoin, and all cryptocurrency, directly with cash? It’s an unusual thought, perhaps because crypto is so firmly seen as a digital asset. But, as with virtually every tradable commodity, you can also just make a cash purchase.
We’ll take a look in this crypto guide at how digital assets can be a cash purchase. There are upwards of 20 methods that allow for a cash-based Bitcoin purchase, and some will be covered here. If you prefer a different purchase method, you’ll find it covered in one of our other crypto guides.
For now let’s jump in, take a closer look, give a few step-by-step examples, and learn how to buy Bitcoin with cash.
Despite what some traders might think, buying cryptocurrency with cash doesn’t necessarily mean having to meet another trader in person. There are several ways to make a cash transaction that don’t require a personal meeting.
First of all, like most traders, you probably don’t do something unless it comes with benefits. So, what are the benefits of cash-based cryptocurrency transactions? There are a few, and many of the benefits are big enough that some traders insist on only making cash transactions.
You are probably already aware that traditional banks charge fees for just about every transaction. These superfluous bank fees are amongst the main reasons that a move is being seen towards decentralised currencies. But what if you could simply avoid the fees entirely? You can, assuming that you make a transaction directly with cash, thereby cutting out the banking system entirely. If you learn how to buy Bitcoin with cash you’re sidestepping bank fees simply by not using the system. There will be no transaction fees and no withdrawal fees.
Along with charging transaction fees, banks also put limitations on transactions. These limits do serve a purpose, mainly regarding safety and security, but can also be a major annoyance. If you want to make a transaction above a certain value, you simply can’t. This ultimately results in having to make multiple transactions, each of which is charged additional fees. Buy Bitcoin with cash and you sidestep not only the fees but also the infuriating limitations. Though, if you decide to use a Bitcoin ATM there will still be limitations and fees.
Some traders assume that buying a cryptocurrency with cash is dangerous. But in many cases, it can be far more secure than transacting online. There is no denying it, cyberspace can be a dangerous place. With scammers getting ever more sophisticated, it can be tricky to avoid scams. But if you buy Bitcoin with cash the transaction is much more personal and by extension much less likely to be a scam.
Lastly, many traders prefer cryptocurrency because they believe it is a more anonymous way to do business. But with increasing regulations, deeper interference from authorities, and more crypto exchanges being centralised, crypto anonymity is more unlikely than it’s ever been. Unless, of course, you transact directly in cash. Simply put, there is no better way to avoid leaving a digital footprint than simply making direct cash transactions.
When we write a crypto guide we take a balanced, unbiased approach. Yes, there are obvious advantages to cash transactions, but also several negatives.
Let’s take a look at the negatives now so that you’re fully aware of what you’re getting into. You should also always keep up to date with the latest crypto news to keep aware of the crypto-sphere in general.
Most traders are so familiar with the convenience of online transactions that they’ve forgotten what is involved in trading with cash. The first, and biggest drawback when buying cryptocurrency with cash is having to transport large sums of money. Physical cash is bulky, and it is also an obvious security risk. How you decide to transport your cash is up to you, but we recommend taking a few very serious precautionary measures. There are several portable safes and other safe storage devices readily available.
If you’re meeting an independent agent that happens to be nearby, or travelling to a Bitcoin ATM in your area, obviously the challenges of time and distance are minimised. But what if you decide to trade with someone that demands a long-distance commute? Not only is long-distance travel expensive, but it can also be inconvenient. At the point that you’re having to pay travel fees, you might ultimately just consider that bank transaction fees aren’t so bad after all.
Even if you decide to buy Bitcoin with cash, you’re still going to have to arrange a trade. This means heading to an exchange that supports direct cash transactions. The most popular exchanges in this regard are:
If you want an in-depth review of any of these exchanges check out a different crypto guide.
Let’s deal with the cash-in-person method first, given that it tends to make traders the most uneasy. Before we get started, keep in mind that it is essential to arrange this sort of transaction at an official exchange. It is extremely ill-advised to arrange a cash-in-person transaction anywhere that isn’t going to keep a record of the arrangement.
You can’t do much at an exchange without registering first. Head to your chosen exchange and complete the registration process. Depending on which exchange you’ve chosen the registration process will vary, perhaps requiring that you complete the KYC (Know Your Client) process. If you need to complete KYC you will have to provide a validated identification document. If you have this document close at hand KYC will go much faster. Some exchanges don’t require the KYC process if you’d prefer to remain anonymous.
