In reality, bitcoin trading is pretty straightforward once you get the hang of it. Being the top-notch cryptocurrency, it’s pretty easy to buy and sell them if and when you want to. Bitcoin has a tradition of uncertainty that has attracted a lot of traders and media attention to the ecosystem.
How to Exchange Bitcoin: Fast Begginer Guide
Each time the Bitcoin’s price increases, new entrants and speculators want their share of income. It’s extremely easy for anyone to exchange Bitcoin as the entry barrier is so weak. So, how are you going to get your piece of the pie? What do you have to do to make sure that you trade bitcoin efficiently?
This guide is going to help you with your business decisions. So, before you get into the “how” let’s continue with the “why” stuff. Why would you trade bitcoin?
Why Would You Want to Swap Bitcoin?
The reason you’re expected to invest in bitcoin, and cryptos in general, is that there’s nothing similar to that. There are many features that make bitcoin trading both interesting and exclusive.
Bitcoin is Not Fiat
Bitcoin is not a fiat currency, i.e. it is not under the rule of a single country. And, instead of a single market getting a stranglehold on the price of the commodity, Bitcoin’s price has responded to a wide variety of events.
Let’s look at some of the incidents that have influenced the price of Bitcoin in the past few years.
# 1 – Brexit
UK’s decision to opt out of the EU has caused quite a ripple in their local economy. As a result, Binance, the exchange giants, reported that they were “overwhelmed” by registrations for their new Jersey-based trading platform due to crazy demand. Binance Jersey allows users to exchange Euros and British Pounds for Bitcoin and Ethereum and to use digital asset management services.
#2 India’s Demonetization
Demonetization was a bid by Indian Prime Minister Narendra Modi to tender Rs. 500 and Rs. 1000 non-legal notes. Just 18 days after the demonetization announcement, the price of Bitcoin on Zebpay, one of India’s leading exchanges, rose from $757 to $1,020 (per unit). Back then, the BTC rate in the US was $770.
#3 Trump’s Election
Shortly after Trump’s win, stocks started to crash. Dow Jones, S&P 500 and Nasdaq were plummeting. Likewise, the Australian stocks have lost USD 30 billion. Yet Bitcoin was a whole different story. It went up to $740 just before the election night, leading to issues with the Mexican peso. After that, it went down to $705 and then went to $739 as soon as Trump was elected.
We may make one clear and logical inference from all these three cases. People have a propensity to invest in Bitcoin when faced with uncertain economies and challenges facing fiat currencies.
Bitcoin is available 24/7
In comparison to the financial markets, Bitcoin is available 24X7. The explanation is that the financial markets are unique to the country in which they trade and typically represent the operating hours of that country. Anyone can buy bitcoin on most of the exchanges. There are hundreds of exchanges around the world that run on a 24/7 basis. In other words, you can swap bitcoin 24/7!
Bitcoin is a speculative currency, and cryptocurrencies are typically notorious for their fast and regular price swings. This volatility will help traders make a fast, easy buck.
How Does Bitcoin Work?
You should at least know how it functions before you invest in an asset. Several times here, we’ve discussed the mechanics behind the cryptos in depth. However, we will provide a short rundown of the uninitiated. If you are already aware of the basics, please skip to the next part.
Bitcoin was invented by an anonymous programmer who uses the alias “Satoshi Nakamoto.” Bitcoin is driven with blockchain technology.
The blockchain is a time-stamped collection of permanent digital records maintained by a network of computers not owned by a single individual. Each of such data blocks (i.e. block) is guarded and bound by cryptographic rules (i.e. chain) to each other. Okay, but what does that mean in basic terms?
Imagine a common ledger that everybody can open and write in. Anyone who has a copy of the ledger can:
- check the documents that have been signed in to the ledger.
- Test the date the documents were signed in.
- Can not tamper with all of the entries that have been created before, since the ledger is timeless. This immutability property is one of the most important trademarks of the blockchain and achieves it via the cryptographic hash function.
That’s what Bitcoin has brought us, the first proper deployment of a blockchain that can function as an eternal and transparent ledger. This invention gives us a network that is absolutely incorruptible and free from human wrongdoing, because any transaction made in the blockchain can be verified.
How Do Transfers Work?
One of the most important aspects about Bitcoin is that you don’t have to go through a bank to make money. As the Bitcoin community says, “You’re your own bank.” And, how did they do that? Public key cryptography is the answer.
All Bitcoin users have a private key and a public address, all of which are mathematically extracted from each other. So, how is it going to work? It’s pretty straightforward, honestly. The public address is like your account number, and the private key is like your PIN code. When you collect bitcoins, people send them to your public address. You can submit your bitcoins to someone using your private key.
And, with that clarification, we will make two observations:
- You can make your public address open to all.
- You should never tell anyone about your private key.
It’s just as simple as that.
