How to Buy Solana in the US: SOL Buying Guide!

As we usher in 2024, the cryptocurrency landscape is witnessing a paradigm shift, with Solana (SOL) emerging as a formidable contender in the digital asset arena. The start of the year marked a pivotal moment for Solana, reflecting a resurgence in its market value and a significant leap in its technological and community development.

The Solana Foundation's announcement of its ambitious roadmap for 2024 has electrified the cryptocurrency community. This roadmap underscores Solana's commitment to innovation, focusing on enhancing developer engagement and scaling the network's capabilities. With over 2,500 active developers contributing to its ecosystem, Solana has demonstrated a remarkable 50% increase in developer retention, outpacing many of its contemporaries​​.

This surge in Solana's ecosystem is not just limited to developer activity. The network has experienced a dramatic 500% price rally, momentarily surpassing even Binance's BNB token in market capitalization. Such a meteoric rise can be attributed to the burgeoning interest in SOL-based memecoins and a spike in decentralized exchange volumes, which, at one point, even exceeded Ethereum.

Amidst this backdrop, Solana's price trajectory has been equally impressive. The SOL token, which had plummeted from over $200 in 2021 to under $10 in 2022, has remarkably buoyed back above $100. This price recovery is a testament to the growing confidence in Solana's ecosystem with new token listings and an influx of innovative projects such as JITO and BONK on prominent platforms like OKX.

For investors in the United States looking to tap into this burgeoning crypto asset, understanding Solana's unique value proposition and its potential trajectory in 2024 is crucial. Whether you are a seasoned crypto enthusiast or a newcomer to the digital asset space, this guide aims to demystify the process of buying Solana in the US, offering insights into the latest trends, technological advancements, and strategic investment approaches in the Solana ecosystem. 

Factors to Consider While Buying Solana (SOL)

When considering the purchase of Solana (SOL), it is essential to evaluate several critical factors, some of which are common across all cryptocurrencies, while others are unique to the Solana ecosystem:

1. Reason for Ownership:
   • Price Potential: Many investors buy Solana anticipating an increase in its value, driven by its growing ecosystem, increased developer activity, and technical advancements. This speculative approach considers Solana's historical price trends and potential for high returns.
   • Asset Ownership: Solana is also viewed as a digital asset to hold as part of a diversified investment portfolio due to its unique features, such as high throughput and low transaction costs.
2. Cost:
   • Trading Costs: Trading Solana incurs costs such as commissions and spreads on exchanges. These costs can be significant for active traders. For users sending SOL peer-to-peer or interacting with DApps, Solana is subject to network fees.
   • Non-Custodial vs. Custodial Ownership: Solana can be held in non-custodial wallets (where you control the private keys) or custodial platforms (like exchanges). Each has varying degrees of operation costs and asset control.
   • Downside Hedge: Traders may seek futures as a low-cost investment strategy to limit their downside with leverage. While derivatives can potentially multiply gains, they also expose the trader to heightened risk.
3. Duration of Investment:
   • Long-Term Holding: For long-term investment, storing Solana in wallets, especially hardware wallets, for enhanced security is advisable.
   • Short-Term Trading: For short-term trading, using exchanges that list SOL provides liquidity and ease of trading. Centralized exchanges offer user-friendly interfaces, while decentralized exchanges offer direct wallet-to-wallet trades.
   • You can find a breakdown of the best crypto exchanges on Coin Bureau.
4. Security:
   • Solana's security aspects are crucial, considering both the security measures of the exchanges where it's traded and the wallets where it's stored to the security of the Solana network itself. While exchanges offer convenience, they can be vulnerable to hacks. Personal wallets provide more control but require the user to manage their security.
5. Privacy:
   • On-Chain Transactions: Solana's direct, on-chain transactions offer more privacy, as they are recorded on the blockchain without revealing personal identities.
   • Off-Chain Transactions: Buying Solana via centralized exchanges usually involves less privacy, as these platforms often require personal identification for regulatory compliance.
6. Technical Knowledge About Cryptocurrencies:
   • Limited Knowledge: Investors with limited knowledge about blockchain technology might prefer using user-friendly centralized exchanges or investment apps to buy and hold Solana.
   • Sound Technical Knowledge: Those comfortable with blockchain technology might opt for direct wallet management and may engage in staking Solana, given its proof-of-stake consensus mechanism.
7. Ecosystem and Development Activity:
   • Given Solana's strong focus on developer engagement and its robust ecosystem growth, investors should consider the platform's health and the community's activity. The number of active developers and projects being built on Solana can be a key indicator of its potential growth.
8. Staking Opportunities:
   • Solana's proof-of-stake consensus mechanism offers staking opportunities. Investors can earn rewards by staking their SOL tokens, an essential consideration for long-term holders.

