How to Buy Bitcoin on Coinbase

There are many ways to purchase Bitcoin today, as I outlined in my article Your First Bitcoin (How and Where To Buy It). I mentioned there that I often set up my friends with a “starter pack” of what I think are the two most accessible platforms for purchasing and trading crypto. Coinbase, for purchases and Binance for trades.

In this article, I’ll give you a step-by-step guide for exactly what to do and expect when purchasing Bitcoin on Coinbase.

In a nutshell, here is what we will be doing:

  • Creating a new account
  • Verifying your identity
  • Adding a payment method
  • Making your purchase
  • (optional) Withdrawing your Bitcoin to a wallet or exchange

What you’ll need:

  • An email address
  • A phone number that can receive an SMS (Google Voice seems to work)
  • Your passport or other ID (possibly depending on your country/state of residence)

1. Creating Your Account

First things first, you’ll need to sign up else. I highly recommend using a referral link to sign up, as you and your referrer will both receive a free $10 of Bitcoin after your first purchase of at least $100. My referral link is and I would be grateful if you used it, but of course you can also get a link and the same deal from any friend you might have who already has a Coinbase account.

2. Verifying Your Identity

The signup process for Coinbase is fairly intuitive, though it has changed several times and may vary according to your geographical location.

Some people find the number of steps involved annoying, which is understandable. You will probably have to verify your email, a phone number (by receiving an SMS code), and possibly even show your passport via webcam before you can start your purchase. While this can be a little tedious, Coinbase’s interface keeps it simple and friendly, and it appears they’re doing everything they can to keep your account secure.

3. Adding a Payment Method

You have a few different options for buying on Coinbase. You can use a debit card, bank transfer, or wire transfer. (Previously credit card purchases were also possible, but despite the fact that this is still true according to Coinbase’s help pages, it’s currently not possible to add a credit card as a payment method.)

Each of these options has pros and cons, in terms of the fee and the amount of time it takes for your purchase to be completed.

Debit card purchases are the fastest. As soon as you pay with your card, you will instantly have the Bitcoin in your account. However, debit cards also come with the highest fee. This method is probably good for someone who is thinking about trading their Bitcoin, rather than investing and holding it for the long-term.

Bank transfers have lower fees, but it takes about five days before you receive your Bitcoin. This may not be a big deal if you have no intention to sell/trade/use your coins. If you do want to trade, though, it could be a brutal wait if you see prices on the move. There’s a chance that any trading opportunity you find may be gone by the time your coins have arrived in your account. Bank transfers could be a good idea for the person who might want to purchase Bitcoin regularly over time, to dollar cost average their purchases (although there is an even better method for this which I’ll talk about in another article).

Wire transfers are also accepted, but this is probably not too interesting for most customers. You’ll have to go through a number of extra verifications, and additionally you can’t use wire transfers to directly buy Bitcoin, but only to deposit USD into your Coinbase account, which you can then select as a payment method.

4. Making Your Purchase

Once you’ve added a payment method (and, probably, uploaded your passport/ID) you’ll be able to make a purchase. Again the website/app are quite user-friendly and intuitive. But before we press the “buy” button let’s have a closer look at:

Coinbase Fees: Debit Card vs. Bank Transfer

You can find a list of all of Coinbase’s fee, by payment method and by country, here.

Unfortunately it’s not completely accurate. The numbers that I see when I begin to make a purchase simply do not match the theoretical numbers on that page. Sometimes the fee is cheaper, and sometimes (yeah, almost always) it’s more expensive.

So let’s take a look at what the effective fee would be for a few different purchases.

$100 Purchase: Debit Card vs. Bank Transfer

Here’s what a $100 Bitcoin purchase with my Charles Schwab debit card would look like:

$100 for 0.0154 BTC when paying by debit card

And here’s the same purchase using a bank transfer from my Capital One account:

$100 for 0.0156 BTC when paying with a bank transfer

As expected, it’s cheaper to buy with the bank transfer. It’s not a huge difference — the fee is $3.84 with debit card and $2.99 with bank transfer, only 85 cents extra. I end up with an additional 0.0002 BTC by selecting bank transfer in this case, or about 1.2% extra.

If I’m looking to sell or trade that BTC soon, I probably don’t care about the 1.2% too much, as it’s likely that prices will change by more than that amount in the five days it will take for my Bitcoin to arrive if I pay by bank transfer. That reduced waiting time is worth the extra 85 cents to me.

$1000 Purchase: Debit Card vs. Bank Transfer

Let’s see what happens if we add a zero and buy $1000 of Bitcoin instead.

With debit card:

$1000 for 0.1541 BTC when paying with debit card

And with bank transfer:

The difference in fees is more significant here. The debit card fee is $38.37, but the bank transfer fee is only $14.68 — less than half! I would save $23.69 by choosing to pay with a bank transfer in this case.

By using my debit card, I would receive 0.1541 BTC, and by using bank transfer 0.1578, a difference of 0.0037 BTC, or 2.4%. Twice as big a difference as it was for our $100 purchase! While it’s still true that prices may move more than 2.4% in the five days it takes my Bitcoin to arrive, an extra 2.4% is pretty hard to swallow. In this case I would be pretty reluctant to pay by debit card.

At least for your first purchase, the free $10 that you get from using a referral link helps to counteract the Coinbase fee. In particular if you’re buying ~$100 it may be worth more than the entire fee, so you’ll receive your Bitcoin for cheaper than the market rate.

5. Withdrawing your Bitcoin (optional)

Once you’ve determined the best method for your personal needs, based on fees and wait time, and gone ahead and clicked the “Buy Bitcoin” button, you are now the proud owner of some amount of BTC. Congratulations!

So what can you do now? You can leave your BTC in your Coinbase wallet if you want, but I don’t recommend it. You can also sell it on Coinbase, but there are better places to do that with lower fees (article coming soon). I recommend moving your BTC elsewhere: either to a wallet (if you want to hold it) or to an exchange (if you want to trade).