This is supposed to give you a quick understanding of what Bitcoin is and how it functions. That is why Bitcoin has been such a big deal. Now, let’s look at how we can get your hands on a cryptocurrency, the first step in learning how to buy it!
Exchanges: The Cryptos Portal
The exchange is one of the most critical functions in the crypto ecosystem. It serves as a bridge between the world of Fiat and the world of Crypto. The cryptocurrency market is similar to the stock exchange, but with an emphasis on cryptocurrency tokens rather than stock exchanges. Simply put, a crypto exchange is a platform where customers can buy and sell cryptocurrency assets.
An exchange may be planned with certain objectives:
- To make the process as beginner-friendly as possible.
- To deliver a competitive price.
- Provide a forum to seasoned and skilled crypto-traders.
Broadly speaking, there are two types of crypto-exchange:
- Fiat-to-crypto exchanges.
- Crypt-to-crypto exchanges.
Fiat to Crypto
Fiat to Crypto exchanges lets you buy Cryptos in return for Fiat money. Such exchanges were planned to be as beginner-friendly as possible. Kraken and Coinbase and Bitbuy are perfect examples of fiat-to-crypto exchanges. You can use BitBuy to purchase Bitcoin, Bitcoin Cash, Ether, Ripple, and Litecoin directly.
Crypto to Crypto
These exchanges allow you to swap cryptos like BTC, ETH, BCH, etc. for other cryptos. Binance is a good example of a crypto-to-crypto exchange. There are markets that are more targeted to seasoned traders than to newcomers.
Crypto markets contend for an enormous amount of capital every day. Actually, test how much of the top 5 exchanges (ranked by transaction volume in the last 24 hours) measure:
Adding it together, these five exchanges have had a massive transaction volume of $9,544,591,940 over the last 24 hours! Okay, so that’s a lot of numbers. So, where do you get started, exactly?
If you’re a Canadian, the reaction is pretty clear. Bitbuy.
Bitbuy – Premier Canadian Exchange
Bitbuy is a Canadian owned and run digital currency marketplace. Established in 2013, Bitbuy has continually provided Canadians with a secure and efficient forum to acquire and sell their cryptocurrencies. As explained above, Bitbuy was a fiat-to-crypto exchange where you can deposit Canadian dollars directly on their website to be traded for digital currencies. Their headquarters are based in Toronto, Ontario, and their services are accessible to Canadian traders around the world.
Bitbuy’s Buying and Payment Options
Bitbuy.ca supports the following payment forms:
- Bank wire
- Interac Electronic
- Interac e-Transfer
- Flexepin coupons
- Express Interac e-Transfer
Another important aspect of Bitbuy is that there are no costs to remove the cryptocurrency. You can send your crypto to a private wallet free of charge. This makes it perfect for long-term buyers who want to keep up with their cryptocurrencies.
Your first transaction will take place for one to three business days for security reasons. If you have a checked account and have made more than three transactions on Bitbuy, your funds will be available in real-time.
Kraken – Premier American Exchange
If you’re American, the solution is pretty clear. Kraken.
Kraken is a well-known international cryptocurrency exchange, originally located in San Francisco. Kraken allows consumers to finance their accounts in Canadian dollars and has a variety of Canadian dollar trading pairs. Kraken maintains a small office in Halifax, Nova Scotia, which manages and funds their Canadian operations.
Kraken has limited investment options relative to other Canadian markets. Currently, the only way to deposit Canadian dollars to Kraken is by bank wire, which ensures that you would need to physically go to the bank to initiate a wire transfer in order to access the service. Certainly not the most easy funding tool, but if you’re able to complete the process, Kraken is a decent forum to use for advanced features.
Perhaps their best feature is that Kraken encourages users to marginalize trade, which means users can borrow money to buy digital properties. This is an sophisticated tactic that can be tricky, but it can be successful if you know what you’re doing.
Kraken also provides discounts to high-volume traders, which are not offered by many other exchanges. While Kraken provides some of the best features and a range of many altcoins, it suffers from a lack of visibility in Canada. Some of the CAD pairings that they sell have a small trading volume, which means that if you intend to buy a significant sum, you will experience a price drop and pay a higher price than you would have wished for with your digital currency. Kraken profits from being the world’s largest foreign trade and receives strong funding as well as regular updates.
- Low Fees
- Margin trading
- Advanced trading platform with several apps
- Small funding options
- Low volume for Altcoin/CAD pairings
But How Do I Become a Qualified Member?
As long as you are a registered user, you have the option to use every payment system that you choose to finance your Bitbuy account. You will need to give the appropriate KYC information for verification. The docs that you will send are:
- A color copy of your passport or driver’s license.
- A copy of your bank account or utility bill showing your name and proof of address.
- A photo of yourself with your government-issued ID.
- If the account is a corporate account, further documentation showing the “authority to operate on behalf of a company” will be sent.
The entire authentication process normally takes between one and three business days.