In conclusion, buying Solana involves carefully considering your investment goals, cost sensitivity, intended investment duration, need for security and privacy, and understanding the Solana ecosystem. Each method of buying and holding Solana has advantages and risks, making it crucial to align your choice with your overall investment strategy and risk tolerance.

Guy has put together this great video on Solana that can help you learn more about it:

Where to Buy Solana in the US

Residents of the United States have several Solana exposure avenues at their disposal today. We have curated a list of routes to buy Solana from and matched it with several ideal investor profiles for each method. All you need to do now is to find a profile that best describes your preferences.

Financial Apps (PayPal and Venmo)

These apps allow users to buy, hold, and sell Solana. They are incredibly user-friendly and cater to individuals who are already registered users and familiar with these platforms for other financial transactions. However, these platforms do not offer true ownership of cryptocurrencies; users cannot transfer the SOL out of their accounts and many of them come with higher-than-average fees.

Ideal Profile: Casual investors or beginners in cryptocurrency focused on price potential. Due to its ease of use, it is best suited for short-term trading, but it has limited functionality regarding actual asset ownership and higher trading costs.

Centralized Exchanges (Coinbase and Kraken)

Centralized exchanges are popular platforms for buying, selling, and trading Solana. They offer liquidity and a range of trading options that are relatively easy to use. CEXs balance security (through regulation) and convenience but may have higher fees and less privacy.

Ideal Profile: Investors interested in both short-term trading and long-term holding. It is suitable for those with some technical knowledge who value security and ease of trading. It suits investors considering cost, downside hedge, and don’t mind non-custodial ownership. Most CEXs also offer withdrawals to custodial wallets to retail complete ownership.

Coinbase

Coinbase is the largest and the most popular crypto exchange in the US. It was the first crypto company to go public and list its shares on the US stock exchange. Coinbase is also known for its commitment to regulation in operating by the book.

Coinbse is an excellent option for buying cryptocurrencies in the US because of its simple and beginner-friendly UI, and it is an ideal option for those looking to store crypto in their exchange accounts for longer times. Find more about the exchange in our Coinbase Review.

Kraken

Kraken is another great place for trading cryptocurrencies in the US. Kraken is considered the most secure crypto exchange and is the only one not to suffer from security exploits. It is beginner-friendly while also providing advanced trading options to its users.

Kraken is highly dependable, registered in the US and charges competitive fees, making it an ideal alternative to Coinbase for buying cryptocurrencies in the US. The Kraken Review on Coin Bureau will get you more details about the exchange.

Trading Apps like Robinhood & eToro

Trading apps are similar to financial apps with a focus on investments and trading. Platforms such as eToro have become a global giant thanks to their user-friendly design and multi-asset offerings and their popular copy trading product.

Platforms like Robinhood and eToro are great for investors who want to diversify their portfolios on one platform as they offer precious metals, stocks, ETFs, crypto and more all in one convenient location.

We have an eToro guide if you would like to learn more about it and our eToro US sign-up link offers a free $10 crypto airdrop bonus!

Disclaimer: Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.

