—TechRound does not recommend or endorse any financial, investment, trading, or cryptocurrency or other advice and practices. All articles are purely informational—
When you think of getting your hands on Bitcoin, your first thought is probably buying it with a daily method like a bank card. Of course, this is far from the only way to get BTC. Did you know the difference between buying and earning crypto can affect your costs, taxes and how your holdings grow over time? Buying gives you Bitcoin right away, while earning might better match your skills and available time.
Understanding Traditional Buying Methods
Using Cards to Buy Bitcoin (BTC)
Using a card to purchase Bitcoin for many can be the easiest way in which to buy it. It allows you to buy Bitcoin immediately without needing much technical knowledge. Card purchases have become easier, with platforms like Coinbase, Binance, and BlockFi offering card payment systems that complete purchases in minutes.
This convenience is advertised toward beginners for a reason. Someone can go from knowing nothing about crypto to owning Bitcoin in less than 30 minutes with a card purchase. Many new users choose platforms based on whether they can buy Bitcoin with a Visa card.
Card purchases may for some, also work well for buying regularly over time. Investors may set up weekly or monthly purchases to build their Bitcoin gradually. Several platforms now offer automatic purchasing features that make this process simple once set up.
Fee Structures and Hidden Costs When Buying Bitcoin
Even though card purchases are often talked about as being one of the easiest ways to get Bitcoin, it is not always the cheapest. Card fees can range from 3–5% per transaction, while bank transfers, which are slower, may charge less than 1%. A $1,000 purchase of BTC for example might cost an extra £30–50 in fees.
Debit and credit cards treat these transactions differently, too. Credit card issuers can treat crypto purchases as cash advances, which adds more fees plus immediate interest charges. Not knowing this, you could find out you paid 5% more only after purchasing.
Markups on exchange rates serve as another unstated expense. In addition to their stated costs, many platforms add a spread to the exchange rate when you purchase Bitcoin using a credit or debit card. Usually, these spreads fall between 0.5 and 1.5%. Card transactions can cost 5–10% more than the actual worth of the Bitcoin you’re purchasing when you include in exchange spreads, card fees, and potential cash advance costs.
Other Traditional Buying Methods Beyond Cards
Although using a Visa card to purchase Bitcoin is preferred by many, there are less expensive alternatives if you can wait a little while. While the process may take one to three business days to complete, bank transfers made via ACH or SEPA typically lower rates to 0.5–1.5%.
Larger purchases may benefit from wire transfers, and several exchanges waive or reduce fees for transfers over a specific threshold. These transactions usually complete within one business day.
Bitcoin may now be simply purchased through mobile payment apps like PayPal and Cash App. While allowing you to use well-known apps, these services usually levy fees in the middle of bank transfers and card payments. A lot of consumers choose to purchase Bitcoin using apps that are already installed on their phones.
Earning Methods as Alternative Acquisition Strategies
Credit and debit cards that offer Bitcoin rewards have for some, become popular alternatives to directly buying Bitcoin with a Visa card.
Instead of giving you typical cash back, cards like the Coinbase Card and BlockFi Bitcoin Rewards Card automatically send you Bitcoin. Users basically obtain cryptocurrency at a “discount” through regular purchasing, generally earning 1% to 3% back in Bitcoin on regular transactions.
When you shop at partnered retailer and stores, you may earn Bitcoin cashback using browser add-ons like Fold and Lolli. Depending on the store, these services give Bitcoin incentives ranging from 1 to 30%. They collaborate with thousands of retailers. For online shoppers, these platforms reduce the effective cost of getting Bitcoin compared to buying it directly.
Many crypto exchanges now offer interest-bearing accounts, with rates from 3-8% annually for Bitcoin. Instead of repeatedly buying Bitcoin with a Visa card, some investors buy once and then earn additional crypto through these interest opportunities.
Work and Service Opportunities to Earn Bitcoin
With businesses increasingly providing Bitcoin payment choices for full-time jobs, freelance work, and consulting, the crypto job market has expanded significantly.
The highest paying jobs may be technical ones like programming, but there are also opportunities in marketing, design, customer support, and content production.
