New technologies are defining our lives today more than ever. Modern times as Charlie Chaplin would say in one of his movies; however, not everything is said, and the blockchain and the cryptocurrencies are here to change everything… again.
Well, today we are going to talk about the thing that started everything: Bitcoin, the king of cryptocurrencies. The image of the blockchain and the future master of the financial world.
What is Bitcoin Trading?
The king of cryptocurrencies is a digital asset that can be transferred in real time and safely between two persons who are in two different places in the world.
It is decentralized because no financial institution or central bank is involved. Bitcoin was created in 2009 by a person, or a group of people called Satoshi Nakamoto.
Now, talking about bitcoin trading, it is the art of buying and selling bitcoins to make profits. When you buy a bitcoin, you are speculating with the rise of the BTC price, and vice versa.
You make money with the difference between the opening and closing prices.
With the pass of time, bitcoin trading has been evolving with new crypto assets. In the beginning, Bitcoin wasn’t even a tradable asset; then it evolved to be bought or sold against Ethereum, then against the Dollar, etc.
What is a Bitcoin Broker?
There are two options for trading cryptocurrencies, over a broker or with an exchange.
How to choose a Broker
Picking the right broker for you could be the difference between making or losing money. There are some factors to consider before choosing a broker, and it goes from regulation to latency or customer services.
First of all, you should understand yourself and your needs. Are you a scalper or a long-term Bitcoin trader? It is essential so you will know your potential fees.
Secondly, check for regulators. Is the broker regulated and under the supervision of a watchdog in a country with a good reputation? Avoid brokers with no regulators o registered in banana republics.
As mentioned before, fees and hidden costs are a critical topic to consider. How much the broker charges you for every trade? How much for withdrawals or deposit. How much money is for the minimum deposits? Always check the fine print.
Test its platform before going live with them. A demo account is a good lab for your strategies but also to evaluate the broker. Check how it works, and how the platform works for you.
Check its customer service and how they respond to your questions and necessities. They should be able 24/7. They should always be willing to help you and go for the extra mile to solve your doubts.
Let’s now talk about ten brokers that you may find it interesting.
Binance: Crypto exchange for thousands of tokens
Malta-based cryptocurrency exchange Binance was founded in 2017 in China, but regulations in Asia forced the company to move into its new location in Malta. The company offers over 100 tokens to be traded.
Binance provides users with a public wallet address to send funds. They charge a flat 0.1% fee on each trader. Withdrawals only in cryptocurrencies.
In the case you want to have access to this platform, please click on the “Create Account” link at the top center of the homepage.
Complete the form in the next page. Remember to choose a wise password and to add a referral ID in the case you have one.
Check the verification email that Binance sent to your account. Then, log in the Binance platform to trade. Read the safety risk notice in the next page, click on the “I understand, continue” button.
Submit verification documents, complete all the information requested and then click on the Exchange button at the top left to open the platform.
Plus500: A multi device CDF platform
In this innovative and straightforward trading ecosystem, the investor will be able to trade stocks, forex, and cryptocurrencies, but mostly on CFDs.
They charge spread differentials and offer guaranteed stops. The London-based firm will allow you to operate stocks, forex, and cryptocurrencies in CDF version.
To open an account in Plus500, click on the “Start Trading Now” button and fill out the registration form that you will see in the next page.
After getting inside the trading platform, complete the welcome tour and start trading in the demo account. It will help you to identify all features and tools Plus500 is offering you.
24 option: The broker for a beginner trader
A broker for beginners who want to learn how to trade. 24option offers an intuitive trading platform with powerful educational tools.
The broker is owned by Richfield Capital Limited, a Belize investment firm which operates under the Belize regulation.
To create a new account with 24option.com, go to the signup button at the top right of the website and click in it. Then complete the application form and create your password.
Remember to choose a password hard enough to not to be discovered, but easy enough to be remembered.
As an options platform, it allows you to use binary options and to trade on a one single click.
Once you are inside the platform, follow the welcome tour and identify the buttons, including deposits to fund your account. The minimum deposit is $250 or 250€.
