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Education

The Beginner’s Guide to Buying Bitcoin

John Light - Tuesday, June 13th, 2017

At the beginning of any journey into the world of bitcoin, one is faced with a daunting amount of information about this new technology and the economy forming around it. The team at Abra is in the unique position of being one of the first points of human contact on this journey, and so we are able to help many of our customers answer their beginner questions about bitcoin.

One question that often comes up is the question about what options are available for buying bitcoin. Abra is one of many options that are out there, so when should someone use Abra instead of the others? To answer this question, it is worth reviewing the options and seeing where Abra fits in.

Abra bitcoin wallet - Ultimate Guide to Buying Bitcoin - Payment methods and benefits comparison table

Where to buy

Exchanges

Bitcoin exchanges are companies that create a live market for buying and selling bitcoin. Customers will deposit bitcoin or fiat currency into their accounts and then place different order types that are recorded on an order book managed by the exchange. Some exchange offer simple limit orders, while others offer advanced order types such as stop loss orders and margin trading.

Having an account with a bitcoin exchange is like having a seat on the NYSE. Bitcoin exchanges are great for day traders and institutional traders who trade bitcoin full time. They often require an advanced knowledge of financial markets to use correctly.

Brokers

Bitcoin brokers are individuals and companies that take buy and sell orders and execute those orders on an exchange on behalf of their customers. The broker will often receive a fee for their service and the customer will receive the bitcoin they placed an order for in exchange.

If having an account at a bitcoin exchange is like having a seat at the NYSE, then doing business with a bitcoin broker is like having an e*Trade or Charles Schwab account. The advantage of using a broker is simplicity. The customer asks for a quote, places an order, and receives what they asked for, and the broker removes the complexity of dealing with an exchange.

OTC markets

Bitcoin OTC markets are “off-the-books” decentralized exchanges that occur through face-to-face meetings and remote trades. In a face-to-face exchange, the buyer and seller will meet at a designated time and place and exchange cash for bitcoin at an agreed-upon rate. In remote exchanges, the trade is coordinated by telephone, email, or another remote communication method. After a price is agreed upon between buyer and seller, the buyer will send an electronic funds transfer to the seller and the seller will send the bitcoin to the buyer’s bitcoin address.

OTC markets are most useful for either buying bitcoin with cash or purchasing large blocks of bitcoin at a guaranteed price. These trades protect against “slippage” that can occur when purchasing large amounts of bitcoin on an exchange.

How to pay

Every bitcoin buying service supports at least one method of payment for purchasing bitcoin, and each payment method comes with advantages and disadvantages. These payment methods are often chosen with these trade-offs in mind so that the experience for both buyer and seller is optimized for the smoothest possible trade.

Cash

Most commonly used by OTC traders, but some exchanges and brokerages also offer cash deposit funding methods.

  • Advantages: no chargeback risk; potentially faster and more private transactions
  • Disadvantages: depends on local liquidity i.e. cash-in locations where the buyer is located; transaction size can be limited due to security, liquidity, or regulatory issues; fees charged can be higher to offset the operational costs of dealing in cash

Bank wire

Widely used by OTC traders, exchanges, and brokerages.

  • Advantages: faster settlement time than ACH for domestic transfers; better for large transactions
  • Disadvantages: unfamiliar or poor user experience; can be expensive in some cases; international settlement can take a long time and involve additional foreign exchange costs and counterparty risk

ACH

Widely used by exchanges and brokerages.

  • Advantages: fast and cheap; better for smaller transactions
  • Disadvantages: unfamiliar user experience; long settlement period; chargeback risk leads to low transaction limits and more stringent KYC requirements

Credit card

Accepted by very few exchanges, always with a large markup.

  • Advantages: familiar user experience; ubiquitous adoption by consumers
  • Disadvantages: due to the insecurity of credit cards, chargeback risk is a big problem; due to chargeback risk, fees for using credit cards to buy bitcoin are very high

When to use Abra

Abra is a digital wallet that supports holding, sending, and receiving over 50 different currencies including bitcoin. Abra also facilitates buying and selling bitcoin with two payment methods: cash and bank transfers (ACH in the US, BillPay in the Philippines). Due to the limitations of the banking system, bank transfers have daily, weekly, and monthly transaction limits. For transactions that exceed these limits, customers are advised to either see if there is an Abra Teller in their area who can facilitate a larger cash transaction, or else find a suitable bitcoin exchange, brokerage, or OTC market that supports larger purchases using a bank account.

