The crypto markets changed a lot over the past years. The original version of this guide was written in January 2017. Back then everyone traded at Poloniex and liquid altcoin-fiat markets didn’t exist yet.
Now they do, which makes it is easier to onramp into any crypto of your choice.
Which the regulators noticed and so a new set of issues came about.
We have rewritten this article to explain the different onramping routes, comparing their pros and cons.
Contents
- How to buy any altcoin of your choice
- Where to buy altcoins for fiat with KYC
- Where to buy altcoins for fiat anonymously (no KYC)
- Where to trade small-cap altcoins for other crypto
- Americans: Where to buy and trade crypto
How to buy any cryptocurrency of your choice
Wherever you are based, the idea is always the same: Once you have bought some crypto, you will be able to exchange it for the cryptocurrency you actually want to buy.
That’s why buying large-cap cryptocurrencies is sometimes called onramping.
They are your gateway to small-cap altcoins, DeFi tokens, crypto derivative trading, staking and yield farming.
There are ways to onramp from fiat to crypto even if you are American, and even if you don’t want to do KYC, for absolutely whatever reason.
You pretty much only need to decide where to buy your initial gateway cryptocurrency and where to trade it further, if that’s what you want.
To choose where to buy your initial cryptocurrency, a good way is to go with a way that is local to your payment method: Same country for cash, same banking network for big exchanges, same e-wallet for p2p.
Buy Altcoins for Fiat with KYC (buy on big exchanges)
- Bitfinex - USD, EUR, GBP, JPY, CNH
- FTX US - USD^new
- Independent Reserve - USD, SGD, AUD, NZD
- Coinbase - US/EU
- Kraken - US/EU
- Bitstamp - EU
Bitfinex
- Accepts EU, parts of US and most of the world (SEPA, wire)
- Banks in Who knows. Company resides in British Virgin Islands.
- Altcoins Plenty!
- Experience
PROS
The Bitfinex trading interface has no contender, both in desktop app and on smartphones.
The mobile app has configurable permissions, so you can allow only the lending functionality for instance - in case you are worried about your phone’s security. More here
The exchange offers spot trading, leveraged trading, OTC, margin funding and derivatives exchange. Fees are low and get lower with traded volume.
Verification is not required but you will need the full verification to purchase for fiat.
About Bitfinex Bitfinex 6% Fee Discount
CONS
Bitfinex was hacked in August 2016.
Its flagship IOU stablecoin Tether was hacked in 2017.
Their customer support can be unresponsive, and the interface will be a huge overkill for someone who just wants to buy and hold. Bitfinex is far more suitable for active trading than for plain buying.
FTX
- Accepts US
- Banks in US
- Altcoins A few
- Experience
More active traders will find the trading interface of FTX and the products are probably the only serious competition to Bitfinex - and as it happens the former public face of Bitfinex now works for FTX.
For people who are not into active trading and are not even curious, FTX will be an overkill compared to straightforward exchanges like Independent Reserve or Coinbase that are geared towards buy-and-hold.
PROS
FTX exchange is getting quickly known for its derivatives platform, FTX.com. The FTX US is a separate platform.
FTX US is a regular spot exchange, similar to Coinbase (except the fees are lower) or to Kraken (except their servers don’t crash three times a day).
KYC Verification is not required up to certain traded amount, but you will need to get verified on either of the FTX platforms to deposit fiat and purchase altcoins for USD.
Use code atnet at either FTX platform for 5% fee discount
CONS
International traders can buy and trade altcoins on the FTX.com exchange, while US traders can do so at the FTX US platform.
The FTX dotcom platform is not meant to be accessed by residents of the United States at all, as the interface very clearly states in the footer.
For buy-and-hold crypto investors there’s no issue at all.
The active trader will probably not like the fact that the international FTX branch runs derivative markets, tokenized stock trading, staking, defi and other products that in the US are not meant for retail investors.
The US branch of FTX is just a plain crypto spot market, listing coins that are not exactly hot anymore and not offering any interesting products.
FTX.us 5% Fee Discount FTX.com 5% Fee Discount
Use code atnet at either FTX platform for 5% fee discount
BitStamp
- Accepts EU, US and most of the world (SEPA, wire)
- Banks in EU (Slovenia)
- Altcoins Ripple, Ethereum, Litecoin (large-cap only)
- Experience
PROS
Bitstamp is a reliable exchange.
If you bank in the EU, you will be using the SEPA payment to send fiat in or out. It clears quickly and costs not much.