Cryptocurrency ATMs

In some major US cities, specialized cryptocurrency ATMs allow the purchase of Solana using cash. This method requires a Know Your Customer (KYC) process and is ideal for those who prefer physical transactions or lack access to traditional banking services. However, it's less common and might involve higher transaction fees.

Ideal Profile: Users seeking immediate, private transactions without technical knowledge. Suitable for small-scale investors focused on asset ownership and willing to bear higher costs for convenience.

Decentralized Exchanges

For those who prefer a more hands-on approach and greater control over their transactions, decentralized exchanges (DEXs) offer direct wallet-to-wallet trades of Solana without intermediary control. This method is ideal for users with a good understanding of blockchain technology and who value privacy and control over their trades.

Ideal Profile: Technically savvy investors seeking non-custodial ownership and valuing privacy. It is ideal for those who understand the intrinsic value of digital assets and are comfortable with the risks associated with lower regulation and potential security concerns.

We will cover some decentralized exchanges for consideration further on.

Ideal Investor Profiles

Here we will cover the general types of users based on intent and the common choices for each.

• Price Potential: For those strictly interested in price potential as an invisible asset, Centralized Exchanges, Financial Apps, and Trading Apps offer the easiest exposure.
• Asset Ownership: For anyone primarily interested in self-sovereignty and physical ownership, Decentralized Exchanges with self-custodial wallets will be the way to go. This is the digital equivalent of buying and holding your own gold vs investing in a Gold ETF on a financial app.
• Cost Sensitivity: Centralized Exchanges for lower trading costs or financial apps with low brokerage costs will often provide the lowest fees for frequent trading. Decentralized Exchanges on low-cost networks like Solana can also offer trade execution at low costs.
• Investment Duration: For those looking to store their crypto assets long-term we recommend using Hardware Wallets post-purchase. For those not interested in self-custody, financial apps such as eToro offer insurance on assets, making them better for long-term storage than some centralized crypto exchanges that do not offer insurance. 
• Security Concerns: Regulated Centralized Exchanges and financial apps are third-party custodians best suited for users who are concerned with the security that comes with regulation. Personal wallets are best for those more concerned with security vulnerabilities that come with third-party risk.
• Privacy Preference: Decentralized Exchanges with self-custodial wallets that support on-chain privacy will be best for those who prefer privacy. 
• Technical Knowledge: Limited (Financial Apps, Centralized Exchanges), Advanced (Decentralized Exchanges, Direct Wallet Management)

Each method offers unique benefits catering to different investor needs and preferences. Investors must align their choice with their investment goals, risk tolerance, and level of comfort with cryptocurrency technologies.

How to Buy Solana

This section will explain the steps to buy Solana from the abovementioned sources.

How to Buy Solana on Financial Apps

Here is a step-by-step guide on how to buy Solana on PayPal Web platform:

• Click Finances: Log in to your PayPal account and click on the "Finances" section.
• Click Buy: In the Finances section, find and click on the "Buy" option.
• Choose a Cryptocurrency: Select the type of cryptocurrency you want to buy (e.g., Solana).
• Select Amount and Frequency: Choose the amount you want to buy and the frequency of purchase (Daily, Weekly, Biweekly, or Monthly). The frequency will default to One-time if not specified.
• Choose Payment Method: Select your preferred payment method (PayPal balance, a PayPal-linked debit card, or bank account) and tap "Next".
• Confirm Purchase: Click "Buy Now" to finalize the transaction.

Note: The PayPal mobile application also follows similar steps.

Buying Solana on Centralized Exchanges

Buying Solana on Centralized Exchanges involves typical steps like registering with the exchange and completing their KYC norms to verify your identity. Once verified, you can deposit funds and start trading cryptocurrencies. CEXs offer a myriad of deposit options, ranging from fiat to crypto. We have dedicated reviews and guides for the top centralized exchanges and platforms available in the US. Check them out for more information:

• Coinbase Review
• Kraken Review
• eToro trading guide

Buying Solana at Cryptocurrency ATMs

Buying Solana (SOL) via a cryptocurrency ATM involves a series of steps, similar to purchasing Bitcoin. Here's a step-by-step guide tailored for Solana:

Step 1: Locate a Solana ATM

• Find an ATM: Use a service like CoinATMRadar to locate a Solana-compatible ATM near you. Check the ATM’s details, including location, hours of operation, and supported transactions.