The best time to use Abra to buy bitcoin is when you want to buy an amount of bitcoin with your bank account that falls within our transaction limits, or when you want to buy bitcoin with cash from an Abra Teller in your area. We have Abra Tellers in over 170 cities, with over 1500 Tellers in the Philippines alone at the time of this writing, and this network is growing larger every day. We are also working to increase our bank transaction limits and expand the number of countries where we support bank transfers.

With any task, it’s important to use the best tool for the job so that you have the best outcome possible. Buying bitcoin is no different. We hope this guide helps you make an informed decision about when it is best to use Abra and when it makes sense to find a different solution so you can have the best experience possible when buying bitcoin.

Join our community and find more people achieving their financial goals through crypto.

Download the Abra app on Android or iOS to begin trading or earning interest on cryptocurrency today!

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Written by

John Light


About Abra

Established in 2014, Abra is on a mission to create a simple and honest platform that enables millions of cryptocurrency holders to maximize the potential of their assets. Abra enables both individuals and businesses to safely and securely buy, trade, and borrow against cryptocurrencies – all in one place. Abra’s vision is an open, global financial system that is easily accessible to everyone.

Why Abra

Based in the United States, Abra is available in over 150 countries and makes it easy to convert between crypto and a wide variety of local fiat currencies. With over 2MM customers, $7B in transactions processed, and $1.5B in assets under management, Abra continues to grow rapidly. Abra is widely loved and trusted – in April 2022, pymnts.com reviewed and rated Abra amongst the top 5 most popular crypto wallets in the market. Abra is backed by top-tier investors such as American Express Ventures and First Round Capital.

How Abra Protects Your Funds

Abra places clients’ financial objectives and security first. Abra practices a culture of risk management across all levels and functions within the organization.

Abra employs a state-of-the-art enterprise risk management framework that comprises a comprehensive set of policies, procedures, and practices detailing all applicable risk-related objectives and constraints for the entirety of the business. Abra has instituted a complete set of requisite systems and controls that continuously enforce these policies, procedures, and practices to manage all operations, including credit and lending. Abra’s independent Risk Committee comprises experienced compliance, risk, securities, and fraud operations professionals with backgrounds in industries ranging from traditional and digital assets banking, payments, remittance, to fintech.

Please visit our FAQ to learn more.

John Milner

1174 days ago

How do I purchase BTC with American Express? Can you please help me understand this?

Daniel McGlynn

1174 days ago

Hey John,

Have you checked out this page? https://www.abra.com/blog/fund-abra-wallet-with-american-express-card/.

If that doesn’t provide the info you need, please email [email protected] and they will help you out.

RJ

1929 days ago

Wanted to transfer to ABRA from coins.ph but is that really expensive to send BTC using coins.ph to ABRA?
Sending Php500 will cost a total of Php1,262.09, and that is even at the lowest fee. Would you guys suggest another practical way. Thank you in advance for your kind response.

Matt Taylor

1928 days ago

Hi RJ,

Yes mining fees on the Bitcoin network are sometimes high due to the increase in demand and adoption of Bitcoin. The best option is to wait a day or so while transactions are processed and fees come down. If you have further questions, please send us an email at [email protected].

Randy Craig

1944 days ago

I am a newbie so this may be dumb question but I want to know. When you say ABRA can only store Bitcoin is that referring to the Bitcoin or does it store all of the currencies that are listed under Bitcoin. BTC-ADA, BTC-BCC, BTC-ETC, etc.

Mel

1975 days ago

I live in an EU country where I can’t use my local bank account on Abra. I am from the US and have an account at a smaller regional bank there, and would like to use that account, but it is not on the list of Abra banks. How long and difficult would the process be allow me to use this bank?
Thanks!

Liz O'Donnell

1973 days ago

Hi Mel! We’re always working on ways to expand the set of banks available for our users. If your bank isn’t supported, you can always consider applying to our wire program – details here: https://support.abra.com/hc/en-us/articles/115002918627-What-are-Abra-s-transaction-limits-new-

If you have a US-based American Express card, that may also be an option for you: https://www.abra.com/blog/press-releases/can-now-fund-abra-wallet-american-express-card/

Sally

2017 days ago

How do I purchase BTC with American Express? I don’t see any option available for that….

Liz O'Donnell

2015 days ago

Hi Sally. If you have a US-based Amex card and don’t see the Amex option available to you, you can use the ‘Contact Us’ option within your Abra app to contact our support team for assistance. Thanks!

