Since the release of the Bitcoin whitepaper and the successful launch of the network in 2009, many investors have made huge returns from investing in bitcoin.
On the other hand, prospective investors continue to wonder what fraction is the minimum bitcoin investment. In other words, new investors and traders who would like to make their first Bitcoin investment are always eager to know the minimum investment for Bitcoin.
The simplest answer is that there is no maximum or minimum Bitcoin investment since investors can purchase Bitcoin fractions.
What is a Fraction of Bitcoin?
Although 1 BTC trades at above $10,720 at the time of writing this article, an investor does not necessarily have to purchase a whole BTC. You can purchase the asset in small fractions, depending on your funds and risk appetite for the asset.
The smallest of Bitcoin which is called “satoshi” or “sat,” now appears in the Oxford English dictionary and is named after the anonymous creator of Bitcoin, Satoshi Nakamoto.
There are 100 million satoshis in 1 Bitcoin, so logically the minimum value of BTC one can invest in the asset would be 1 sat, represented as 0.00000001 BTC. Going by the current Bitcoin rate, 1 sats is equal to $0.00012. But you will agree the amount is so small and no crypto exchange service will be willing to make such a transaction.
In general, the minimum amount of Bitcoin one can buy varies among investors because there are many factors in play. What might be the minimum Bitcoin investment for John who lives in the UK, might not be the same for Rajat who resides in India where unclear regulation leaves many people still wondering if Bitcoin is a good investment asset.
Factors That Influence Your Minimum Bitcoin Investment
In this section, we’ll consider some of the factors that can influence the minimum investment in bitcoin you can add to your portfolio.
- Bitcoin Exchanges
This is the most significant because bitcoin exchanges usually set their minimum purchase prices of Bitcoin as they deem fit. However, despite the difference, the minimum investment for Bitcoin has been made affordable for all, with the price ranging from less than one cent to $2.
At the same time, though, it is worth noting that there is an increase in the number of fake bitcoin exchanges. Even the ones that were initially reliable suffer bankruptcy or hacks at some point, resulting in substantial losses for their users.
With that point in mind, we recommend that you only use trusted and reliable bitcoin exchanges. We listed some of them in the next section.
Where you reside can also affect your minimum bitcoin investment limit. The minimum amount of Bitcoin a trader can purchase in the United States is not the same for another investor that resides in Africa.
This is because not all exchanges have regulatory approval to operate in every part of the world. In the event when a particular exchange that offers the lowest Bitcoin purchase does not operate within a specific jurisdiction, investors would most likely look for other exchanges before they can buy the cryptocurrency.
Another fact what noting is that the minimum investment for bitcoin incurs a premium in countries where there are few bitcoin exchanges. In Cuba, for instance, a local bitcoin enthusiast noted that Bitcoin is sold at a 10% premium in the country.
- Transaction Fees
Despite lowering the barrier for a minimum investment in bitcoin, you must remember that purchases via a bitcoin exchange service will attract extra fees, and it differs based on the exchange and payment method you choose.
Some exchanges charge as high as 5% of your investment amount as fees, while some charge as low as 1%. Regardless, it’s advisable to compare the fees on exchanges to get the best rate. BitcoinPrice provides an excellent fee comparison article for bitcoin exchanges that accept U.S citizens.
- Know Your Customer and Anti-Money Laundering (KYC/AML) Requirements
Bitcoin exchanges are mandated by regulators to collect your personal information before they can allow you to buy bitcoin. For this reason, Every exchange out there has adopted a verification process that potentially affects the minimum investment for Bitcoin allowed for customers.
Since there is yet to be a universal KYC-standard for bitcoin exchanges, some of them still allow users to buy up to $100 worth of bitcoin without submitting personal information. However, this threshold is increased as soon as you provide KYC-data.
Typically, Bitcoin exchanges would require that you submit an identification document (Drivers License, Passport or National ID card) and a real-time selfie to prove your identity. For large purchases, you may also be required to provide a source-of-funds document.
Where Can I Buy Bitcoin With Fiat?
Having looked at the factors that determine minimum investment for bitcoin, it is essential to look at some of the platforms where you can buy Bitcoin.
Investors can purchase Bitcoin using bitcoin exchanges or peer-to-peer (P2P) trading platforms like Paxful. However, this article focuses mainly on exchange platforms because it is faster and safer for beginners compared to P2P sites.
Below is a list of some of the most popular and reliable bitcoin exchanges that offer affordable a lower threshold for prospective bitcoin investors.
Location: United States
Founded: June 2012
Coinbase is one of the oldest and trusted cryptocurrency exchanges. As at January 2020, a report by Long Hash showed that the exchange held roughly 1M BTC, a stack that highlights how much of the market Coinbase has captured in less than a decade.
Based in San Francisco, the exchange service allows customers to purchase Bitcoin for as low $25 and charges a fee of 1.49% for every transaction.
Coinbase provides a wide range of options for depositing fiat on the platform for investing in bitcoin. These include:
- Debit cards
- Bank Accounts (ACH)
- Wire Transfer (Large Investments)
In case you ever need to sell your bitcoins immediately, Coinbase also supports withdrawals to your PayPal account.
Founded: July 2017
Binance, the world’s largest exchange, is another platform that allows investors to buy Bitcoin with fiat currencies via different methods like bank transfer and credit/debit cards.
Binance is poised on fostering the mainstream adoption of cryptocurrencies, which has prompted the exchange to spread its operations across several parts of the world.
The minimum investment for Bitcoin an investor can purchase on the platform is 0.0001 BTC, which is equivalent to $1.19, at the time of writing this article. And the transaction fee for each BTC purchase is 1.4%.
Binance offers a wide range of deposit methods, including third-party payment gateways to support users in different jurisdictions. Available methods for a minimum investment in bitcoin include:
- Credit/Debit Card
- SEPA Deposits
Fiat Currencies Supported
EUR, RUB, TRY, NGN, UAH, KZT, INR, CAD, CHF, GEL, GHS, etc.
If you’re a U.S resident, note that the Binance.com is not legally available to users in your region. Instead, you can use Binance US, the United States version of Binance operated by Binance partner, BAM Trading.
Location: The United States/United Kingdom
Launched first in the United States, Gemini provides the lowest amount of Bitcoin purchases for its customers. The minimum bitcoin investment on the platform is 0.00001 BTC ($0.119). However, depending on the number of transactions, the exchange charges a fee of up to 1.49%.
In September 2020, Gemini announced it was launching in the UK after it received an e-money licence of the United Kingdom Financial Conduct Authority (FCA).
- Bank Transfer (ACH)
- Credit/Debit Cards
Gemini support withdrawals to U.S and UK bank accounts
Other Bitcoin exchanges that allow low minimum investment in bitcoin include:
We highly recommend that you check if a bitcoin exchange you intend to use is available for users in your region. A failure to verify this could result in a loss of funds.
In this article, we revealed there is really no minimum investment for bitcoin. An investor does not have to buy a whole Bitcoin before he or she can start investing in the digital asset. Since bitcoin is as divisible into 0.00000001 BTC, better known as 1 sats, one can hold as low as this amount.
However, each bitcoin exchange service has its policy that determines the lowest amount of BTC a user can purchase. This means that the minimum Bitcoin investment you can make depends on the terms of the vendor or exchanger you use. If you reside in the UK, take a look at this helpful guide from BitCourier.
We also provided a list of exchanges where you can buy bitcoin with fiat, and will lastly recommend that you still conduct market research to determine the exchange or P2P platform that offers the best price as you prepare to make your first minimum investment in bitcoin.
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