Bitstamp accepts US customers too, but it is less convenient for US traders to wire money to Slovenia.
Bitstamp is a good choice for people who bank in Europe, have no intention to actively trade, but want a reliable exchange to buy crypto from. Bitstamp even provides super simplified instant buy interface.
CONS
You need to be fully verified to even access Bitstamp: ID, proof of residence, selfie.
Certain account worth changes trigger additional KYC, such as questionnaire inquiring about how much you are about to traded and why will you be doing that.
The trading engine is slow and fees too high for active trading: Bitstamp rounds up the fee for every partial purchase which makes the whole trade relatively expensive.
Coinbase
- Accepts EU, US and most of the world (SEPA, wire)
- Banks in US
- Altcoins Ethereum, Litecoins, DeFi tokens (mix)
- Experience
PROS
Coinbase is the most popular exchange and crypto wallet in the US.
For US residents it is supper convenient to deposit in there, buy crypto on the exchange and keep it in the wallet. They also have an EU bank account for EU residents.
Coinbase lists a mixture of big and small cryptocurrencies, which makes it the easiest way to get exposure to new tokens (DeFi, anyone?).
CONS
In 2017, Coinbase lost a court case with the IRS and is obliged to share user data with the IRS.
They are capitalizing a lot on the fact that the noobs choose them. (Not that it’s terribly wrong, just saying.) You can buy directly through the wallet but the fees can get crazy. The regular exchange market with normal fees is at Coinbase PRO (formerly GDAX).
- Coinbase Wallet instant buy fee: between 1.49% and 3.99% depending on method
- Coinbase PRO instant buy fee (AKA market order, fills right away): 0.25%
- Coinbase PRO limit buy fee (AKA limit order, fills when the market gets there): 0
Last negative is that Coinbase is tracing where your crypto came from. If you decide to sell a coin you didn’t store in Coinbase wallet, but its previous owner passed it through a casino or a darknet market, Coinbase will detect it and shut your account down without warning.
Kraken
- Accepts EU, US and most of the world (SEPA, wire)
- Banks in US, EU
- Altcoins Plenty!
- Experience
PROS
Kraken offers easy to use interface for simple buying, and even easier to use OTC. The bottom limit for OTC transactions is only 100k USD, trades are done via Telegram.
Kraken is the exchange with the most solid banking, and was awarded a banking license in 2020.
KYC is required only to move fiat (ID, proof of address).
Kraken is the best choice for US residents to buy cryptocurrencies.
CONS
Kraken used to be the least reliable crypto exchange, the platform would crash all the time, but they seem to have gotten their stuff together. We’ll see how they’ll hold up during the next bull market.
The trading interface is still pretty janky. In a way, Kraken is the perfect complement of Bitfinex - Bitfinex is better for trading while Kraken for plain purchasing.
Independent Reserve
- Accepts AUD, NZD, USD, SGD (Locations: Most of the world)
- Banks in AU
- Altcoins A couple, mix of large-cap and new DeFi tokens.
- Experience
PROS
Independent Reserve is an Australian crypto market that is catered towards crypto buy-and-hold investors. It is not a place for active daytrading, kind of like Kraken isn’t.
The main advantage of Independent Reserve is their built-in DCA bot which makes it easy for long-term holders to DCA in or out.
They have an OTC desk and a tax calculator provided by KPMG. Financial advisory, insurance and other more traditional asset management services are available for a fee.
Customer support is pretty good.
About IndepReserve Join IndepReserve
CONS
Banks in Australia, so your wire will take a while. There is a small administrative fee for fiat transactions of less than 5000 USD worth and the exchange fees are not the lowest in the industry at all.
You have to get KYC verified even if you do not want to move fiat in and out.
Their trading interface is super basic, again - this is an exchange for simple buying, not for daytrading.
How to Buy Altcoins Anonymously (Without KYC)
In 2021, there is only one reliable platform that will let you buy crypto anonymously without KYC and that is LocalCryptos.
LocalCryptos are NOT related to LocalBitcoins. LocalBitcoins is a technically unsound platform that can be no longer recommended.
- Accepts Most of the world (wire, cash, venmo etc)
- Altcoins ETH, LTC and BTC
- Experience
Why are LocalCryptos better
LocalCryptos is a zero-knowledge dApp to which you sign up directly through your MetaMask or other crypto wallet.
