Using Bitcoin to buy gold is becoming a more popular option for investors, and the allure of potential anonymity adds to this trend. However, achieving total anonymity using Bitcoin is difficult due to regulations, the transparent nature of Bitcoin transactions, and the practices of many gold dealers.
Buying Gold with Bitcoin
Many online bullion dealers use Bitpay, which allows them to accept Bitcoin and other cryptocurrencies as payment methods. For buyers, Bitpay offers a secure wallet that allows users to store, manage, and spend digital assets. It also supports features like purchasing gift cards and integration with major exchanges.
- Speed: Bitcoin transactions are typically faster than traditional payment methods.
- Lower Fees: In some cases, Bitcoin use fees may be lower than bank or credit card fees.
- Diversification: Buying gold with Bitcoin allows diversification into two asset classes: a stable precious metal and a digital asset.
Using Bitpay to Buy Gold
Some online dealers support crypto purchases through the BitPay platform.
You can download the BitPay app (available for iOS, Android, or as a desktop version) and set up your account.
You can fund your Bitpay wallet to buy gold with Bitcoin or another supported cryptocurrency during setup. Once funded, the wallet will display your balance and allow you to manage your crypto funds.
Visit the online store of the precious metals dealer that supports BitPay. Browse their selection of gold products, whether you’re looking for gold coins, bars, or other forms of gold.
When you proceed to checkout, select BitPay as your payment option. The website will generate a QR code or a BitPay invoice for the transaction.
You can pay with Bitcoin or another supported cryptocurrency when you scan the QR code with your BitPay app or manually input the invoice information. After a few minutes, you can confirm the transaction on the blockchain.
After the payment is processed, the dealer will ship your gold products, usually within a few business days, with tracking provided via email.
Which Precious Metals Dealers Accept Bitcoin?
Some of the dealers that accept Bitcoin when buying gold are listed below
- APMEX
- SD Bullion
- Bullion Exchanges
- Silver Gold Bull
- Money Metals Exchange
- BGASC
- Provident Metals
- Bullion.com
- BullionStar US
- JM Bullion
- Golden Eagle Coins
- BullionMax
- Kitco
- and others listed in our Bullion Dealer Directory
Myths of Bitcoin Anonymity
Many believe you can use Bitcoin as an anonymous payment, but it’s essential to understand that Bitcoin transactions are not fully anonymous.
Every transaction is publicly accessible on a public ledger, or blockchain, which anyone can access.
While Bitcoin addresses don’t initially contain personal information, Know Your Customer (KYC) regulations require crypto exchanges to verify each user’s identity. All crypto exchanges are required to track all transactions.
Blockchain Traceability
Each transaction on the Bitcoin network leaves a permanent, transparent record on the blockchain. This transparency allows for public scrutiny. However, forensic blockchain analysis can link Bitcoin addresses to real-world identities, primarily if an individual has used a regulated exchange that requires identification.
The level of anonymity depends on factors like whether the dealer complies with Know Your Customer (KYC) regulations. Reputable dealers are often required to verify your identity, which compromises anonymity. Non-KYC platforms may have higher premiums, transaction limits, or additional risks like fraud.
Techniques like coin mixing and privacy wallets can enhance privacy, but they don’t guarantee complete anonymity and can potentially expose users to legal implications due to money laundering concerns.
Risks of Buying Gold with Bitcoin Anonymously
In the United States, some large gold transactions exceeding $10,000 must be reported. Dealers are required by law to submit IRS Form 8300 regardless of the payment method or if the combined amount of multiple purchases within 24 hours exceeds this amount. The infographic below from JM Bullion explains some of these transactions.
Infographic from JMBullion.com.
While there are opportunities to anonymously buy gold with bitcoin online, the risks of being scammed is extremely high. Anonymous crypto transactions can expose you to scams and counterfeit products. Once you send the payment, you cannot verify the authenticity of the seller or the piece unless you use a trusted escrow or other service platform.
Bitcoin and other crypto prices are more volatile than those of different securities. With the value of Gold and Bitcoin fluctuating, timing your purchase is crucial.
Not all dealers accept Bitcoin, which can limit your options when looking for competitive pricing.
While it is possible to buy gold with Bitcoin and remain relatively private, achieving complete anonymity is difficult. Careful consideration of legal, financial, and security aspects is essential for those who value privacy in their investments.
How to Buy Gold Anonymously
Buying gold with cash is the best way to remain anonymous. Many local coin shops (LCS) prefer cash transactions. Dealers at coin expos or shows are often willing to sell gold for cash.
Find a coin store or show in your area, bring cash, and negotiate directly with dealers. You can buy smaller amounts without the need for ID.
Keep in mind the limits on transactions apply due to regulations described above aimed at preventing money laundering and fraud.
Social Media Risks
Some investors look to places like Facebook Marketplace and Craigslist. However, fraudsters frequently post on these and other online forums, looking for their next victim. Always do your due diligence before buying from an unknown seller.
Buying from unknown people on social media, even when meeting in person, has a high risk of fraud, so verifying the gold’s authenticity before buying is essential.
Pawn Shops, Gold Stores, coin dealers, and bullion brokers all use special equipment, such as the Sigma PMV or an XRF machine, to test each piece prior to buying, selling, or trading. This is standard practice in the industry and helps assure authenticity.
While there are other ways to test the authenticity of gold, transacting with people you only know after first verifying the authenticity of the metal carries substantial risk.
Some of the risks in these types of transactions can be mitigated by having a relationship with a trusted local coin shop or jeweler that will allow you to use their shop while conducting the transaction to verify the authenticity.