Where to Buy Bitcoin California

It is legal to purchase and sell Bitcoin (BTC) in California. Legalized in 2019 by California lawmakers, you will find that there are many bitcoin exchanges to choose from.

A snapshot of California Cryptocurrency Market:

It is legal for residents of California to buy and sell Bitcoin
Investors and traders must be at least 18 years old
An exchange is permitted to facilitate a marketplace if licensed and abides by the California Money Act.
Penalties of up to $50,000 if the California laws are violated.

California investors are the most active among States in the US. Bitcoin and altcoin ATMs are relatively abundant throughout the state, contributing to the uptake of bitcoin within mainstream.

If you looking for Bitcoin Exchanges in California to buy and sell cryptocurrency with, we recommend the following exchanges:

Top 5 California Bitcoin Exchanges

Overview of California Bitcoin Exchanges

California (especially San Francisco), is at the forefront of US States that excels in technology and innovation, which of course includes blockchains and cryptocurrencies. Perhaps too often the growth of a new technology is associated with only hipster geeks or entrepreneurs flush with dollars in their pockets, however cryptocurrency is now becoming more part of the mainstream in the state.

You will find that there are many bitcoin and cryptocurrency ATM’s along with a few big exchanges that have made California their base for a head office. Onshore (meaning licensed with the State of California) exchanges can be deemed far more safer than offshore, however the benefits of offshore certainly allow for quicker account set up (less red tape) and greater privacy.

When considering a cryptocurrency exchange, there are many aspects to take into account. These may include platform reliability, latency, pairings, licensing, fees and a raft of many others.

At CoinMaximus, we outline the top criteria to consider when choosing an exchange.

🔒 Safety and Security

Safety and security is one of the criteria that is at the top of the list. If you are new to cryptocurrency, you may not be familiar that many exchanges have been hacked resulting in coins stolen. There have also been instances whereby customer details have been leaked, and hackers have used this information to spam or phish.

Choosing a reputable, safe and secure exchange is therefore vital for investors and traders. Safe and security is an extremely hard factor to judge. The larger the exchange, the higher the risk that it will be targeted by hackers. But then again, the more investment in cyber security by the exchange operator.

Licensing and regulation, to a degree, also plays an important part. If regulated in the US, you can be assure that it will need to abide by compliance laws to protect customers. That said, the laws in the US, dictated by the Securities Commission and IRS, can be overwhelming and could result in complete exposure of all cryptocurrency trades.

Hence, many are turning to offshore exchanges to facilitate the exchange of cryptocurrencies.

In finding a good safe and secure exchange looking for a two step authentication process. A two step authentication requires the customers to validate their log in twice through two devices. This normally involves the smartphone as well as the laptop, tablet or other operating device.

Also, research the exchange’s history of being hacked. At present, nearly ALL the global big player exchanges have been attacked, and some have lost customer monies and details. It is fair to say, that all exchanges are at risk, but the safest ones, are normally the largest and the most established. We strong recommend NOT day trading, but investing for the future. Purchase your bitcoin and move them offline onto a cold wallet immediately.

📞 Customer Support

Every one that uses a cryptocurrency exchange will at some time or another need to engage with customer support. Users of any platform (particularly one’s that offer a wide product range that includes margin lending, staking, ICO and other services) will need to ask for guidance in using, in technical, and will have questions.

Irrespective of whether you are a beginner or experienced, you will eventually need to ask a question, and therefore the customer support of the exchange is important. Prompt and accessible customer support is highly regarded when choosing an exchange. If you choose an exchange, that doesn’t answer you promptly, or even professionally with the appropriate answers, then you could lose a lot of money, simply through a change in exchange rates. Worse still, you may be advised to place the wrong buy order for bitcoin and end with a margin lending product instead of a straight buy!

Looking for bitcoin and cryptocurrency exchanges, that provide good quality customer support. You will need it.

💳 Payment Methods

This criteria is often overlooked. Common payment methods include credit card – Visa and MasterCard, wire transfers, and of course bitcoin deposit and withdrawals. e-wallets are now also making a big entrance to the scene, with PayPal now accepting bitcoin as a form of storage option.

The larger and better exchanges will offer a wider range of payment options, with the appropriate encryption in place to perform transactions safely and securely.

