// I. Scope & Principles
Guide Purpose
This cheatsheet provides an overview of common platforms used to buy/sell Bitcoin (Exchanges) and methods for spending crypto using payment cards (Crypto Cards). It focuses on key considerations, typical features, and associated risks for beginners and intermediate users.
Core Principles & Disclaimer
Key Reminder: "Not Your Keys, Not Your Coins." While exchanges & cards offer convenience, true ownership means controlling your private keys (Self-Custody). Platforms listed here are primarily custodial (they hold your assets).
Disclaimer: Educational info only, not financial advice. Crypto involves high risk & volatility. Regulations vary. Do Your Own Research (DYOR). Be aware of tax implications.
// II. Bitcoin / Crypto Exchanges
What is an Exchange?
Online platforms where you can buy, sell, and trade cryptocurrencies like Bitcoin using traditional fiat money (USD, EUR etc.) or other digital assets. They act as intermediaries, matching buyers and sellers.
Focus: Primarily as On-Ramps (buying BTC with fiat) and Off-Ramps (selling BTC for fiat). Most are Centralized & Custodial.
Choosing an Exchange: Key Factors
Consider: Security (2FA, history), Fees (trading, withdrawal, spread), Fiat Options (methods, currency), Regulation/KYC, User Interface, Liquidity, Ease of BTC Withdrawal to self-custody, and Customer Support.
Factors Explained:
- Security: Use Hardware 2FA (TOTP/Security Key). Check exchange's cold storage practices, insurance claims (often limited). Avoid exchanges with major security breaches.
- Fees: Look at maker/taker fees for trading, fixed fees for simple buys, deposit/withdrawal fees (both fiat & crypto!), and the bid-ask spread.
- Fiat Access: Does it support your currency? Preferred payment methods (ACH, Wire, Card, SEPA)? Cards are convenient but often have high fees.
- Regulation: Is it licensed in your jurisdiction? Expect KYC/AML verification (ID upload).
- Withdrawal: Can you withdraw *actual Bitcoin* (not just fiat)? How fast? What are the fees & limits? Crucial for self-custody.
- Liquidity: High volume exchanges usually offer better prices (tighter spread).
- Coin Support: Bitcoin-only reduces complexity/risk. Multi-coin exchanges have larger attack surfaces.
USA Focused / Widely Available
Coinbase
Very beginner-friendly, easy fiat options (ACH, Debit, PP), public company, insured hot wallet (limited). Higher fees on basic interface, promotes altcoins, custodial risk, strict KYC.
Kraken
Long history, strong security rep, competitive fees (Pro), good support, licensed widely. UI slightly less simple than Coinbase basic, promotes altcoins, custodial risk, strict KYC.
Gemini
Focus on security/compliance, user-friendly, insured hot wallet. Offers Credit Card (see Section III). Lower liquidity than giants, past 'Earn' program issues impacted trust, promotes altcoins, custodial risk.
Swan Bitcoin
Bitcoin-only (focus!), designed for DCA/accumulation, strong self-custody education focus, simple UI. Primarily for buying (not trading), limited instant buys, requires bank linking.
Strike
Simple UI, uses Lightning Network, direct deposit to BTC option, low fixed fees (via spread). Mobile-focused, less trading features, uses partners (custody/liquidity), state availability varies.
Cash App
Extremely simple (integrated w/ payments), easy buy/sell/withdraw small BTC amounts, LN withdrawals. Basic features only, potentially higher spreads, restrictive limits initially, custodial within app.
Global / Non-USA Focused
Binance (Global)
Largest volume (liquidity), huge feature/coin range, low *trading* fees. Regulatory issues/bans vary, complex UI, support can be slow, major custodial risk, Not for US users.
Bitstamp
Very long history (since 2011), strong EU presence/regulation, stable reputation. Lower liquidity/fewer pairs than giants, fewer features.
Bitkey
Beginner-friendly setup, no user-managed seed phrase (removes major user error point), Simple hardware (fingerprint), Recovery via 2-of-3 multisig (Mobile Key, Hardware Key, Server Key). Not traditional self-custody: Relies on 2-of-3 multisig where Block/Bitkey holds server key (counterparty/server risk). Mobile key is hot. Hardware needs phone/server. Different trust model.
