Many investors like to Trade cryptocurrency especially Bitcoin, because it’s How to keep an extremely volatile asset. If you can time the market right, trading crypto can give you much higher returns than traditional investments.
Cryptocurrency traders often have one of two goals: to accumulate Bitcoin or make a profit in USD. In a crypto bull market, it’s pretty easy for your portfolio to increase in USD value. But it’s more challenging for Bitcoin value to increase. To track your portfolio’s Bitcoin value, you can trade altcoins against Bitcoin on exchanges like Coinbase Pro.
How to Trade Bitcoin
By actively trading your cryptocurrency, you risk losing your crypto to the market. Since cryptocurrency prices are so volatile, it’s not uncommon for traders to lose money quickly trading cryptocurrencies. This is why so many crypto enthusiasts just hold their Bitcoin.
What is Cryptocurrency?
Although there are many different types of cryptocurrencies, they all have one thing in common: they operate on blockchain technology, making them decentralized. Decentralization of financial operations through cryptocurrencies has several efficiencies over the traditional financial system, including:
- Cuts out almost all the overhead costs associated with banks
- Less expensive transactions that can be sent and received internationally
- Inflation or finite supply that’s written into code — no need to trust the Federal Reserve
- Financial derivatives like trading strategies and loans can be coded directly onto certain cryptocurrency blockchains, replacing the need for financial intermediaries.
The largest cryptocurrency is Bitcoin and it’s used as a “digital gold.” Essentially, Bitcoin is a commodity used as a store of value. Ethereum is the 2nd-largest cryptocurrency with a market cap of 0 billion.
What is Bitcoin?
Bitcoin is a digital currency, also known as a cryptocurrency, and is created or mined when people solve complex math puzzles online. These bitcoins are then stored in a digital wallet that exists on the cloud or the user’s computer. Because bitcoins are not housed in bank accounts, brokerage, or futures accounts, they are not insured by the FDIC or SIPC. Virtual currencies, including bitcoin, experience significant price volatility.
How to Trade Cryptocurrency
Below is How you can Trade any Cryptocurrency including Bitcoin:
- Sign up for a cryptocurrency exchange. For example Coinbase or Binance.
- Fund your account. Payment options differ by the exchange.
- Start trading.
You can trade dollars to crypto or crypto to crypto.
Bitcoin Trading Platforms
Here are some of the best places you can trade your cryptocurrency especially bitcoin:
- TradeStation – Best Trading Platform.
- Coinbase – Best Crypto Exchange.
- eToro – Low Fees.
- Kraken – Maker-Taker Fee Schedule.
- Bittrex – Most Altcoins.
- Gemini – Offers Gemini Dollar.
- Robinhood – Best Mobile App.
And many more.
How Does Cryptocurrency Work?
Cryptocurrencies are digital assets that are powered on the blockchain. Blockchain technology stores a ledger of every transaction of the cryptocurrency on every node powering the blockchain. Nodes are computers that are connected to Bitcoin’s network to mine Bitcoin. If one of these miners tries to enter false transactions, it will be nullified by the correct ledger.
To transact with a cryptocurrency, you need to have a set of public and private keys. These keys are like passwords generated by your cryptocurrency wallet. Your public key is connected to your wallet’s address and allows people to send you cryptocurrency. Your private key is used to approve transactions being sent from your wallet –– only you have access to your private keys.