🪙 Cryptocurrency Selection

The bigger and larger cryptocurrency exchanges will offer a massive range of pairing. You could trade in potentially over the hundreds and thousands of cryptocurrency on offer. At the end of the day, you just need to find a good exchange that will offer the cryptocurrency and fiat currency that you want to exchange in. Unless you intend to buy and sell in an extremely wide and diverse range of cryptocurrency, then it doesn’t really matter how wide the cryptocurrency selection is, as long as it offers what you are looking for.

Be aware, that some exchanges are deal with crypto to crypto. If you are just starting out, and have no crypto, then of course, the crypto to crypto exchanges will not meed your needs.

🏷 Coupons and Discounts

If you have noticed already, the industry is turning to marketing sales pitches that promises easy money, quickfire returns and rewards that includes free shares, free coins, and discounted fees through the use of coupons.

It most cases, the exchanges that use high level marketing pitches (that are really too good to be true) should be avoided at all cost. Don’t fall for these tricks.

Once you have found an exchange that you do want to sign up to, then look for coupons and deals that will boost your return. There are many coupons out there. Just Google for them on the internet and you will find them.

Then sign up and use the coupon.

I know that you are thinking, but the scam sites also offer coupons. Yes, they do and this is the danger of not knowing which exchange is good or bad, hence we high recommend choosing from our list.

💰 Fees

Choosing the wrong exchange that has high fees, will destroy your investment strategy. Now, this doesn’t mean that you should go out there and pick the exchange with the lowest fee offering. Far from it, because the lowest could also be the most dangerous. It is a hard balancing act, and exchanges make it even harder to compare with each having their own fee structure.

To a degree, each investor should look at their intend volume and dollar value of trades and then apply the fee structure of the exchange, to determine which offers the most value for money. Undoubtedly this will take an enormous amount of time. So for our recommended list, we have review the general fee structure, but to be sure, you should also review and ensure that your investment strategy aligns with the overall fee comparison that we have performed.

⚙️ Platform Reliability

There is nothing more worse than having a platform crash, right when you want to buy bitcoin at a great exchange rate. And then when the platform is back up online, you discover that the bitcoin exchange rate has moved against you. This could not be more frustrating and annoying. The best exchanges will use expert developers, and most of the time have been in the industry for a while. There are specific industry developers that have built great exchange platforms which is white labelled to both onshore and offshore exchanges.

📈 Liquidity

This is where the big players have an advantage over the smaller ones. Liquidity means a high volume of buyers and sellers. If there is a high volume, then it is easy to liquidate your position, i.e. you can sell out or buy back in without the need to find a buyer and seller. If liquidity is low, then you may find that you will have to wait a long time to find anyone willing to buy or sell – this then means you cannot close out your position quickly and the exchange rate may move against you.

The larger exchanges therefore will have a better pool of buyers and sellers to close out your positions quickly. But be careful! Exchanges deliberately over inflate their trading volumes and dollar value. ALL of them do this, to try and gain advantage over their competitors. How to know then which truly has the best liquidity? It is difficult to say. But we have personally purchased through the larger exchanges and we have compared how quickly it is to find a buyer and seller.

California Cryptocurrency Exchange Reviews

The world of cryptocurrency exchanges is evolving rapidly, with many new comers joining the blossoming market. By far, there are too many to review. Hundreds, if not thousands, of exchanges should be reviewed. But alas, there are too many of them. For Californians, we have therefore reviewed the “bigger” ones. The ones that we feel warrant a review, and will be around for the long term.

Coinbase

Coinbase is possibly the largest cryptocurrency exchange in the world. It has the most liquidity (prima facie) for Bitcoin as well as for the other top ten traded currencies. It is planning to launch an IPO (float on the stock exchange) in the near future, and will be valued at over a billion (if not billions) of dollars. The exchange is widely used because it offers a simply easy to use layout and functionality, and has established a good reputation as a leader in the industry.

Coinmama

Coinmama is the new kid on the block, but we like them. They are more limited in coin offerings, but are expansive in bitcoin and is available to connect traders globally.

Trading fees tend to lean towards the higher side, from 3.9% and 5.9% depending on dollar value and volume. This may eat into your investment strategy, particularly if you are a day trader. On the flip side, they have invested in a safe and secure platform, and can be found to be reliable and honest.

Etoro

Etoro is a well established financial services company, that first began as a forex exchange offering a fast and reliable platform for trading. They have since expanded in cryptocurrencies and are marketing extremely hard to attract more customers.

Etoro was founded in 2007, creating a platform that is accessible to many countries around the world. Pioneers in providing easy access to financial markets to retail investors, they have now expanded their offerings to Californians into the crypto world. Their customer support can be a little slow at times, with the quality of user advice of their platform a bit and miss.