Markets.com: CFD platform for profesional and independent traders
This CDF broker specialized in Forex, shares, indices, commodities, and cryptocurrencies offers extensive in-platform research with detailed product listings.
Despite the fact that its parent company is listed in the UK stocks market, Markets.com is not regulated by the UK regulator FCA. They are more oriented to fundamental traders.
To open an account with Market.com, click on the “Start Trading” button in the first shot of the website. Once you are inside the registration form, please follow the instructions and complete the data.
You will be able to register yourself with your Google account or your Facebook profile.
You can also open a demo account in Markets.com, just click on the “or try a Free Demo Account” link.
Once you are inside the platform, please do the welcome tour and identify all the features. You will be able to make deposits at the top of the platform. Just click on “Deposit Funds” tab.
Other Brokers and Exchanges:
Coinbase: Digital assets exchange Coinbase has a presence in over 30 countries. It offers one of the most liquid exchanges in the market, but has limited payment methods. Also, anonymity is not granted as the company may track how its users spend bitcoin.
Kraken: US-based cryptocurrency exchange Kraken was founded in 2011, but it started live trading in September 2013. It has high liquidity, especially in euros and the Japanese yen. Margin trading and short selling are supported.
Gemini: Founded in 2015 by Cameron and Tyler Winklevoss. The Winklevoss twins are better known for suing Mark Zuckerberg over the Facebook original idea. Gemini is one of the most respected crypto exchange with USD to crypto and dollar to crypto exchange.
BitMex: Bitcoin Mercantile Exchange, BitMEX is one of the largest bitcoin trading platforms in the market. It only accepts deposits through Bitcoin, which can be used to buy other cryptocurrencies. It is restricted to users based in the United States
Pepperstone: An execution broker that offers competitive fees. It gives access to over 90 instruments mostly focused on Forex and CDFs. They offer cryptocurrencies too. Pepperstone offer copy trading from social-trading signals. It doesn’t have a proprietary trading platform.
Top 10 crypto trading markets
So, do you want to trade Bitcoins and other cryptocurrencies? Well, let’s check it out what are the most important, popular, and liquid markets in the crypto sphere.
First, we should understand the difference between a cryptocurrency and an altcoin.
Cryptocurrency is a digital currency which takes the form of a token or a coin. The crypto part in cryptocurrency refers to the cryptography behind every single coin which provides a particular token the possibility to be generated, stored and transacted safely and anonymously.
On the other hand, currencies created after bitcoin are widely called altcoins and have been built as attempts to modify or to improve the Bitcoin structure.
The term stands for “alternative to Bitcoin.” Every altcoin has different monetary policy rules to encourage different uses or focus.
Bitcoin was first successfully globally implemented digital currency, and it is the most popular and liquid market in the cryptocurrency industry.
Like gold, Bitcoin should be mined and has a limited supply. According to the Satoshi paper, only 21 million bitcoins can be mined in total. Currently, over 80% of the total Bitcoin supply has been produced.
The Bitcoin market capitalization sums over 71 billion dollars. BTC all-time high was 20,089 dollars on December 17, 2017, while all-time low was $65.53 on July 05, 2013.
Ethereum is a decentralized software platform that enables Smart Contracts and DApps. Its token is the ether, ETH.
Launched in 2015, ETH has a market capitalization of 14.7 Billion dollars, with a current supply of 105 million ETHs.
ETH all-time high is 1,432.88, reached on January 13, 2018, while its all-time low is the 0.4208 traded on October 21, 2015.
Launched in 2011 as one of the first altcoins trailing the Bitcoin is also known as “silver to Bitcoin’s gold.” LTC was created by Charlie Lee, MIT alumni, and former Google engineer.
Litecoin offers a faster block generation rate and a quicker transaction confirmation. As per the end of March 2019, Litecoin has a 3.7 Billion dollar market capitalization. Circulating supply is currently 61 million LTCs, with a max quantity of 84 million.
The all-time high was $375.29 on December 19, 2017, while its all-time low was 1.11 dollars on January 14, 2015.
With a 352 million dollar in market capitalization, Zcash is a decentralized and open-source cryptocurrency launched in late 2016.