Peer-to-Peer (P2P) Platforms
Bisq
Decentralized (no central entity), no KYC, non-custodial (BTC escrow), many payment methods. Requires running software, slower, lower liquidity, complex for beginners, payment risk (non-BTC side).
Hodl Hodl
Non-custodial P2P (multisig escrow), no platform KYC, web-based, global. Lower liquidity, requires user matching, P2P payment risks, understanding multisig escrow helps.
Exchange Best Practices
// III. Crypto Credit/Debit Cards
What are Crypto Cards?
Payment cards (usually Visa/Mastercard) linked to a crypto account. They allow you to spend your crypto balance at merchants by instantly converting crypto to fiat at the point of sale (most common) or borrowing against crypto (credit).
Key Drawback: Spending crypto is often a Taxable Event. Requires careful tracking.
Choosing a Crypto Card: Key Factors
Consider: Fees (conversion, FX, ATM, hidden spreads), Rewards (%? In what asset? Staking needed?), Funding Mechanism, Supported Cryptos, Provider Risk (custodial), Tax Complexity, Availability (region).
Factors Explained:
- Fees: THE MOST IMPORTANT FACTOR. Look beyond "no annual fee". Check conversion fees/spreads (can be 1-3%+), foreign transaction fees, ATM withdrawal fees/limits, inactivity fees.
- Rewards: Is cashback paid in BTC, stablecoins, or the provider's volatile token? Are high staking amounts of a risky token required for good rates?
- Mechanism: Debit/Prepaid (spend owned assets) is most common. Credit (borrow against crypto) adds loan risks (liquidations).
- Funding: How easy is it to load? Auto-convert from specific crypto? Manual fiat load?
- Provider Risk: You are holding funds custodially with the card provider (often an exchange). Subject to their solvency and terms. (See BlockFi card history).
- Tax Burden: In many countries (like the US), *each* time you spend crypto via the card, it's treated as selling that crypto – creating a taxable gain or loss. This requires meticulous record-keeping.
- Availability: Check if the card is offered in your specific country and state/region.
Exchange-Linked Cards (Debit/Prepaid)
Coinbase Card
Easy funding from Coinbase, simple UI, choose reward crypto, widely available (US/UK/EU). Visa Network. Conversion fees/spread apply, rewards variable, custodial risk, spending is taxable.
Crypto.com Card
Tiered rewards/perks (rebates, lounge), global presence, wide crypto support. Visa Network. Requires staking volatile CRO for good tiers (high risk), terms changed often, custodial risk, taxable spending.
Kraken Card
Linked to reputable Kraken exchange, expected debit features. Visa Network (Expected). Limited Availability: Waitlist/Beta in US/Europe. Not widely released yet. Terms TBD. Custodial risk.
kraken.com/features/kraken-card
Verify availability before considering.
Binance Card
(Historically) Linked to large ecosystem, potentially low fees (w/ BNB). Visa Network. Limited Availability: Discontinued in EU/LatAm. Check current status elsewhere. Regulatory issues, custodial risk, promotes BNB.
Verify regional availability. Largely unavailable.
Uphold Card
Spend various assets (crypto, metals, fiat), crypto cashback rewards. Mastercard Network. (US/UK). Requires Uphold account/custody, potential conversion fees/spreads, reward crypto volatility.
Fintech / Lender / Rewards Cards
Gemini Credit Card
True Credit Card (Mastercard), earn crypto rewards (BTC etc.) on spending, no annual fee. (US). Requires Gemini account, rewards held custodially initially, subject to credit approval, standard credit card risks.
Fold Card
Bitcoin rewards focus ("Sat Back"), gamified variable rewards, spend USD earn BTC. Visa Network. (US). Variable rewards (luck), premium tier has fee, not spending crypto directly, requires funding USD.
