🛒 Cryptocurrency to Buy 2021 Guide: Compare Costs, Confirm Custody, and Reduce Transaction Risk

Buying cryptocurrency for the first time in 2021 was an exciting but potentially overwhelming experience. This guide walks you through the entire purchase process — from choosing a platform and comparing costs to securing your assets and avoiding common pitfalls.

📅 Updated July 2026 ⏱️ 20 min read 🛡️ Buyer's Guide
📌 Note: This guide reflects the landscape of 2021. Platforms, fees, regulations, and available cryptocurrencies change over time. Always verify current information using up-to-date sources before making any purchase.

📋1. Step-by-Step Buying Process

Purchasing cryptocurrency in 2021 involved a series of clear steps. While platforms varied in their exact flows, the fundamental process remained consistent across most exchanges and brokerages.

1.1 Choosing a Platform

The first and most important decision was selecting where to buy. In 2021, the market included several categories of platforms:

🔑 Key Consideration: The best platform for you depended on your priorities — lower fees, wider selection, ease of use, or regulatory compliance. For most beginners in 2021, Coinbase and Binance were popular starting points due to their reputation and user-friendly interfaces.

1.2 Account Creation and Verification

Most platforms required identity verification (KYC — Know Your Customer) to comply with anti-money laundering regulations. This typically involved:

Verification times in 2021 ranged from minutes to several days, depending on the platform and the completeness of the submitted documentation.

1.3 Funding Your Account

Once verified, the next step was to deposit funds. Payment methods available in 2021 included bank transfers (ACH, SEPA, wire), debit/credit cards, and in some cases, third-party payment processors like Skrill or Revolut. Each method had different processing times and fee structures.

💳2. Comparing Payment Methods

The payment method you chose in 2021 significantly impacted your total cost, the speed of your purchase, and the overall experience. The table below compares the most common options.

Payment Method Typical Fee Settlement Time Limits Availability Key Considerations
Bank Transfer (ACH/SEPA) Low (0–0.5%) 1–5 business days Varies (often $1,000–$100,000+) Widely available Cheapest but slowest; rate may change during settlement
Wire Transfer Medium ($15–$50 + exchange fee) 1–3 business days High (often $10,000+) Most platforms Good for large amounts; bank fees apply
Debit/Credit Card High (2–4%) Instant to minutes Low–Medium ($100–$10,000) Most platforms Fastest but most expensive; may be treated as cash advance
PayPal / Skrill Medium–High (2–3%) Instant to 1 hour Medium ($1,000–$10,000) Limited platforms Convenient but not widely supported
Cash / In-Person (P2P) Low (0–1%) Instant Varies P2P platforms only Highest risk; no buyer protection

📊 Data Point: In 2021, debit card purchases accounted for approximately 35% of retail crypto transactions on major exchanges, according to industry reports. However, bank transfers represented over 60% of total dollar volume due to their lower fees and higher limits.

2.1 Impact of Payment Method on Total Cost

The total cost of buying crypto in 2021 was not just the asset price — it included platform trading fees, payment method fees, and any spread applied by the platform. For example, a $500 purchase via credit card on Coinbase could incur fees of $15–$25, while the same purchase via bank transfer on Binance might cost only $2–$5 in fees.

💰3. Understanding Fees & Costs

Fee structures in 2021 were often complex and varied significantly between platforms. Understanding the different types of fees was essential to making cost-effective purchases.

3.1 Types of Fees

📊 Trading Fee (Maker/Taker)

Charged when you place an order. Maker fees (adding liquidity) were typically lower than taker fees (removing liquidity). In 2021, fees ranged from 0.1% to 0.5% on major exchanges, with lower rates for higher trading volumes.

💳 Payment Method Fee

Applied when funding your account. Debit/credit cards had the highest fees (2–4%), while bank transfers had minimal or zero fees. Some platforms also charged withdrawal fees.

📦 Spread

The difference between the buy and sell price. Many platforms (especially brokerages) added a spread to the market price, effectively charging an invisible fee. In 2021, spreads could be as high as 2–3% on some platforms.

⛽ Network Fees

Blockchain transaction fees (gas fees) paid to miners or validators. These varied based on network congestion. In 2021, Ethereum gas fees could spike to over $50–$100 during peak periods, while Bitcoin fees were typically lower.

3.2 Comparing Platform Costs

When evaluating platforms in 2021, it was important to consider the total cost of a transaction, not just the headline trading fee. A platform with lower trading fees might have higher spreads or payment method fees, resulting in a higher overall cost.

