How to Buy Bitcoin Without Getting Ripped Off

By | Oct 11, 2017
buying Bitcoin
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A Fast Strategy for Good Decisions in the Bitcoin Market Space

When you are planning to buy Bitcoin, looking at Bitcoin prices on different exchanges you often see price differences as much as $200 per coin. And this only gets worse. A lot of the volatility is driven by false bad news, with the real good news often being ignored. They quote low prices, thus driving down the price of Bitcoin, because of panic-selling… People deciding to cut their losses. Usually inexperienced traders or merchants, and even investment banks or hedge funds trying to make fast profit or quickly stop losses.

I’ve a feeling that some exchanges, where you appear to be trading with individual investors, have their own employed bank of traders dealing for them. Don’t you have that feeling?

Sure, the trade you make appears to be coming or going from an individual’s particular account. But how many of those accounts actually belong to the exchange they work for? Maybe I just have a crooked mind, but if someone or some business can get away with something and make profit, they will usually do so. And clearly, they can get away with it. It is not against the law to do it in most places, because cryptocurrency exchanges are largely unregulated, something that the US and China are currently changing for their territories.

bitcoin-crooks

bitcoin-crooks

But when traders, merchants,  investment banks or hedge funds buy or sell they discover a huge margin at the platform between buying and selling prices. That margin can be as much as $400. In day-trading, that could be a 10% margin, which people would never go for.

So, selling, they end up having to sell for perhaps 10% less than the quoted price… Buying, they have to pay 10% or so more than the quoted price, (where platforms use a mid-range price for their quotes). I’ve got to make an exception here. Luno seems particularly good. But you have to make your deposit before buying. So at any one time they’ll have $millions to gain interest on. It’s a good strategy—play fair, but still make lots of profit.

So How to Buy Bitcoin Without Getting Ripped Off! (Like the Title says…)

A best way forward, then, for individuals, is to get yourself level-three verified on as many viable platforms with high-reputation and a long-term trading history as you possibly can. Deposit a little money or crypto-currency with each platform and see how long it takes for your transfer to be verified. Then try withdrawing, buying some crypto, or transferring some of your deposit, and see how long that takes. And try contacting customer service. See how long it takes them to come back to you, and see if you get a good answer to your enquiry or just a generic one that points you somewhere else to find the answer.

You will gradually narrow down the platforms that it is good to deal with. In the process you will discover platforms that take initial test deposits and show them in your account quickly, but take days to verify larger deposits. I deal with those platforms only once, then spend my balance and effectively get out.

Use a Spreadsheet

Spreadsheet on laptop

Spreadsheet on laptop

It’s a good idea to keep a spreadsheet that allows you to assess platform/exchange performance at a glance. You can sort the spreadsheet for response time, both for buying and selling, value for money, and an overall score that you give them, as well as having their website address accessible with an easy click. But as I’ve said before, keep your usernames and passwords and secret keys offline in a hardware wallet, a USB drive, or written on paper. All of the latter are, combined, good options, because things can go wrong. You’d be really, really stupid to put your Trezor through a washing machine cycle, but it would be easier to do that with a small USB drive, or a slip of paper.

As for paper, you could write with permanent marker on a small banknote. That should survive a washing machine. But a USB drive would almost certainly be wiped.

At least with theTrezor you’d have your 24 word recovery phrase kept safe somewhere, wouldn’t you? Wouldn’t you!!!!!!?

Given all that, you now have a variety of platforms to choose from when you are looking to buy or sell. You can choose the best prices, fastest deliveries and or most reliable service, depending on your priorities at the time.

Thus also, when trading, you can look amongst your chosen platforms for the best deals available.

Don’t Wait Too Long to buy Bitcoin

It’s pointless waiting until you want to buy into, say, an ICO before deciding you need to get verified at a particular platform, because by the time you go through the process, you can be too late. Especially if you just found out about something that is closing its token-sale in a few hours.

Disclaimer: I’m not a registered financial advisor, so my suggestions are just suggestions. I could suggest that you go to Mars. You’d be a fool to take that advice. But I do my best to help people with knowledge of cryptocurrencies, and by exposing some of the cons and frauds that go on. As always, don’t invest more than you can afford to lose completely. You don’t want to end up living on the street selling the Big Issue, do you? Not that I’m saying that is a bad thing. I’m just suggesting that it’s not perhaps what you have planned for your life.