Step 2: Prepare for Your Transaction

• Solana Wallet: Ensure you have a Solana wallet set up. This could be a mobile wallet, a hardware wallet, or a paper wallet. Your wallet's QR code is crucial for receiving Solana.
• Identification: Some ATMs may require identification to comply with KYC regulations. Be prepared with a government-issued ID or, in some cases, a phone number.
• Cash: Most cryptocurrency ATMs accept cash. Bring enough to cover your Solana purchase and any applicable transaction fees.

Step 3: Begin the Purchase Process

• Identity Verification (if required): Follow the ATM’s instructions for identity verification, which may include scanning your ID or entering a phone number.
• Scan Wallet QR Code: Use the ATM’s scanner to read your Solana wallet’s QR code. This ensures the Solana you purchase is sent to the correct address.
• Insert Cash: Feed the required amount of fiat currency into the ATM’s cash acceptor.

Step 4: Finalize Your Transaction

• Confirm the Amount: Double-check the amount of cash and the equivalent Solana you’re set to receive. Be aware of the exchange rate and the ATM’s transaction fees, which can be higher than online exchanges.
• Complete the Purchase: Confirm the transaction on the ATM. The machine will process the transaction and dispense Solana to your wallet address.
• Transaction Receipt: Collect the printed receipt, if provided. This receipt includes transaction details like the amount of Solana purchased and the wallet address to which it was sent.

Step 5: Confirm Receipt of Solana

• Check Your Wallet: Solana transactions are generally swift, but it may take a short time to confirm the transaction on the blockchain. Ensure the Solana has arrived in your wallet.

Additional Considerations

• Privacy and Anonymity: Levels of privacy vary across ATMs. Some may require no personal information, while others require ID verification.
• Transaction Limits: Be aware of the ATM’s buying limits, which can vary.
• Fees: ATM fees are generally higher than those charged by online exchanges, ranging from 5% to 15% or more.
• Support: In case of issues, use the ATM’s provided contact information for assistance.

Final Note

• Safety Precautions: Always use ATMs in safe, public locations. Be aware of your surroundings, particularly if carrying significant amounts of cash.

Cryptocurrency ATMs offer a convenient, albeit sometimes more costly, way to purchase Solana, particularly for those who value privacy or prefer using cash. Be sure to understand the process and fees involved before using a cryptocurrency ATM for the first time.

Buying Solana (SOL) on Decentralized Exchanges (DEXs)

Purchasing Solana on a decentralized exchange (DEX) involves a different process than centralized platforms. Here's a step-by-step guide:

Step 1: Choose a Decentralized Exchange

• Select a DEX: Choose a decentralized exchange that supports Solana, such as Raydium or Orca.

Step 2: Set Up a Compatible Wallet

• Create a Wallet: If you don't already have one, create a wallet compatible with Solana, like Phantom. Ensure it supports the DEX you've chosen. We've curated a list of the Top Solana Wallets if you are in need.
• Transfer Funds: Transfer a cryptocurrency (like stablecoins) into your chosen wallet. This will be used to swap for Solana on the DEX.
• Tip: Take your pick from the five best hardware wallets in 2024.

Step 3: Connect Your Wallet to the DEX

• Access the DEX: Navigate to the DEX's website.
• Connect Your Wallet: Look for a "Connect Wallet" or similar button and follow the prompts to connect your wallet to the DEX.

Step 4: Swap for Solana

• Choose the Trading Pair: Select the cryptocurrency you wish to swap from and choose SOL as the currency you want to receive.
• Enter the Amount: Specify how much you want to swap. The DEX will show you the amount of SOL you'll receive based on the current exchange rate.
• Confirm the Swap: Review the transaction details, including any fees, and confirm the swap.

