The Beginner’s Guide to Buying Large Amounts of Bitcoin

Last Updated: 3/25/19

The standard methods used by most people for buying Bitcoin aren’t always suitable for high volume purchases, due to high transaction fees and a limited supply of Bitcoin on exchanges. Moreover, some investors wish to stay under the radar and not drastically affect Bitcoin’s price by placing large ‘Buy’ orders. This guide will show you the most cost effective ways to buy Bitcoins in large amounts (i.e. exceeding $100,000).

Post Summary

Buying large amounts of Bitcoin requires a different approach than the “normal” day to day exchange. There are specific Over The Counter (OTC) exchanges that deal with clients looking to place large order so you’ll be able to get the best price.

In this post I’ll go over the most popular once, here’s what I’ll cover:

  1. OTC vs. Traditional Exchanges
  2. Bitcoin OTC Exchanges
  3. Traditional Exchanges Suited for Large Purchases
  4. Conclusion

1. OTC  vs. Traditional Exchanges

The two main options you have for buying large amounts of Bitcoin are OTC exchanges (OTC = over the counter) or traditional Bitcoin exchanges. OTC exchanges refer to companies or individual willing to sell you Bitcoins directly and not through a regulated and automated trading platform.

OTC exchanges benefits

High liquidity – OTC companies specialize in supplying high volumes of Bitcoin for large buyers such as institutional investors. This means that most of the time you will be able to get your order fulfilled in full, faster than on a traditional exchange.

Fixed price – When you buy large amounts of Bitcoin on a public automated exchange you will probably see the price rise as your order is being executed. This is due to the fact that once you finish buying from the “cheap” sellers, you gradually move to the “expensive” sellers. This means you don’t have a fixed price for your purchase. When you use an OTC exchange you can negotiate a fixed price (e.g. “Bitstamp rate + 1%).

OTC exchanges disadvantages

Less transparency – While on a traditional exchange the order book is transparent for everyone to see, when buying Bitcoins OTC you don’t know exactly who you’re dealing with or the volume that they have to trade. You are basing your information solely on what you get from the seller.

Less regulation – Buying OTC means that there is less regulation involved since many of the OTC sellers aren’t listed as money transmitters, hence the risk with these transactions increases.


2. Known Bitcoin OTC exchanges

Having listed the various pros and cons of using OTC exchanges, let’s go over some of the more known OTC exchanges in the Bitcoin economy. Most of these services require you to apply and are not open for the general public.

Circle

Circle is one of the earliest players in the game. In the past, the company was a direct competitor to Coinbase, selling Bitcoins to individuals, however in the last few years it has rebranded several times and now offers a range of products. They have also acquired the cryptocurrency exchange Poloniex.

Circle Trade is the company’s OTC service which accepts Buy and Sell orders, starting from $250K. The service trades over $2b each month and has desks in several time zones.

ItBit

ItBit is a well known Bitcoin exchange, funded in 2013. It is a regulated exchange in the US that supplies Bitcoin exchange services for small and institutional investors. ItBit for institutions is the full-service financial services company for institutions who are trading in Bitcoin. The Institutional Client Group (ICG) provides institutions and active traders with personalized service and support.

ItBit’s OTC trading is a personalized service for orders over $100K that has low fees and a quick settlement. Itbit states that its OTC market has very competitive pricing, which makes it very attractive considering it’s also a regulated exchange.

Genesis

Genesis  is an institutional trading firm offering two-sided liquidity for digital currency, including Bitcoin and Ether. Since September 2013, Genesis has traded over 1,500,000 Bitcoin (BTC), worth over $600 million US Dollars, and has completed thousands of trades.

The company has a minimum trade size of $75K. Unlike some other OTC exchanges, Genesis is regulated by FINRA and the SEC. They have also submitted their request for a Bitlicense in the state of New York.

Cumberland mining

Cumberland Mining offers competitive pricing for institutional size Bitcoin transactions. They supply liquidity to some of the major traditional Bitcoin exchanges as well. There’s not much info on the company’s website, however, Coindesk has researched it in the past and they have also partnered with Tradeblock. A minimum trade order with Cumberland is $100K.