Zcash provides users with more privacy and selective transparency of transactions. 6.2 million ZEC are circulating in the market. All-time high was 5,941.80 on October 29, 2016, while its minimum price was 26.15 dollars on February 23, 2017.
Dash, previously known as darkcoin is a more anonymous version of bitcoin as Dash makes transactions almost untraceable. Launched in 2014, Dash has an 815 million market cap with a current supply of 8.7 million Dash. Max supply will be 18.9 million Dash.
All-time high was 1,642.22 on December 20, 2017; All-time low was 0.2138 on February 14, 2014.
Ripple is a worldwide settlement network for international, instant and low-cost payments. Launched in 2012, Ripple has a 12.9 billion market capitalization with a current supply of 41.7 million XRP, but a max quantity of 100 billion XRP.
XRP all-time high was 3.84 dollar on January 4, 2018, while its all-time low is 0.0028 reached on July 7, 2014.
Launched in 2014, Monero was focused on decentralization and scalability while enabling complete privacy. Its token, the XMR performed an all-time high of 495.84 on January 7, 2018, and a minimum of 0.2129 on January 14, 2015. Market cap is 917 million dollars with a circulating supply of 16.8 million XMR.
8. Bitcoin Cash
Bitcoin is the most successful hard forks of the original bitcoin. Introduced in August 2017, BCH increased the block size from a 1MB limit of Bitcoin to 8MB. BCH has a market cap of 3 billion dollars and a circulating supply of 17.7 million BCH. The max quantity is the same as Bitcoin, 21 million BCH.
The all-time high was 4,355.62 on December 20, 2017, the historical minimum was 75.08 on December 15, 2018.
Neo was introduced in 2014 and it is currently the largest cryptocurrency born in China. It is also referred as the Chinese Ethereum.
NEO has a market cap of 601.7 million USD with 65 million Neo on market. All-time high is 196.85 reached on January 15, 2018, and all-time low is 0.0722 performed on October 21, 2016.
Cardano was launched in September 2017 by Charles Hoskinson, co-founders of Ethereum. ADA cut payment processing times from days to just seconds.
Cardano has a market cap of 1.7 billion dollars with almost 26 million ADA circulating in market. All-time high is 1.33 USD, while all-time low is 0.0173 of October 1, 2017.
Differences between Trading Bitcoin and Buying Bitcoin
It is not the same when buying Bitcoin than when trading bitcoins. I mean, both can be assumed as investing movements but are different.
When you buy a bitcoin, you own the bitcoin, and you have it in your possession. It can happen in a cryptocurrency exchange or with a bitcoin provider.
However, when you are trading bitcoin, you don’t have the real bitcoin but a contract where you explain your intention of trade.
While trading bitcoin the money is made when you close the position, and your profit or loss will be the difference between the opening and closing prices. You don’t need wallets when trading bitcoins.
How to create a Bitcoin Wallet
Cryptocurrency wallets are tools designed to store and protect your assets. It is easy to create a wallet where you can store all your cryptocurrencies, including your bitcoins.
First, you have to select what kind of support do you want, a cold or a hot wallet.
A cold wallet is storage that you will have like an offline physical wallet to store your bitcoins. Hot wallets are connected to the internet, and your bitcoins will be in an electronic online address.
Second, go to a wallet provider and select the option to create a new wallet, fill out all the information and complete all the form. Verify your identity and choose your sharing conditions.
Types of Bitcoin Trading Accounts
There are different options to trade bitcoins. Let’s talk about types of bitcoin trading accounts.
Buying and holding accounts: You buy a bitcoin from an exchange or cryptocurrency broker, and keep the bitcoins in your wallet. Then you can exchange or use it at your discretion.
Trading CDFs: A Contract for Difference is a derivative instrument that allows you to buy representations of an asset against the other asset, like Bitcoins against Dollars. Your account is based on cash margins.
Buying a crypto related security: There are crypto ETF, indexes, mutual funds and companies working with cryptocurrencies.
Top 10 Bitcoin Trading Terms
Bitcoin: Bitcoin is the king of cryptocurrency. The first successfully implemented digital asset as a currency. Created in 2009 by Satoshi Nakamoto
Cryptocurrency: A cryptocurrency is a digital asset which represents a technology or platforms. It contains cryptography to ensure its security and benefits.