You own the private keys of your crypto. The platform will never have a reason to ask you for KYC, since they don’t work with your crypto at all. You are always the sole owner of your cryptocurrency, even if you store it inside the LocalCryptos app.
The vendor you are buying cryptocurrency from might ask for your documents to lower the risk of fraud. This is not exposing you to the platform, the messaging system on LocalCryptos is end-to-end encrypted.
Even if a government agency asks for access to your messages, LocalCryptos cannot provide any.
How to Buy Small Altcoins for Other Crypto
For crypto-to-crypto trades, the regulations are typically far less strict than for transactions between fiat and crypto.
There are plenty places where you can use BTC, ETH or some other larger crypto and swap it for the small-cap token of your choice without any KYC, in some cases without any need to sign up for an account.
Buy-And-Hold, Small Amounts: Altcoin Wallet Built-ins
If you are looking for the fastest and easiest way to buy a smaller altcoin for a larger one, just use an exchange or swap built into your wallet.
Since the exchange is inside an app you already use, the danger you will land on a scam imposter exchange is negligible. Another advantage of using wallet built-ins is the fact that many altcoin wallets will now let you stake your PoS altcoins directly from there.
- Exodus wallet is one such wallet that has exchange, has staking AND is completely free. Exchange fees are a bit higher but for small one-off transactions it doesn’t amount to much.
- Ledger wallets now also come with a built-in exchange and staking app within their Ledger Live suite.
- MyEtherWallet offers a built-in swap for Ethereum-based tokens.
Buy-And-Hold, Larger Amounts: Exchanges with Staking
For larger transactions the fee will start to matter, which is why you will want to take your money to an actual trading exchange.
Other than the fee you might want to look at exchanges that can stake your exchange wallet contents for you. Staking an altcoin on an exchange will typically give you yearly yield of around 6-8%.
Staking yields are not as outsized as with DeFi but there is less risk involved. Some exchanges offer as an optional product to cover your crypto with insurance.
- Bitfinex automatically stakes PoS coins in exchange wallets
- FTX.com lets you stake if you are not American.
If you plan to buy for 6 digit amounts and more, especially of a new altcoin, go to an OTC desk.
- Independent Reserve has OTC desk for USD, SGD, AUD and NZD markets.
- Bitfinex and FTX have OTC market.
How to Buy Altcoins as a US resident
As most of us know, US traders are not welcome on most crypto exchanges. Bitfinex stopped servicing verified US residents in November 2017. BitMEX stopped servicing US customers long ago but since August 2020 started actually enforcing that.
Good news is that once you get some crypto, you can trade that into pretty much any other crypto.
Buying crypto from the US
To onramp into crypto from the US, you have the following options:
Option 1 - Through KYC’d exchange
- Pass KYC on a US regulated crypto exchange
- FTX US
- Gemini
- Coinbase
- Kraken
- (Details in our list of crypto exchanges good for buying)
- Buy BTC, ETH or other large-cap crypto that is available there
- Sell your large-cap crypto for any small-cap crypto you want
- Bitfinex doesn’t do KYC for crypto deposits
- Wallet built-ins will let you buy small crypto from wallets like Exodus or Ledger (see above)
Option 2 - Through a marketplace
- Get BTC, ETH or LTC on a zero-knowledge p2p market like LocalCryptos
- Sell your large-cap crypto for any small-cap crypto you want
- Bitfinex doesn’t do KYC for crypto deposits
- Wallet built-ins will let you buy small crypto from wallets like Exodus or Ledger (see above)
Daytrading and staking crypto from the US
If you are American and want to daytrade your newly acquired altcoins, you have following options:
- Trade spot and margin-spot unverified on Bitfinex with no limits on withdrawals or trade size.
- For high leverage, small altcoins and perpetual swap with no KYC there are two new Asian platforms
- To get DeFi tokens, WhiteBit lets you trade unverified until 2 BTC withdrawals per day.
- First 14 days are on zero fee if you sign up with this shill link.
- If you have ETH, you can use a non-custodial DEX platform without verification.
- Uniswap - the original leader, ETH DEX, but with high fees
- Pancakeswap - new DEX on Binance blockchain, lower fees, plenty NFTs, staking and other ways to earn
Last but not least: Don’t leave your crypto on the exchange!
Altcoin Storage: Cryptocurrency Wallets
You have two options - an altcoin-specific wallet or a multi-altcoin wallet. In any case, it is always a bad idea to leave your coin on an exchange.
See recommended altcoin wallets here