Either way, completing registration will require that you provide a username and email address.
If you’re looking to sell Bitcoin for cash you’re going to have to post an offer. This will require providing the details of your proposed trade in detail. Note that you can set the terms of the trade as you see fit, including any rates, percentages above or below market price, or other specific requirements. Most exchanges allow you to provide any other details that you’d like to include.
If you’re looking to buy Bitcoin for cash you can browse offers already available. You can also post an offer to purchase with specific details and requirements.
In either case, it’s important to specify details such as your area, city name and the hours you’ll be available to make the trade. Also, be sure to indicate that the payment method is going to be an in-person cash transaction.
The reason that it’s so important to arrange cash transactions at exchanges is because the platform keeps track of individuals. If buyers and sellers transact often at the exchange they’ll get a traceable reputation. The exchange will inform you of the trader’s history, how many deals they’ve dealt with in the past and, more importantly, if they’re trustworthy.
Before agreeing to any cryptocurrency deals be certain to explore each potential trade partner’s history. You will also be able to communicate with the trader directly. It is highly recommended that you converse with a trader to get a better idea of who they are.
Once you decide to accept a deal you’ll need to arrange the trade. At this point, you can choose to make the trade in person, or you can arrange to have an independent agent do it for you. An independent agent will, of course, have to be paid. But most independent agents are also professional and greatly reduce any risks.
Either way, arrange the trade in a public place and insist that the trader generate a payment receipt. Any trader trying to avoid making a receipt is not trustworthy. Keep in mind that the Bitcoin up for trade is held at that exchange platform. If the correct steps aren’t taken, such as receipts not being generated, the platform won’t even release the Bitcoin for the trade.
Remember that it is your sole responsibility to take all necessary steps that minimise risk.
All that is left now is to conclude the deal. If you decide to do the transaction in person it’s a good idea to ask a friend to go with you, or at least keep friends in the loop about what you’re doing. If you use an independent agent be sure to stay in direct contact.
If in-person transactions concern you there is always the cash ATM option. A drawback here is that Bitcoin ATMs are currently not widespread. Although they are being seen more frequently in many countries around the world, you still may not live near an ATM. Keep in mind that the same steps listed here also apply to buying from physical retailers, kiosks, and other similar Bitcoin and cryptocurrency outlets.
Another drawback with an ATM is that there will be a $1000 purchase limit and a 1% merchant fee will apply. Take a look at a different crypto guide for a full explanation of how cryptocurrency ATMs work.
You’ll first have to download the Bitcoin ATM app and register for an account. Registering to use an ATM is the same as signing up to use an exchange. You’ll have to provide a few personal details, as well as a verified email address. The whole process shouldn’t take more than a few minutes.
The app will helpfully show you the location of your nearest ATM. Again, depending on where you are the nearest ATM may require a commute. If the ATM is a long commute be sure to take into account the challenges of travelling with cash.
Once you’ve decided on an ATM tap on it and you can arrange the transaction in advance if you want. Once you’ve specified the details of the purchase the ATM will register the order and wait for your arrival. In making the order you can choose to have the Bitcoin transferred to a digital wallet or can have it paid out on printed paper. If you decide to have the cryptocurrency paid out physically you will receive a paper with printed keys.
Once you arrive at the ATM you can scan the machine’s QR code with your phone. The QR code will provide the ATM’s wallet address. You will also have to scan your fingerprint for verification purposes. You can now make the cash deposit and have the Bitcoin paid out. You’ll also be given a receipt for the transaction. Keep in mind that you can make several other transactions at an ATM, including selling or trading.
You can purchase Bitcoin directly with in-person trades, at ATMs, at kiosks and retailers, or with cash-in-mail transactions. If you do any in-person transactions initiate the trade through an official exchange.
There are currently around 38,000 crypto ATMs around the world, with more being added regularly. Most of the ATMs are in the United States. You can check if there is an ATM near you by downloading an app and doing a quick check.
There are obvious risks of making cash trades in person. If you arrange the trade through an official exchange and take the necessary precautions risks are greatly reduced. You can arrange to have an independent agent make the trade on your behalf.