Altcoin: People call alt coins to all cryptocurrencies different from Bitcoin. It stands for “alternative to bitcoin,” AltCoin.
Wallet: The place where to hold and keep bitcoins safely is called a wallet. It could be cold, which means offline, and hot, online.
Broker: A Financial firm that offers investing and trading services across different markets.
Exchange: An institution where you can exchange, buy, sell or storage cryptocurrencies in its real representation.
Blockchain: The mother of the lamb. The technology behind Bitcoin and allotter platforms related to altcoins.
Decentralization: Philosophy that aims for a world with no central powers or government institutions ruling but individuals setting its terms at their convenience.
Satoshi Nakamoto: Creator of the bitcoin manifest and the bitcoin white paper. Satoshi is an anonymous person or group of persons who released the paper back in 2009. Nobody knows who he is or they are.
Mining: The process to create bitcoins. A computer performs mathematical calculations to confirm every transaction made in the blockchain or related platform.
Automatic Trading with Bitcoin
Automatic trading in bitcoin accounts is possible, but you should do it right. Before using a bitcoin robot, you should do your research and avoid scams.
Bitcoin is a volatile market that offers many opportunities, so robot which looks for divergences or price gaps are excellent tools.
There are a lot of robots in the market, but not all are a trust able resource. Please, be careful and do your homework before signing in.
Celebrities that endorse cryptocurrencies
Bitcoin and altcoins are not only for financial people. Worldwide celebrities are endorsing it and betting on cryptocurrencies.
Brock Pierce, more known for his movies when he was a child is now a cryptocurrency entrepreneur. Canadian singer Drake was a victim of a Fortnite hack, but he still thinks technology and cryptos are the future.
Everybody knows that Floyd Mayweather is a great boxer, but he is a crypto entrepreneur too. Mayweather loves bitcoins. He has been involved in many crypto projects.
Academy Award winner Jamie Foxx has been seen promoting ICO sale for Cobinhood, a zero-fee cryptocurrency exchange.
Top Bitcoin trading tips
Have a plan: Always have a plan with an entry point, stop loss, profit taking and evaluation time. In this way, you are not going to be trapped by your anxiety and feelings.
Risk Management: Know how much money you are afforded to risk. Never get to exposed. Your first responsibility is to remain alive in the market.
Start with a demo: I know you are the boss, but even the pros start with tests. Start slowly and try everything first in a demo account.
Learn technical analysis: As fundamental news doesn’t affect bitcoin too much, go the extra mile with technical analysis. Keep an eye on volume and market capitalization.
Diversification: Don’t just trade bitcoin, it will be better to have a well-diversified portfolio including altcoins and even indices and ETFs.
Read: Know more about professional traders and investors. You can learn from stories which make others rich.
Keep updated: Follow the market, the news about bitcoin and cryptocurrencies. Improve yourself and learn how to adapt to any possible market change.
So, should I trade bitcoin?
Well, that question should be answered by you, and only you. Are you willing to take risks associated with a high volatile market such as Bitcoin? Also, are you sure you have what it takes to learn everything about trading?
If your answer is yes, of course, go ahead and buy and sell bitcoins. However, be patient and take your time to make decisions and to build your portfolio. Again, play it right.
Bitcoin is a volatile game so the more money you have, the better positioned you will be. In Coinbase you can start your wallet with $50. Brokers have minimum deposits, generally between $100 and $250.
Go to a trustable broker website and open an account. It is better to start trading and testing everything in a demo account before going live.
Check all the news regarding bitcoin, blockchain, and regulation on cryptocurrencies. Watch technical indicators in the chart. Trade responsible.
Either you want to do scalping, a trend contrarian, trade the news trader or a long term investor, do it with extensive research. All four works, but you should understand the principles and keep the trading plan.
Yes, you can. It is not the best, but you can do it. As trading is all about making pips, you need to fix your position size and your risk-reward ratio and act accordingly. Also, be patient.
Yes, you can. So, respect the market and study before trading.