Example comparison: A $1,000 purchase on Platform A with a 0.5% trading fee and 2% credit card fee would cost $25 in fees. Platform B with a 0.1% trading fee but 3% card fee would cost $31. Platform C with a 1% trading fee and 1% spread but free bank transfer would cost $20.

⏱️4. Settlement & Transaction Timing

Understanding the timeline from placing an order to having the cryptocurrency available in your wallet was crucial for planning and managing expectations.

4.1 Order Placement to Execution

Once you placed an order, the execution time depended on the order type:

4.2 Settlement Timeframes

Even after execution, the funds might not be immediately available for withdrawal. Settlement times in 2021 varied:

⚠️ Important: During periods of high volatility or network congestion, settlement times could extend significantly. Always check the platform's current status page for any delays.

4.3 Network Confirmation Times

After initiating a withdrawal, the cryptocurrency transaction needed to be confirmed on the blockchain. In 2021:

Network congestion could increase these times dramatically, especially during peak usage periods or major market events.

🔐5. Custody Options & Security

One of the most critical decisions when buying cryptocurrency in 2021 was where and how to store it. "Not your keys, not your crypto" was a widely repeated mantra — and for good reason.

5.1 Custodial vs. Self-Custody

🏛️ Custodial Storage (Exchange Wallets)

How it works: The exchange holds the private keys on your behalf.

Pros: Convenient, integrated trading, recovery options available.

Cons: You don't truly own the keys; vulnerable to exchange hacks or insolvency.

🔑 Self-Custody (Non-Custodial)

How it works: You hold the private keys yourself.

Pros: Full control; only you can access your funds.

Cons: You are solely responsible for security; losing your keys means losing access.

5.2 Wallet Types in 2021

💡 Recommendation: For most buyers in 2021, the recommended approach was to use the exchange wallet for active trading and a hardware wallet for long-term storage. This balanced convenience with security.

5.3 Backup and Recovery

For self-custody wallets, the recovery phrase (seed phrase) was the master key to your funds. Best practices in 2021 included:

🛡️6. Fraud Prevention & Scam Avoidance

The cryptocurrency space in 2021 was rife with scams and fraudulent schemes. Being aware of the most common threats was essential for protecting your funds.

6.1 Common Scams in 2021

6.2 Fraud Prevention Checklist

🚨 Red Flag: In 2021, the FBI reported that cryptocurrency-related fraud losses exceeded $3 billion, up from $1.5 billion in 2020. Always verify before you trust — and never invest more than you can afford to lose.

✅7. Practical Checklist

Use this checklist to guide your cryptocurrency buying process, from research to post-purchase security.

📋 Crypto Buying Checklist

  • Research platform options — Compare fees, security, supported assets, and user reviews.
  • Verify platform legitimacy — Check regulation, history, and reputation.
  • Complete KYC verification — Have ID and proof of address ready.
  • Choose your payment method — Compare fees and settlement times.
  • Set up 2FA — Use authenticator app for account protection.
  • Start with a small test purchase — Verify the process works before committing larger amounts.
  • Transfer to a self-custody wallet — Move funds to hardware or software wallet for long-term holding.
  • Back up your recovery phrase — Store securely offline in multiple locations.
  • Monitor your portfolio — Track prices and adjust your strategy as needed.
  • Stay informed — Keep up with news, regulations, and security best practices.
📌 Scenario: A First-Time Buyer

Sarah was a first-time crypto buyer in April 2021. She had been researching Bitcoin for months and decided it was time to start with a small investment of $500. She followed these steps:

  1. Research: Compared Coinbase, Binance, and Kraken. Chose Coinbase for its beginner-friendly interface, despite slightly higher fees.
  2. Account setup: Completed identity verification using her driver's license and a utility bill. Verification took about 15 minutes.
  3. Funding: Used a bank transfer (ACH) to deposit $500, which took 3 business days to clear.
  4. Purchase: Bought Bitcoin with a market order at the current price, paying a $3.50 trading fee.
  5. Custody: Transferred her Bitcoin to a Ledger hardware wallet she had purchased in advance. The transaction took about 40 minutes to confirm.

Sarah's careful approach helped her avoid the common mistakes of using a credit card (high fees) and leaving funds on the exchange. She felt confident knowing her Bitcoin was securely stored.

Lesson: Taking a measured, step-by-step approach — even with a small investment — builds good habits and reduces the risk of costly errors.

⚠️8. Common Mistakes

Even experienced buyers made mistakes in 2021. Here are the most common errors and how to avoid them.

