- >Ask CryptoVantage: What’s the Smallest Amount of Crypto You Can Buy?
Ask CryptoVantage: What’s the Smallest Amount of Crypto You Can Buy?
If you are looking to invest in crypto then you are likely wondering what the minimum you can buy is, especially if you are looking to invest over time and dollar cost average into the market. There are actually a few different ways to answer this question, as the scope of ways in which you can buy cryptocurrency has greatly increased as it has become more and more adopted into the mainstream.
Whether you are looking to buy Bitcoin, Ethereum, or any other altcoin, there are a few factors which determine the smallest amount you can buy. We will be looking at all of them in this edition of Ask CryptoVantage.
Evan Jones | Apr 20, 2021
The smallest unit of a Bitcoin is one Satoshi, or a hundred millionth of a Bitcoin, the value of which is currently less than one cent. Technically you can hold just one satoshi, but the trading fee for buying it would cost more than the purchase, so it would not be practical to do this, and in fact there is no exchange that would allow you to purchase just one satoshi at a time.
Because Bitcoin is divisible up to 8 decimal points, all altcoins have a Bitcoin value based on their dollar value compared to Bitcoin’s. Not all altcoins are themselves divisible to eight decimal places though, for example, Cardano’s token ADA is only divisible to 6 decimal places.
For more information about buying small amounts of Bitcoin be sure to check out Is it Worth Buying Bitcoin if I Only Have $10?
All cryptocurrency exchanges have a minimum amount of either fiat or cryptocurrency that you can buy, and the amount varies by exchange and cryptocurrency. For example, Coinbase has a $2 local currency minimum for a purchase of cryptocurrency. These minimums are in place because of transaction and mining fees. There is no incentive for the exchange to process transactions that cost them more to process than the transaction is worth.
At the same time, exchanges have a withdrawal minimum for cryptocurrencies and also charge a withdrawal fee, so purchasing an amount that is either less than the minimum withdrawal amount would mean you need to buy more, or purchasing less that the withdrawal fee would mean you cannot withdraw at all.
This does not mean you cannot buy a small amount of cryptocurrency at a time though, it is quite feasible and practical to just buy a small amount, whether $2, $5, $10, or $100 at a time. Then when you are ready to withdraw your assets to your wallet you can do so in a bigger chunk and save on fees.
Credit Card or Bank Transfer Minimums
If you are purchasing crypto directly with fiat, whether through a credit card or bank transfer, it is possible there will be a minimum purchase or transfer amount. This amount will vary by broker or exchange. Credit cards are less likely to have a minimum because they often charge you a flat % or $ fee for the purchase, so they get their cut either way.
Bank transfers are more likely to have a minimum for a withdrawal than a deposit but can have both. There is little incentive for the exchange to stop you from adding funds to your account, but when it is time to withdraw that is when they will take their cut.
Overall, there are quite a few factors that determine the smallest amount of crypto you can buy, but realistically you can buy as little as a few dollars at a time as long as you are not planning on sending it anywhere right away.