Nexo Card
Credit (borrow) or Debit modes, earn interest on balance, rewards (NEXO/BTC). Mastercard Network. (Primarily EU/EEA). Credit mode = loan risks (liquidation), promotes NEXO token, custodial/lender risk, tax implications.
Wirex Card
Supports multiple fiat/crypto accounts, real-time conversion, crypto rewards (WXT). (UK/EEA/APAC). Fee structure complexity (tiers), custodial risk, WXT token volatility.
Crypto Card Best Practices & Warnings
// IV. Risks & Key Takeaways
Summary: Navigating Exchanges & Cards
Key Risks Recap:
- Custodial Risk: Exchanges & card providers hold your keys/funds. They can be hacked, go bankrupt, freeze accounts, or face regulatory action. Mitigation: Self-Custody.
- Fee Risk: Hidden fees (spreads, conversions) can significantly erode value. Always compare the effective exchange rate.
- Tax Complexity: Using crypto cards or frequently trading creates numerous taxable events in many jurisdictions. Record-keeping is essential but difficult.
- Volatility Risk: Prices can change dramatically, affecting spending power and the value of rewards.
- Counterparty Risk: You rely on the platform's solvency, security, and terms of service, which can change.
Key Takeaways:
- Prioritize Security & Self-Custody for long-term Bitcoin holdings. Use exchanges primarily as on/off ramps.
- Choose platforms with a strong reputation, transparent fees, and robust security.
- Understand that convenience often comes with tradeoffs in cost, control, and risk.
- Start simple, learn thoroughly, and always Do Your Own Research (DYOR) before using any platform or service.
// V. Terminology Glossary
Key Terms Defined
Quick definitions for common Exchange and Card terms.
- ACH (Automated Clearing House)
- An electronic network for financial transactions in the US, commonly used for bank transfers to/from exchanges (often low fee, but slower).
- AML (Anti-Money Laundering)
- Regulations requiring platforms to prevent money laundering, typically involves identity verification (KYC).
- Bid-Ask Spread
- The difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask). Wider spread = higher effective cost.
- CEX (Centralized Exchange)
- A traditional crypto exchange run by a central company, offering high liquidity but requiring custody and KYC.
- Cold Storage (Exchange)
- Exchanges storing the vast majority of user funds offline to protect against online hacks.
- Custodial
- A service where a third party holds your private keys/assets. Convenient but carries counterparty risk.
- DCA (Dollar Cost Averaging)
- Investing a fixed amount of money at regular intervals, regardless of the asset's price, often used for accumulating Bitcoin.
- Fiat Currency
- Government-issued currency not backed by a physical commodity (e.g., USD, EUR, JPY).
- KYC (Know Your Customer)
- Process where platforms verify customer identity to comply with regulations (part of AML).
- Liquidity
- The ease with which an asset can be bought or sold without significantly affecting its price. High liquidity is generally better.
- Maker Fee
- Fee paid by traders who provide liquidity by placing limit orders that don't fill immediately.
- Non-Custodial
- You control your own private keys (Self-Custody). P2P platforms like Bisq aim for this.
- On-Ramp / Off-Ramp
- Processes for converting fiat currency into crypto (on-ramp) or crypto back into fiat (off-ramp), typically via exchanges.
- P2P (Peer-to-Peer) Exchange
- Platform connecting individual buyers and sellers directly, often with more payment flexibility but lower speed/liquidity.
- Self-Custody
- Holding and controlling your own private keys using your own wallet software/hardware.
- Spread (Card/Simple Buy)
- A difference between the market price and the price quoted by a card provider or simple buy service, acting as a hidden fee.
- Staking (Card Context)
- Locking up a specific amount of a platform's native token (like CRO) to access higher reward tiers or benefits on their crypto card.
- Taker Fee
- Fee paid by traders who remove liquidity by placing market orders that fill immediately against existing orders.
- Taxable Event
- An action (like selling crypto, exchanging one crypto for another, or spending crypto via card) that may trigger capital gains or losses tax liabilities.
- TOTP (Time-based One-Time Password)
- A secure 2FA method using authenticator apps (like Google Authenticator, Authy) or hardware keys, preferred over SMS 2FA.