  • Using a credit card for large purchases: High fees and potential cash-advance charges made this an expensive option. Bank transfers were more cost-effective.
  • Leaving funds on an exchange: Many users lost funds in exchange hacks or platform failures. Moving to a self-custody wallet was the safer approach.
  • Falling for phishing emails: Clicking on fake exchange links led to credential theft. Always typed URLs manually and checked the sender's address carefully.
  • Investing more than they could afford to lose: The volatile nature of crypto meant that over-investing led to panic selling during downturns.
  • Not backing up recovery phrases: Losing access to a wallet due to a lost seed phrase was a permanent loss of funds — a mistake that could not be reversed.
  • Chasing "hot tips" on social media: "Moon" predictions and "guaranteed" pumps often led to buying at inflated prices and losing money.
  • Not considering tax implications: Failing to track transactions could lead to unexpected tax bills. Proper record-keeping was essential.
  • Using public Wi-Fi for transactions: Unsecured networks were prime targets for man-in-the-middle attacks. Always used a secure, private connection.

📛Risk Warning & Final Thoughts

⚠️ Important Risk Warning

Cryptocurrency investments carry substantial risk, including the potential loss of your entire investment. The information in this guide reflects the landscape of 2021 and is provided for educational purposes only. It is not financial, legal, tax, or investment advice.

Before making any purchase, verify current prices, fees, platform availability, and regulatory requirements from reliable, up-to-date sources. Cryptocurrency markets are highly volatile, and past performance is not indicative of future results.

You are solely responsible for your investment decisions. Consult with qualified professionals for personalized advice. Never invest more than you can afford to lose.

Buying cryptocurrency in 2021 was a journey of learning, exploration, and careful decision-making. By comparing costs, understanding custody options, and taking steps to reduce transaction risk, buyers could navigate the market with greater confidence and security.

While the specific platforms, prices, and regulations have evolved since 2021, the core principles of research, caution, and security remain timeless. Apply these principles diligently, and you will be better equipped to make informed decisions in any market environment.

🔁 Remember: The best investment is an informed one. Take your time, do your research, and always prioritize security over convenience.

❓ Frequently Asked Questions

What was the best cryptocurrency to buy in 2021?
In 2021, Bitcoin and Ethereum remained the most established choices for new buyers. However, many investors also explored altcoins like Cardano, Solana, and Polygon, which saw significant growth during that year. The 'best' choice depended on individual risk tolerance and investment goals.
What were the fees for buying crypto in 2021?
Fees in 2021 varied widely by platform. Major exchanges like Coinbase and Binance charged between 0.5% and 4% per trade depending on payment method and volume. Brokerage services like Robinhood and Cash App offered lower fees but with less control over the underlying asset. Always check the fee schedule before buying.
What custody options were available in 2021?
In 2021, custody options ranged from exchange wallets (custodial) to hardware wallets like Ledger and Trezor (self-custody), and software wallets like MetaMask and Trust Wallet. Each option offered different trade-offs between convenience and security.
What were the common risks when buying crypto in 2021?
Common risks in 2021 included: exchange hacks and security breaches, fraudulent platforms, phishing attacks, extreme price volatility, regulatory uncertainty, and losing access to funds due to forgotten passwords or lost recovery phrases.
How did payment methods affect crypto purchases in 2021?
Payment methods in 2021 included bank transfers (ACH/SEPA), debit/credit cards, and wire transfers. Bank transfers typically had lower fees but longer settlement times, while credit cards offered instant purchases at higher fees and often with additional cash advance charges from the card issuer.
What was a typical transaction timeline in 2021?
In 2021, bank transfers could take 1-5 business days to clear, while debit/credit card purchases were near-instant but with higher fees. Cryptocurrency network confirmations varied: Bitcoin took 10-60 minutes on average, while Ethereum and other networks could be slower or faster depending on network congestion.
How could buyers reduce risks in 2021?
Buyers in 2021 reduced risks by: using reputable and regulated exchanges, enabling two-factor authentication, using hardware wallets for long-term storage, avoiding public Wi-Fi for transactions, double-checking wallet addresses before sending, and only investing what they could afford to lose.
Were there any tax considerations for buying in 2021?
Yes, in many jurisdictions, buying cryptocurrency itself was not a taxable event, but selling, trading, or using crypto to buy goods could trigger capital gains taxes. In the US, the IRS treated crypto as property, requiring reporting of transactions. Always consult a tax professional for guidance.
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