Jeff Beebe

2034 days ago

I’m trying to get bitcoin into my ABRA and JAXX account. Help!!

Max Dees

2033 days ago

Hey Jeff,

If you are running into any troubles using the app, feel free to send our support team a message at [email protected]. They’d love to help you get set up and start using Abra.

Best Regards,
Max

carl Steed

2036 days ago

Trying to start my account and my first funding is with an Amx. Card. I’m and old man and I need help

Max Dees

2033 days ago

Hey Carl,

If you’d like some help, please send an email to [email protected]. They can hop on a call with you and give you all the help you need.

Regards,
Max

Dennis

2038 days ago

Hello po. Mag ano po ang fee pag magcoconvert ng php to btc?

Max Dees

2028 days ago

Hey Dennis,

Abra does not charge fees when converting between currencies. That being said, Abra may make a small amount in the conversion process.

Thanks,
Max

Ron

2043 days ago

Hi If I am in Saudi Arabia but the account I am using is from the bank account Philippines. Is this possible? Can I use that account to add funds to my Abra account then buy bitcoins or any other crypto currencies?

Max Dees

2043 days ago

Hey Ron,

If the bank account is from the Philippines then you should have no trouble using this account. And yes, you can add the money into your Abra wallet and then convert it to Bitcoin. We would advise setting your ‘Wallet Currency’ to Bitcoin first, and then transferring the money into your account, so it will show up as Bitcoin.

Hope this helps,
Max

Dennis

2045 days ago

How do I buy other crypto currencies w/ BTC that is in my ABRA account?

Where do I find all of the crypto currencies that can be purchased w/ my ABRA account?

Liz O'Donnell

2043 days ago

Hi Dennis!
While bitcoin is the only crypto-currency that Abra supports, now that you have bitcoin, you can use it with any third-party service that accepts bitcoin as a payment method for buying other crypto-currencies.
One popular one is called Shapeshift.io
We’ve written before about how to fund your Abra wallet with alt currencies by using ShapeShift.
https://www.abra.com/blog/deposit-altcoins-abra-wallet-shapeshift/
It also works the other way around. You will have to use another wallet to store your non-bitcoin crypto currency.

june wheeler

2046 days ago

I do not use a smart phone…..will ABRA work with my computer?

Max Dees

2043 days ago

June,

Thanks for reaching out. Unfortunately, Abra is only on smart phones at this time.

Thanks,
Max

PickensMike

2047 days ago

I have fiat in my abra account. How can i convert this to bitcoin?

Max Dees

2046 days ago

Hey Mike,

Great question. To convert fiat into bitcoin, press the ‘menu’ icon on the top left of your Abra home page. Then, scroll down to ‘Wallet Currency’. Here, you can choose to convert your fiat into any of the supported currencies, including Bitcoin.

Regards,
Max

Tom Hu

2030 days ago

This is Tom Hu at [email protected]
Never mind my previous question. I found it in other section of QA.
Thanks

bob

2055 days ago

Can I use Abra to send bitcoin to another wallet outside Abra? If yes, how do I do that?

Max Dees

2055 days ago

Hey Bob,

Thanks for reaching out Bob. To send money to an external bitcoin wallet, press ‘Withdraw’ on the home screen, and then press ‘Use Bitcoin’. You will then be prompted to enter the Bitcoin address, or you can scan the external Bitcoin wallet’s QR code. Enter the amount you want to send, and press ‘Next’ in the top right hand corner. Press ‘Confirm Withdrawal’, and that’s it! You’ve sent your Bitcoin to an external wallet.

Regards,
Max

Bob

2055 days ago

Thank you, Max! Really appreciate it.

Aaron diaz

2059 days ago

I send Btc to my abra app but i did not recive it .

Max Dees

2057 days ago

Hey Aaron,

Please send an email to our Support team at [email protected] explaining your problem, and they should be able to help you out.

Regards,
Max

Abra's global money transfer app is featured on Apple Music's Planet of the Apps! - Abra

2063 days ago

[…] Propagate (the producers of the show), who made the experience so much fun. A couple of them even bought bitcoin because of Abra and our talks in between shoots! Special shoutout to the other founders from […]

Marvin Gove

2067 days ago

Marvin Gove
Jul 27, 10:22 AM PDT.
My wife and I opened a new joint checking account with Chase bank with on-line banking profiles.
I was able to fund Coinbase from this account, so ACH transfer mechanism works.
I went to Abra and setup the new bank account (Chase). This was verified and accepted by Abra.
Then tried to fund my Abra wallet from the new Chase account and got the response
…”Ooops, an unexpected error has occurred. Please try again.”
I contacted Abra support group, but they don’t seem able or willing to help me. Buying BTC at Abra with an approved bank ( Chase, for instance) is supposedly a working option with Abra.
Any body have any suggestions?

