Launched at the start of 2009, Bitcoin became the first digital currency that allowed users to transact peer-to-peer and in a decentralized manner. In a short span, the digital asset has had a massive impact leading to the birth of the cryptocurrency industry that is shaping the future of finance. Even though Bitcoin was meant to help users exchange value without intermediaries, its unique properties, such as scarcity, have made its value grow over time as the available supply diminishes.
What Is Bitcoin Trading?
Bitcoin trading involves the buying and selling of BTC for profit. This is possible on trading platforms, either centralized or decentralized. On the former, you buy BTC using fiat currencies or other crypto coins and sell for the same. The former has full custody of user funds; however, the latter doesn’t hold user funds. This makes decentralized platforms more secure and flexible since you get to set your own terms for the trade. Bitcoin trading has become quite popular over the years as the cryptocurrency market has grown. And thanks to the high volatility associated with the market, it can be highly lucrative if you get it right.
How To Invest In Bitcoin
Trading involves buying and selling Bitcoin within a specified period. This can be minutes, hours, days, weeks, and even months. It is a regular exercise that aims to exploit the volatile price movements for profit. Investing, on the other hand, is more long-term. It can take from months to years. You buy the digital asset and hold it for the long run. As the project becomes more popular and gains more users, the value of its native token grows. BTC has an ROI of over 57,000% from its all-time low back in July 2013; this means that individuals who got in early are sitting at pretty awesome returns.
To invest in Bitcoin, you need to visit a reputable platform that offers access to the asset and purchase using any supported modes. However, since the crypto asset is decentralized, the safety and security of your coins is your responsibility. Therefore, leaving your coins on a centralized platform is risky since you will lose them if the exchange gets hacked. Over the years, many individuals have lost billions of dollars in such a manner. It does help to invest in a hardware wallet such as Ledger Nano X or Trezor, which allows cold storage of the coins. Then store your wallet safely and never lose your seed phrase since that is another sure way to lose your funds forever.
Bitcoin Trading Strategy
Bitcoin trading can either be long-term or short-term. The long-term route involves entering positions and staying in them for weeks and months. As for the short term, you take positions and stay in them for minutes, hours, and even days. The trading style one opts to use will rely on their individual preferences. Also, as you get more experienced, your trading style will get more sophisticated.
How To Trade Bitcoin
As mentioned above, you can trade Bitcoin in the short term or long term. The former involves shorter time frames. For example, scalping is a trading strategy where you get in a position and exit after a few minutes. The goal is to exploit slight price movements like 2-5%. Also, you can take positions that take a few hours or even a whole day before your exit. This is known as day trading. Range trading involves trading within identified support and resistance lines. Also, there is arbitrage, where you exploit price differences on various platforms. The goal is to buy where it’s cheapest and sell where the price is at the highest.
The crypto market runs 24/7 and trying to time when to enter, and exit positions can be hectic. This is where bots can be of help. Crypto bots are programs that can be set to execute trades for you based on defined parameters.
Learn Bitcoin Trading
It might sound simple buying and selling Bitcoin for profit; however, it is not. You will need to educate yourself on the craft to take advantage of the many opportunities crypto trading offers. Luckily there are plenty of free and paid resources you can utilize to educate yourself, and all you need is to invest some time.
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To Your Trading Succes ❤️🤖
The DemaTrading Crew
