Buying a Bitcoin Update: The Cryptocurrency is Pending

Jacob Harper |

Readers may recall an article published on this website not two days ago, in which we embarked on a foray into the world of bitcoin, in order to show how the average investor with little to no knowledge of the cryptocurrency goes about throwing money into this nascent market. Now, as we get “approved” to invest in bitcoin, we’re checking in to provide a couple updates and some observations on the process.

Choosing Your Changer

As we discussed in our first post, bitcoin lacks a central bank and thus a codified manner of exchange. This makes for an interesting investment process, to say the least (more on the bitcoin market’s idiosyncratic nature later.) Though there are myriad options, we identified three leaders for buying into bitcoin: Mt. Gox, Bitstamp and Coinbase. All have their advantages and disadvantages, and as with any subculture, their vociferous proponents and detractors. In the end we chose San Francisco's Coinbase, which we liked for only requiring us to provide a phone number and a bank account to start trading.

After signing up, we had to wait two days while Coinbase deposited two separate small sums into our bank account before withdrawing them. After the deposits were completed, we went back into or Coinbase “wallet” in order to finalize the verification process, and then we were confirmed. We were officially ready to buy bitcoin.

Buttonwood 2.0

After being verified, we made our first purchase order for one bitcoin at $126.44 US dollars. Coinbase tacked on a percent in fees in addition to a 15 cent “bank fee,” bringing our total to $127.85 for one bitcoin.  We got a message saying our bitcoin would be delivered later that day. Three hours later, it is still “pending.”

The slowness of the exchange into bitcoin certainly makes for an interesting trading experience. While our price is locked in, there’s something peculiarly old-fashioned about the distance between a trade and its completion, remeniscent of how Wall Street functioned prior to the Buttonwood Agreement.

This is not a knock on bitcoin, just an observation that like any young market, it still lacks the built-in trust and fluidity of a developed currency. But that friction exists mainly in getting into and out of bitcoin, which, aside from scattered person-to-person cash-for-bitcoin exchanges, involves a lengthy process.

So getting in and out is a little more difficult. But as far as trading within the bitcoin market, that is, speculating on bitcoins with bitcoins... well, that is as fast as any other trade executed on a computer: instantaneous. Which means the professional, old money speculators should be getting involved any time now.

An Emerging Market by Any Other Name

Bitcoin has a very emerging market feel, where boom and panic are neighbors and volatility isn’t a bug – it’s a feature. When speaking to Financial Times, Josh Rossi perhaps put the state of bitcoin best when he said,“(Bitcoin) is a hot tech start-up, mixed with emerging markets, mixed with gold, mixed with forex [foreign exchange]. It’s a gold rush. It’s a land-grab. It’s the Wild West. There’s going to be a Goldman Sachs in this economy. If you build a better mousetrap, you could be a millionaire.”

We’re not trying to be a millionaire, but we are trying to get our bitcoin (still pending.) Once we’re in, we’ll be checking back in with more on the “Wild West” digital currency market.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


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