Trading Bitcoin is an exciting and unique new way of trading currencies. The Bitcoin market is still brand new and it offers many interesting opportunities for investors. Many of the features that make up Bitcoin, such as its global reach and unpredictable nature, makes it a perfect investment opportunity. On this page we will give you an overview of what Bitcoin trading is, how it’s done and how you can get started with it.
Why You Should Trade with Bitcoins
Before we continue with the technical aspects of trading Bitcoin, we want to clarify why everyone should consider trading Bitcoin and how it can be more lucrative than regular currency trading.
In comparison to all other currencies, Bitcoin is very unique. It is not limited to borders, regions or cultures, but can be used by anyone who has access to the internet. This means that the amount of potential daily users and transactions are huge even compared to giant currencies like USD and EUR. This, of course, creates perfect conditions for training. But that is not all. In our opinion, there are three main reasons why it’s more attractive to invest in Bitcoin than other currencies.
Bitcoin Is Volatile
Bitcoin experiences more frequent and extreme price movements than regulated currencies. And big spreads offers the possibility to make a lot of profit even from the smallest trades.
During the summer of 2017, Bitcoin moved from a value of just under $2000 per coin in June to over $4500 by the end of August. That is a price change that no other currency would ever experience, or survive. And spreads like this creates conditions that the forex market has never seen before. In fact, we consider Bitcoin’s volatile nature to be the single biggest reason for anyone to trade it.
Bitcoin Is Global
In some ways, the global inclusion is the foundation for Bitcoin and all other cryptocurrencies. They are not regulated or tied to any single country which means that they are available to more people. A global market is perfect for a currency like Bitcoin whose value is completely based on demand. If you would limit Bitcoin to a certain area or demographic it would eventually fade away.
Bitcoin Is 24/7
There is no official Bitcoin exchange but rather several smaller markets around the world. This means that the Bitcoin market never really closes and that Bitcoin can be traded at any time of the day. Naturally, this results in more opportunities for investors.
How To Trade Bitcoin
Now when you know why you should trade Bitcoin we will talk more about how you actually trade Bitcoin.
There are a few ways to trade Bitcoin and the newest way is through regular forex trading. In forex trading, you buy currencies in currency pairs. When you buy the currency pair (i.e BTC/USD) you also decide on when and for what price you will sell it. Your job is to match you trade time with the prediction you make about how the price will move. If your prediction is correct your investment was successful, and if you were wrong your investment is unsuccessful. You can go to the page called Forex Trading to read more about how to trade currencies.
Another way to trade Bitcoins is to buy actual Bitcoins and then keep them until you can sell them for more and hence make a profit. Let us use an example to better explain. If you buy 1 Bitcoin today for $4500 and sell it next month for $5000, then you’ve made $500 from your investment.
This alternative is safer than regular forex trading since you can keep your Bitcoins for much longer and won’t be forced to sell them until you’ve made a profit. It is also the most common way of trading Bitcoins, even though we expect to see Bitcoin playing a bigger role in the forex market in the future.
Where Is It Done
Trade Bitcoins with a Broker – Just as Bitcoin trading can be done in several ways it can also be done through different channels. If you want to trade Bitcoin on the forex market there are several hundred brokers on the market and it is important that you choose one carefully. Otherwise, you might end up losing your money and having your personal information leaked. We have written more about currency brokers here, and it’s a good idea to read through that page before you make any decisions. You can also make it easier for yourself and use one of the brokers that we recommend – they are all 100% trustworthy and reliable.
When it comes to Bitcoin trading we highly recommend that you use Markets.com as your broker. They offer one of the best trading platforms in the industry and they recently made Bitcoin a part of the regular selection of available instruments.
Trade Bitcoins On Your Own – If you rather buy and sell Bitcoins on your own you will need to use an e-wallet. Most e-wallets online let you buy, sell and store your Bitcoins with them. There are several e-wallet providers you can use but Coinbase and Coindesk are the two leading ones. You can also read more about different types of Bitcoin wallets here.