Step 5: Confirm the Transaction in Your Wallet

• Approve the Transaction: A prompt will appear in your wallet, asking you to approve the transaction. Confirm the details and approve it.
• Wait for Confirmation: The transaction will be processed on the blockchain. This may take a few minutes.

Step 6: Verify Receipt of Solana

• Check Your Wallet: Once the transaction is confirmed, check your wallet to ensure the Solana (SOL) has been received.

Additional Tips

• Slippage: Understand and adjust the slippage settings if necessary. Slippage is the difference between the expected price and the executed price of a trade.
• Network Fees: Be aware of network fees (gas fees) that apply when conducting transactions on a DEX.
• Liquidity: Ensure there is sufficient liquidity for the trading pair you are using to avoid significant price impact.
• Security: Always double-check URLs and be cautious of phishing sites. Use only well-known and reputable DEXs.

For more information on the Solana ecosystem, be sure to check out our article on the Top Solana DApps.

Final Considerations

• Do Your Research: Familiarize yourself with the DEX and its features before transacting.
• Security Measures: Keep your wallet secure, and never share your private keys or seed phrases with anyone.
• Market Volatility: Be aware of market conditions, as decentralized exchanges can experience rapid price fluctuations.

Buying Solana on a DEX gives you control over your trades and can offer more privacy than centralized exchanges. However, it requires more technical knowledge and awareness of the risks involved in decentralized trading.

What are the Fees to Buy Solana? 

Here is a table comparing the fees associated with buying Solana from the above sources. Remember that fees should not be your only factor while considering buying Solana. Investors must also weigh the value of privacy and ownership with fees to find the best source for their preferences.

Note: The fee structure is derived from information available in January 2024 and is subject to updations. Investors are advised to check the latest value before making any financial decisions.

Best Places to Store Solana

The best places to store Solana depend on your individual needs for security, accessibility, and control. Among the options mentioned earlier, only on-chain storage offers complete autonomy over where to store your Solana. This method allows for full control of your private keys and, consequently, your assets. By now, you likely have a clearer picture of your preferred storage option based on your requirements and risk tolerance. 

If you've decided on on-chain storage, numerous resources are available to guide you. For example, Coin Bureau offers insights on the best hardware wallets, which can provide robust security for your SOL. Coin Bureau also covers the best Solana wallets as well.  Remember, the choice of storage should align with your security needs and ease of access preferences.

Crypto Tax in the US

In the U.S., Solana, Bitcoin and other cryptocurrencies are treated as property for tax purposes, according to the IRS. This means that they are subject to capital gains tax. When you sell, trade, or otherwise dispose of Solana, you must report the capital gain or loss. The amount of tax depends on how long you held the SOL (short-term for less than a year, and long-term for more than a year) and your income tax bracket. 

Additionally, receiving SOL as payment or staking it is taxable as income at its fair market value. It's important to keep detailed records of transactions to accurately report and calculate potential taxes, so we recommend using a crypto tax software to help track all your transactions and tax obligations.

For comprehensive and specific guidance, it's advisable to consult the IRS website or a tax professional.

How to Buy Solana in the US: Closing Thoughts

As we wrap up this guide on buying Solana in the U.S., it's important to recognize the multifaceted nature of investing in this dynamic digital asset. From understanding the different purchasing avenues like centralized and decentralized exchanges, financial apps, and direct blockchain transactions, to considering the implications of regulatory compliance, each method of acquiring Solana has its distinct features, costs, and security aspects. Crucially, the secure storage of your Solana, whether through hardware wallets or other secure means, is essential for the protection of your investment.

This guide has been crafted to educate and lay a foundation for understanding the platforms and avenues for buying Solana in the US. This content cannot be considered financial advice, nor is it an endorsement by the Coin Bureau to buy Solana. Your investment decisions should be based on thorough research and, if necessary, consultation with financial experts. Stay informed and approach your Solana investment journey with careful thought, fully understanding your investment objectives and risk tolerance.