If you are wondering what cryptocurrency trading relates to, one of the best ways to describe it is as the Forex (Foreign Exchange) of cryptocurrencies. Basically, it is a process where you trade different cryptocurrencies such as Bitcoin and other altcoins normally for USD and BTC values.
If you don’t want to or can’t mine Bitcoin or other cryptocurrencies, the best way to invest in cryptocurrencies is to do cryptocurrency trading. The truth is, this process doesn’t require any mining hardware but only your money and a virtual wallet to begin with.
Why Trade Bitcoin Instead Of Forex?
There are many reasons why Bitcoin trading is better than Forex trading, with the growing price of Bitcoin being the first and the most important one. However, aside from it, trading Bitcoin is great because it is:
- Easy To Enter – You need less than an hour to start trading Bitcoin and earning money. Instead of Forex trading that demands a proper account that needs to be confirmed (a process of several weeks), Bitcoin trading happens fast and is always easy to leave. All you need is to transfer your bitcoins out of the exchange or buy Bitcoin directly from there.
- There Are Smaller Spreads – Another huge advantage of cryptocurrency trading over Bitcoin are the low spreads. Now, the spread here is the difference between the ask and bid price of the aftermarket. While the spread on the Forex market is 0.0002, the Bitcoin spread to USD is a lot smaller. This means that when you exchange Bitcoins, you have nearly no loss as in Forex.
- Margin Trading – Margin trading is possible on some Forex and cryptocurrency exchanges, which is basically a process where you use funding from peer-to-peer margin funding providers which let you borrow buying/selling power with your funds allocated elsewhere.
- Leverage At Cryptoexchanges – You have the option to also use leverage trading on some Forex and cryptocurrency exchanges. This is basically the possibility to trade an amount which you don’t have at your disposal. Normally, crypto exchanges offer a leverage of 1:10 ( which means for each dollar you get 10 dollars of buying power) – and the crypto exchange comes with similar ration.
How to Get Started In Trading Cryptocurrencies Like Bitcoin?
The first thing you need is an online wallet, which allows you to buy and store your cryptocurrencies like Bitcoin or Ethereum as well as protect them.
Now, most of the cryptocurrency exchanges offer free wallets as part of the deal once you sign up and invest money in Bitcoin trading. It goes without saying that you should be cautious with your wallet and always activate the two-factor authentication for enhanced safety. Also, most of the exchanges offer cryptocurrency trading that bases on Bitcoin, which is why Bitcoin should be the first cryptocurrency to consider buying.
If you decided to buy Bitcoin, you should definitely choose your exchange place wisely. There are a lot of cryptocurrency exchange markets out there, but you should be careful and see the rules.
For example, some crypto exchanges only allow you to exchange Bitcoin to Altcoin without the possibility of exchanging Altcoin to any other Altcoin. This means that you are limited to Bitcoin and not other alternative coins (altcoins) like Ethereum, Litecoin etc.
As soon as you open your account, you need to transfer an amount of Bitcoin from your wallet to your exchange account and start trading. Alternatively, you can deposit flat currencies such as USD and EUR but know that there are higher fees for this sort of trading.
A Final Word On Cryptotrading
In the end, crypto trading is definitely becoming a hot term in the dictionary of many traders – and is certainly a great way to make good money. The first reason for that is the growing value of crypto currencies. If we take Bitcoin for example, its value has grown by 650% only in 2017 (by far) and many other cryptocurrencies are following the same routine.
By following the expert crypto trading rules as well as following your instinct, you can eventually take advantage over the people who don’t – and make most of crypto trading. Also, you can detect which crypto coins are scams and which have a massive potential to skyrocket just like Bitcoin.
Remember – the key is to always stay informed and be careful where you invest – and never invest what you cannot afford to lose!