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Bitcoin, the largest and most popular cryptocurrency in the world, has certainly established itself as a desirable advantage for commerce. Reaching a high historical value of $ 20,000 in January 2018, the first and most important digital currency in the market has gained popularity. Trading Bitcoin (BTC), however, comes with many specifications. Below we take a closer look at the most important things you should consider if you decided to enter the world of Bitcoin trading.
What is Bitcoin
We have analyzed in depth Bitcoin (BTC) and the way it works in a dedicated guide that you can take a look at here.
In simple terms, Bitcoin is a peer-to-peer distributed digital currency that can be transferred almost instantly and securely between two parties, regardless of their current location.
Bitcoin (BTC) uses public-key cryptography, as well as proof-of-work (PoW) algorithm to process and verify payments.
It is not the only existing cryptocurrency. Others include Bitcoin Cash, Litecoin, Monero, Zcash and so on. Bitcoin Cash (BCH) is a digital currency that is the result of a hard fork of the Bitcoin network.
Why exchange Bitcoin?
Bitcoin trading has some advantages and disadvantages, so to speak. Naturally, as a highly volatile activity, it involves many risks. Investing more than you can afford to lose is never a good idea, and the same is true for cryptocurrency trading. Online trading, however, has become incredibly accessible and it is worth pointing out the advantages and disadvantages of the market.
Disadvantages of Bitcoin trading
Limited historical data
While Bitcoin (BTC) has been around for almost a decade, most of the cryptocurrencies remaining on the market have limited historical data available.
Therefore, it is difficult to create accurate and data-driven technical analyzes, since it is difficult to follow trends and levels of momentum, support and resistance and, in general, general models. While there are many different trading tools, the limited historical information makes it a little more challenging, especially for the retail investor, to be involved successfully.
High volatility
While it is difficult to classify high volatility as a disadvantage, it poses a serious amount of risk. Losing your money is undoubtedly possible, especially when it comes to margin trading.
This is the main reason why countries like Japan have proposed to limit margin trading in order to protect serious investors as well as retail investors.
Lack of legislation
Governments around the world are struggling to find the right approach to put cryptocurrencies within a certain regulatory framework.
The uncertainty about how the legislators will deal with Bitcoin (BTC) and other cryptocurrencies, is something that could prevent institutional investors from entering the market.
Advantages of Bitcoin trading
Diversify your investment portfolio
If you start trading and investing in Bitcoin, you can balance your wallet. Given the volatile nature of the industry, you can also hope to quickly increase the total value of your investments.
Although the cryptocurrency market has entered a prolonged bearish market in 2018 and prices are currently depreciating, volatility allows it to recover its losses quickly.
Of course, once again, it is important to note that you need to consider the risks and invest only how much you can afford to lose.
Bitcoin is becoming popular
As the world's leading cryptocurrency continues to grow in popularity, it is logical that demand also increases. Due to the limited supply of Bitcoin, as demand exceeds supply, the price should grow accordingly. So, if you want to invest in Bitcoin, it might be a good thing to consider its adoption increasingly widespread as a strong merit.
There are over 4,000 Bitcoin ATMs around the world and you can virtually buy Bitcoin at any railway station in Switzerland. France has also recently announced that tobacco stores will allow users to buy cryptocurrency.
Issues related to institutional money
As mentioned earlier, Bitcoin (BTC) and the entire cryptocurrency market in general are still in a fairly nascent stage. So, it might be safe to say that institutional money has yet to come on the scene.
And we could only be witnesses of the institutions that set the tone. The Intercontinental Exchange (ICE), owner of the New York Stock Exchange (NYSE), in collaboration with control companies such as Starbucks, Microsoft and others, has joint forces on a Bakkt cryptocurrency solution, which will be launched later in December regulatory approval – a solution that many experts believe paves the way for institutional investments.
It is essential to outline that Bitcoin trading is a risky venture and presents the risk of losing funds. So, you should consider a complete trading guide or trust a professional if you want to start trading. Alternatively, you can take advantage of trading signals available on a range of different trading platforms, which require you to rely heavily on someone else's skills or an algorithm.
How to buy Bitcoin
The purchase of bitcoins has become particularly easy. There are many ways you can do it. You can consult our detailed guide on how to buy cryptocurrencies and explore the methods you can take advantage of. In short, you can buy and sell Bitcoin with the following payment methods:
- Online payment processors such as PayPal and Skrill
- Through the cryptocurrency exchanges by bank transfer / credit card or debit card
- Cash
Like Daytrade Bitcoin
To understand how to make the bitcoin for the daytrade, you must first be aware of the concept of the term.
Daily trading is generally defined as the process of buying and selling an asset on a single trading day. This can take place on different types of trading platforms.
In most cases, daily traders are well funded and well educated – they use complex technical analysis to place and close their trades at the exact time. Thus, daytrading is generally not advisable for the novice retail investor who does not have the necessary knowledge and experience in the field.
There are some features of a day trader. These include:
In theory, anyone can daytrade Bitcoin. However, experts tend to have sufficient capital to adequately capitalize intraday price movements.
- Sufficient knowledge and experience
Daytraders include complex technical analysis. In addition, they use a range of different trading tools to be effective.
A day trader must have an advantage over the rest of the market. There are several types of strategies that expert traders use such as arbitrage and swing trading.