Their platform, isn’t as user friendly as the others, hence the reliance of customer support. Having said that, they have been around for a long time.

What we don’t like about Etoro is their aggressive marketing campaigns. We understand that marketing is important, however, social media is flooded with “customers” vouching for them. This is a very bad look and in fact, gives the impression that Etoro is a scam site.

CEX.IO

One of the best exchanges in terms of fees. Extremely reasonable and won’t hurt your investment strategy. Offering a wide range of fiat and cryptocurrencies, CEX.IO is a relatively newcomer that is looking to expand quickly in the market. Payment methods are also extremely broad, with credit card, debit cards, wire transfer and e-wallets accepted.

Can they be trusted? Still a bit too early to tell, but they are moving up in size quite quickly.

Kraken

You may have heard of the twins that invested Facebook and took Mark Zuckerberg to court. Well, the twins developed and invested in Kraken, one of the best cryptocurrency exchanges for Americans. The support behind the platform stems from the twins, who also own a large quantity of bitcoin, enabling them to facilitate and sustain an exchange.

According, liquidity is not an issue, with many customers choosing to use Kraken. The platform itself, is smooth with very little latency. Trades can be performed quickly and reliably, with security at the forefront with a three tiered verification process.

In addition, transactions fees, through not the cheapest, are very reasonable.

Bitcoin Cryptocurrency Laws and Legalisation

The legality of cryptocurrency and trading is indirectly linked to the California’s Money Transmitter Act. This Act broadly covers financial transactions in general, but it is not updated to directly outline the rules for digital currencies. It is therefore ambiguous as to what the treatment of digital currencies should be (although it can be implied).

A blockchain working group was established by the Governor of California in September 2018. This working group was to assess the risk of trading, propose regulations and policy, and governance.

As a result of the working group, the State passed Bill 2658 which defines blockchain and a smart contract. With blockchain defined, it legalized cryptocurrency.

June 2016 saw the State introduce Cal. Stat. § 320.6. This declared that it was unlawful for charity raising through raffles be allowed to be exchanged for any form of cryptocurrency.

In February 2019 the Bill 1489 was enacted by lawnmakers. This Bill brought into place the “Uniform Regulation of Virtual Currency Business Act”. This act implement a framework for operating and trading cryptocurrencies. The Act prohibits any digital currency activity unless license and registered with the Department of Business Oversight.

Fines and penalties of up to $50,000 would be applied if the bill was breached.

In February 2019, the framework and governance for buying and selling through an exchange was enacted. The Assembly Bill 147 was introduced which legalizes the buying and selling of “virtual currency” through a “marketplace facilitator.”

Bitcoin and Cryptocurrency Wallets

Some exchanges also offer wallets. It’s not necessary for a good exchange to offer a wallet to their clients, though it can be a nice to have for new investors. However, be aware that online wallets offered by exchanges are normally hot wallets. That is, these wallets are connected permanently to the internet. This can be quite risky to use a wallet that is controlled by the exchange and not by yourself.

Hence it’s not necessarily a good thing if an exchange offers a wallet, but it’s a nice to have, if you are looking for an exchange with their own wallet.

Online Wallets: Every crypto-exchange has their own wallet where traders can store their coins or cryptocurrencies for as long as they want. However, there are two types of these wallets that traders have to decide about which wallet they want to use for their trading.
California Hot Wallets: Since the inception of bitcoins and other cryptocurrencies, wallets have been transformed and divided into two forms- desktop and online. Digital wallets are free and can hold any cryptocurrency that traders want. They enable them to get easy access to their cryptocurrencies via mobile devices. They are perfect for beginners who want something easy to start with.
California Cold Wallets: These specifically designed devices work as physical cryptocurrency storage that allow traders to bring their cryptos with them, no matter where they are going. Though, the only considerable thing is their expensive nature with limitations of storing certain cryptocurrencies for future use.

Minimum Legal Age

According to the California laws, residents that want to buy and sell bitcoin must be at least 18 years old.

Summary

Investing and trading in bitcoin and altcoins is legal in the State of California. The law is quite clear in defining “virtual” currencies and indeed outlines the operation of a cryptocurrency exchange within the state and refers to this entity as a “marketplace facilitator”.

Although it is not clear, it could be deemed that users of cryptocurrency exchanges that are offshore by residents of California is unlawful.

If you intend to trade and invest in bitcoin within California, we strong recommend to use only licensed exchanges onshore in California.