Max Dees

2067 days ago

Hi Marvin,

Thank you for following up.

Unfortunately this is a side-effect of how insecure the legacy banking system is. Our banking partner or our security protocols do not give customers any additional information about why a transaction is canceled because they don’t want to make it easier for illegitimate users to game the system. We wish we could provide more information to our customers in these cases so they can understand what went wrong but in these cases it’s not safe to do so.
For what it’s worth, this is standard practice across the financial services industry.

We do have other funding alternatives – tellers, American Express, payments via other users, or bitcoin deposits.

We sincerely do apologize that bank integration does not work for your Abra wallet and the inconveniences you’ve experienced,
Max

Jean Dudley

2080 days ago

I was given a code which was sent to my iPhone. Then I entered a Pin. Wells Fargo requires another level of security, so I was sent another code to an old phone number. I haven’t been able to get past this spot because I don’t know the old phone number. How can I resolve this?

Liz O'Donnell

2077 days ago

Hi Jean, if I understand correctly, you may need to update your phone number with Wells Fargo. If that’s not the case, please have a look at this FAQ:
https://abra.zendesk.com/hc/en-us/articles/115005347068-I-m-unable-to-add-my-US-bank-account
or you may contact our support team at any time: support[at]abra.com

Joel

2081 days ago

With Abra enabling people to convert to and from fiat currency and bitcoin as well as with Abra’s underlying technology making use of bitcoin under the hood, will we be expecting any service disruption on August 1st with Abra (noting that there might be a potential disruption with the bitcoin network at that time)?

Crypto_IPSec

2078 days ago

same question! please answer this inquiry. Im concerned as well

Liz O'Donnell

2077 days ago

We are monitoring developments but are not committing to any particular strategy until we have more clarity on what the likely outcome of the situation will be. Rest assured that giving our customers the best possible tools to protect their funds is our number one priority.

As Abra transactions take place on the bitcoin blockchain, any service impact to the bitcoin network would likely impact Abra as well.

Using Abra to buy bitcoin in the Philippines - Abra

2082 days ago

[…] https://www.goabra.com/blog/beginners-guide-buying-bitcoin/ […]

Anh Tuan Tran

2084 days ago

I would like to know how much ABRA deposit limit is 1 day

John Light

2084 days ago

Hi Anh, you can find our current limits on our FAQ page here: https://abra.zendesk.com/hc/en-us/articles/115002918627-What-are-Abra-s-transaction-limits-new-

Arthur Whitehead

2106 days ago

Wells Fargo holds an account that I can not link to my Abra account. I would like to buy one I can not get past the recovery phrase page. I have a small Wells Fargo Bank account in Denver, Co. that I would like to link to my Abra account. Apparently, I am doing something wrong With the money that I transfer into Abra some USD and then I would like to buy a Bitcoin and keep it at Abra. Can you tell me specifically how I can do this?

John Light

2105 days ago

Hi Arthur, thanks for your interest! This is a question that our customer support team will be happy to help you with. Please press the “Contact us” button in the main menu of the app to create a support ticket, otherwise you can submit a new support ticket here: https://abra.zendesk.com/hc/en-us/requests/new

Arlen Cannon

1961 days ago

I’m having trouble with Wells Fargo too. Been trying for 2 weeks and all I got from WF was “no account capable of ACH transfer”. Since I have some bills paid that way each month I know that is not true. Last I got was a woman saying she would send email instructions on how to set up money transfer. That would take 2 to 3 days. Now it seems it would be easier to move to another bank and start over.

Liz O'Donnell

1955 days ago

Hi Arlen, for account-specific issues, please contact our support team.

george blossom

2109 days ago

i have some eth on coinbase. should I transer to ABRA & how

John Light

2106 days ago

Hi George, the choice to convert your ETH to BTC and transfer it to your Abra app is entirely yours! If you want to, then first you need to convert your ETH into BTC in Coinbase, then send the BTC to the bitcoin address on the “Add money” screen of your Abra wallet. You can find instructions for sending bitcoin from your Coinbase account to an external bitcoin wallet (in this case, your Abra wallet) here: https://support.coinbase.com/customer/en/portal/articles/971437-how-do-i-send-digital-currency-

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