How to choose the best Bitcoin broker
There are a few things you need to consider when it comes to finding the best Bitcoin broker. There are many bitcoin brokers on the market and, therefore, narrowing the list to the best would require some reading.
There are some key factors to consider when choosing the best Bitcoin broker.
Just like in real estate, it's all about location, location, location. Knowing your country and determining whether or not encryption restrictions exist is particularly important. You may have found the best Bitcoin broker in terms of functionality, as well as the trading tools offered, but if it does not work in your region it would not be positive.
In addition, you need to check if you can buy Bitcoin with your own currency or if you need to convert it as this may require the payment of certain trading fees, which brings us to the next point. Controlling the verification process is something you should do first.
The main thing you would do on the Bitcoin trading platform is to trade. So, trading commissions are absolutely crucial. You want to make sure that the taxes imposed are reasonable and comply with the accepted standard.
Regardless of whether you are looking to buy or sell Bitcoin, you need to make sure there are enough people on the trading platform to meet your orders. The larger the volume of the order book, the better.
One of the things to consider is that a transparent cryptocurrency exchange will regularly publish control information and information on its cold storage. One of the things any trading platform should prioritize investor accounts.
- Deposit and withdrawal limits
When it comes to online trading, you should deposit the funds you would like to trade with and possibly withdraw it. You should check payment options, withdrawal fees, deposit limits and other type specifications to avoid losing money when trading. In addition, the best Bitcoin brokers will also provide some sort of trading guide that can be initiated by inexperienced and inexperienced retail investors.
When you open a trading account with any Bitcoin broker, you need to make sure that your funds are securely stored. When it comes to cryptocurrency, many of the best Bitcoin brokers rely on cold storage solutions to prevent any possibility of third party interference.
At the same time, basic security measures should be implemented as a complete process of verification, risk warning, 2-factor authentication and others.
Do not become a victim of cryptocurrency theft should be your priority. Therefore, conducting a thorough and thorough due diligence is absolutely crucial before choosing the best Bitcoin broker or any cryptocurrency trading platform. This will help you avoid losing your money.
Below you will find a brief comparison between brokers that will show you the types of functionality that different Bitcoin brokers tend to have.
The most popular Bitcoin brokers
There are many Bitcoin brokers on the market that a trader can choose from. Naturally, they differ in a range of different characteristics. Below is a brief comparison between brokers that explores some of their main and most important features.
eToro
eToro is a financial services company regulated and authorized by the Securities and Exchange Commission of Cyprus. It is among the most reliable Bitcoin brokers on the market and offers a wide range of useful features for the investor.
In terms of payment methods, the options provided vary widely from a simple transfer from your bank account to the use of Skrill, PayPal, NETELLER and a range of different payment options in general.
In terms of trading fees, eToro applies an encryption fee of 0.0005 units on Bitcoin withdrawals and 0.006 units on ETH withdrawals. There are also some conversion fees that you should be aware of. The minimum deposit on eToro is $ 200.
The trading platform allows you to invest in currencies, commodities, stocks, cryptocurrencies, ETFs and indices. In general, the opening of a trading account on the platform is quite simple and the withdrawal costs are not so high.
Evolve the markets
Evolve Markets is a trading platform that is another of the best Bitcoin brokers. Investor accounts are approved immediately while deposits are confirmed within a few minutes. It allows users to operate on commodity, forex and cryptocurrency markets.
The trading platform does not have a minimum deposit requirement. There is a trading fee of 0.075 percent on cryptocurrencies and no commission on withdrawals and deposits. It allows users to easily purchase or sell Bitcoin and boasts a seemingly powerful commercial infrastructure.
Simple FX
Simple FX is among the most popular trading platforms that includes a user-friendly interface and a range of tools designed to improve the user experience.
Trading CFD is one of the flagship offers. It allows fast and secure transfers, a complete API manager, no minimum deposit or withdrawal requirement, plus negative balance protection.
Plus500
Plus500 is without doubt one of the best known bitcoin brokers. It has a minimum deposit of $ 300. Just like eToro, it is regulated by the Cyprus Securities and Exchange Commission, the Financial Conduct Authority and the ASIC.
In terms of risk management, the platform allows some different tools, including risk warnings. Deposits and withdrawals can be made easily via PayPal, Skrill, credit cards and bank transfer.
24 Option
24 The option is well known is one of the best brokers out there. Among its advantages are the wide range of activities, as well as the apparent deposits and withdrawals. However, the platform is also known for fairly high spreads and insufficient information on account types.
Markets.com
Markets.com is a broker managed by Safecap Investments Limited. This is a financial services company that is regulated and authorized by the Cyprus Securities and Exchanges Commission.
Just like other brokers in the list, Markets accepts a wide range of payment methods that include Skrill, PayPal, NETELLER, wire transfer, and so on.
The broker is also proud of his customer service.
Conclusion
Choosing from the best Bitcoin brokers is a decision that should be made based on individual preferences. However, there are established and reliable companies, some of which are listed above in our short comparison with the broker.
Reading a complete and impartial review of brokers on any trading platform that you could select is essential when you think. In general, however, you should consider a number of factors, especially if the Bitcoin trading platform provides everything you need for your Bitcoin trading without interruptions, effectively, securely and without problems.
[Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Trading cryptocurrency is volatile and risky. Always consult with a trained financial professional before making any investment decisions.]