There are now freelance websites specialising in cryptocurrency payments. Freelancers and clients ready to pay in Bitcoin are connected by websites such as Cryptocurrency Jobs, Cryptogrind and LaborX. These sites provide options to earn Bitcoin for anyone with marketable abilities without having to pay fees to purchase Bitcoin using a Visa card.
Content creation through crypto-friendly platforms is another earning path. Services like Substack, Twitter tips, and YouTube channels with Bitcoin tips allow creators to receive cryptocurrency directly from their audience. Some creators earn a good portion of their income this way.
Cost of Buying vs Earning Bitcoin
The actual cost varies greatly between buying and earning Bitcoin. When you buy Bitcoin with a Visa card, the cost is clear but high; the market price plus 3-5% in fees. In contrast, earning Bitcoin through rewards programmes may effectively discounts your cost by tying it to purchases you would make anyway.
Job and service-based earning methods typically have the lowest effective costs. For someone already working in a relevant field, earning Bitcoin as payment could avoid the fees associated with buying Bitcoin with a card.
The time factor is important too. Buying gives you Bitcoin immediately, while earning methods accumulate Bitcoin more gradually. For investors worried about missing price increases, the immediate nature of buying may outweigh the higher costs.
Tax Implications for Different Acquisition Methods
This will depend on which country and jurisdiction you are operating in and you should ensure you adhere to local crypto, financial and tax laws.
Taxes work differently for buying versus earning strategies. When you buy Bitcoin with a Visa card, you establish a starting point for calculating taxes when you eventually sell. The entire price increase becomes taxable.
In contrast, Bitcoin earned through work may be treated as regular income when you receive it. This creates an immediate tax bill but potentially lower taxes later if the Bitcoin increases in value after you receive it.
Rewards and cashback Bitcoin typically follow similar tax rules as traditional rewards programs. In some countries, these rewards aren’t taxable until sold, while others treat them as income right away. The changing nature of tax rules for crypto rewards makes talking to a tax professional particularly important.
Different Strategies For Different People
Different acquisition methods can work better for different people.
Those with more money than time might prefer to simply buy Bitcoin with a Visa card despite the higher fees. The convenience and immediate ownership make sense for their situation.
People with valuable skills but limited investment funds might focus on earning opportunities. A developer, writer, or designer can leverage their professional abilities to earn Bitcoin at effectively lower rates than buying directly.
Some successful Bitcoin collectors use a combination of buying and earning methods. This balanced approach leverages the strengths of each strategy while minimising the drawbacks of relying on just one method.
The choice between buying and earning Bitcoin isn’t either/or; many potentially successful strategies include both. While buying Bitcoin with a Visa card offers immediate ownership and simplicity, earning provides ways to get Bitcoin at lower effective costs and often with tax benefits.
Your circumstances, including available funds, time, talents, and financial objectives, will determine the optimal ratio between these strategies. By being aware of all of your alternatives, you can create a customized plan that will enable you to increase your Bitcoin holdings effectively while minimising expenses and taxes.
There will probably be even more creative ways to make money instead of purchasing Bitcoin as the cryptocurrency market expands. Over time, you may effectively strengthen your bitcoin position by keeping up with these fresh prospects.
Is it Better to Buy Bitcoin or Earn it Through Rewards Programmes?
Generally speaking, earning Bitcoin through rewards programmes is less expensive than using a Visa card to make a purchase. While rewards programmes award you Bitcoin depending on your regular spending, card purchases typically incur fees of 3–5%. Earning Bitcoin builds more slowly, though, which might be a drawback while prices are rising.
What’s The Fastest Way to Get Bitcoin?
The quickest way to purchase Bitcoin is using a Visa or other payment card; transactions usually take only a few minutes. Bitcoin is accumulated more gradually but frequently at a reduced effective cost through earning strategies like employment, rewards schemes, and interest.
Are There Tax Advantages to Earning Over Buying Bitcoin?
Each jurisdiction and each earning strategy has different tax ramifications. While purchasing and selling always results in taxable events, some cryptocurrency incentives might not be taxed right away. However, when Bitcoin is gained through employment, it is usually taxed like regular income, which could lead to greater immediate taxes than if it were purchased.
—TechRound does not recommend or endorse any financial, investment, trading, or cryptocurrency or other advice and practices. All articles are purely informational—