Athena Investor Services

Another OTC Bitcoin exchange, Athena Investor Services (or AIS) launched in late 2017. It is a high-touch OTC trading platform that allows people in the United States to buy and sell between $10,000 and $500,000 in Bitcoin, Bitcoin Cash, Ethereum, Litecoin and Ripple.

Payment is made via wire transfer, and the cryptocurrency is typically sent within a couple of hours, but can take up to 12 hours, depending on how long the user takes to complete the onboarding process.


3. Traditional Exchanges Suited for Large Transactions

If you want to use traditional automated and regulated Bitcoin exchanges to buy large amounts of Bitcoin, there are several exchanges that are suited for that purpose.

Coinbase and Coinbase Pro

Coinbase is one of the leading Bitcoin companies today. There are two options for you to buy large amounts of Bitcoins through Coinbase: One is Coinbase’s brokerage service and the other is Coinbase Pro (Coinbase’s trading platform).

Coinbase brokerage service – If you’re a fully verified member, you can buy up to $25,000 Bitcoins per day, directly from Coinbase’s brokerage service . Even though the price is very close to the market price, Coinbase will take 1% of these transactions which is relatively expensive.

Coinbase Pro (Coinbase exchange) – There are no limits to how many Bitcoins you can purchase on Coinbase Pro. When you place an order at the market price that gets filled immediately, you are considered a taker and will pay a fee between 0.10% and 0.25%. If, however, you place an order which is not immediately matched by an existing order, you are considered a maker and your fee will be 0%.

Bitstamp

The oldest Bitcoin exchange around, Bitstamp currently has a relatively large trading volume. Deposit fees are as low as 0.05%, and depending on your trading volume you will pay a transaction fee between 0.25%-0.1%. If you are using SEPA to transfer your money, you won’t be charged any deposit fees. You can read my complete Bitstamp review here.

(On a personal note, I use this method to buy large amounts of coins)

Kraken

Founded in 2011, San Francisco-based Kraken is the largest Bitcoin exchange in Euro volume and liquidity, also trading Canadian dollars, US dollars, British pounds and Japanese yen. Kraken has similar trading volume to Bitstamp. Kraken fees are calculated on a maker-taker module similar to Coinbase Pro. The fees vary from 0%-0.26%, depending whether you’re the maker or the taker. You can read my complete Kraken review here.


4. Conclusion

Bitcoin is in its infancy and the options to buy large amounts of it are still somewhat limited. However, the services listed above will give you a more than fair solution for this situation. Regulated exchanges will give you a more automated process while OTC exchanges will allow you to stay under the radar.

Once the trade is complete, make sure you have a safe place to store your newly bought Bitcoins, such as a hardware wallet or a paper wallet. You wouldn’t want all of this hard work to go to waste….

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Bryan
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Bryan

Very informative article!
I’d also like to add Changelly to your list.
Changelly is a non-custodial instant cryptocurrency exchange, which means that no users’ funds are placing in the service. Changelly acts as an intermediary between crypto exchanges and users, offering access to 140+ cryptocurrencies. The company mission is making the exchange process effortless for everyone who wants to invest in cryptocurrency. Operating since 2015, the platform and its mobile app attract over a million visitors monthly who enjoy high limits, fast transactions, and 24/7 live support.

Taxman
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Taxman

Problem with Coinbase is that you are limited to a cumulative $100,000 USD Deposits and Withdrawals combined for the entire year. So if you deposit 100K in one day or week, you would have to wait an entire year to withdraw money or deposit more. In other words the max amount you can with draw is lowered by the amount of deposits you have made. It’s a nickel and dime exchange for that reason. While you’re locked out of your cash the market can crash and it’s just too bad for you.

wallace hershberger
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wallace hershberger

I did a high volume buy with itbit for about 23 btc. They were quick to approve my account, answered verification questions and then sent me an email to that effect. I went into my bank and proceeded to do a wire transfer. Wire complete and about 6 hrs later( very nerve racking time frame) i got an email stating that my money had deposited. I tried to do a withdrawal , after waiting for about 4 hours and not seeing any broadcast to the blockchain, i checked my email and i got this message from itbit SEP 25, 2017… Read more »

Bart
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Bart

Hey Ofir, pretty extensive article. Setting up a fixed price in such high volume transaction is a huge plus that in my opinion outweighs the disadvantages. Saying so, it’s nice that you’ve listed some trusted exchanges. Great job and keep it up!