Customer Service in Bitbuy
Bitbuy also gets very fast customer support. You may do the following to provide support for your query:
- Visit the support part of the website and use the “Submit a request” button.
- Using support by live chat.
- Please contact them by email or telephone.
- If you live in Toronto, you can just go to their office if you need to.
How Secure Is Bitbuy?
Bitbuy is a subsidiary of First Ledger Corp, a Toronto-based blockchain and digital currency firm. They also confirmed that the trade complies with all the laws of Canada. They also took the following steps to keep the data safe:
- Bitbuy uses Stable Socket Layer (SSL) security to protect users.
- They also use two-factor authentication for additional security.
- Bitbuy.ca runs with a 95 percent cold storage buffer for all digital currencies stored on-site and executes regular encrypted and distributed backups to prevent any impacts or assaults.
Pros and Cons with Bitbuy
- Buy tokens directly using Canadian dollars.
- Searching for competitive rates across multiple exchanges.
- Express Interac e-Transfer allows two-hour financing
- Users can choose from a variety of payment options.
- The bank wire transfer system makes for high deposit caps.
- Pre-purchase sale price calculator.
- Allows for fast withdrawals of CAD.
- Provides BTC, BCH, ETH, XRP, and LTC instead.
If you are a Canadian citizen, you can go to Bitbuy right now and build your own account to start trading.
How to Trade Bitcoin
There are a lot of ways you can exchange Bitcoin and cryptocurrencies so it’s completely up to you what you choose to achieve from your savings and how much energy you’re able to offer to trading. As per IG, there are four major forms of trading:
- Day trading
- Swing trading
- Passive trading
NOTE: Examples in this section have been taken from IG.
Day traders open and close their positions within a single trading day.
This approach works for traders who want to take advantage of short-term openings in the Bitcoin market that may emerge in the light of news reports or evolving trends.
Swing traders grab patterns in market moves as soon as they shape and hang on to them until the trend is reversed. This technique is perfect if you want to take advantage of the momentum of the market.
Set up a few intraday trades on small price fluctuations, if you’re the sort of trader who can make a few small daily gains instead of waiting for a major chance.
Whether you’re a long-term investor, or you just want to get into the crypto market and try your hand out, passive trading might be perfect for you. The principle is as basic as it is timeless. Wait until the prices fall to a certain level and buy-in. Wait for the price to go up to a certain amount and buy out.
Unlike other types of trade, purchasing and selling will last for several days, weeks, months, and even years.
Fundamental analysis vs. technical analysis
The two most important methods to bear in mind when investing are fundamental analysis and technical analysis.
This study looks at the overall picture instead of market fluctuations. When you’re doing a theoretical study of the coin, you’re looking at:
- The developer’s operation around the coin. How many projects or successful changes the firm is going through. Recently, the value of Cardano jumped by a large amount after publication of the mainnet version 1.5.
- The incorporation of the coin into the mainstream. Is there a business or a common site that incorporates the coin? If yes, this would have a huge effect on the market. Stellar XLM gained almost 50 percent in March 2019 after IBM announced the introduction of World Wire, a cross-border payment platform under the Stellar protocol.
- Significant global developments will affect the price of cryptocurrencies as mentioned in this article.
Being up-to-date on all current affairs is important for a sound fundamental study.
Financial forecasting is a technique or approach used to forecast the possible future movements of currency pairs, cryptocurrency pairs or stocks. It can be imaginative and versatile, which will help you develop a very deep perspective on the coin.
The fundamental idea behind technical analysis is, however, that regardless of what is happening in the world at the moment, market fluctuations speak for themselves and tell some kind of story that lets you predict what is going to happen next.
Bitcoin Trading: Typical Mistakes
1. Getting an itchy trading finger
Due to the crypto-volatility and the general public’s FOMO, people can overtrade. One aspect you ought to remember is that cryptocurrency investing is like gambling, so it’s not an exact science. Don’t overplay your hand particularly if you don’t have a discretionary income. Sure, you can make a lot of profits, but you can lose a lot as well.
2. Blind trading
Trading is a fool’s errand without any tactic. Take the time to do some work. Educate yourself about coins and think about certain trading techniques. Learn about the trades and pick the one that will help you the most.
People also want to invest in the same coins that their mates are invested in. Though there is nothing in taking advice, you can mix advice with your own studies.
3. Giving in to fears
Fear and greed are the two most prevalent feelings for investors. Fear may cause you not to dive into a coin when it’s ready, or it may cause you to abandon your trade prematurely. Conversely, greed can allow you to have blind and baseless trust in a single coin, or it may make you hang on to a trading route beyond the expiry of exchange. Don’t give in to feelings, remain as logical as you can.
4. Not learning from errors
It doesn’t matter whether you’re a novice or an professional, you’re going to make mistakes. However, what distinguishes experienced traders from novices is the willingness to adapt and develop from these errors. When you misread a trend for the first time, that’s a genuine mistake. If you misread the same pattern a second time, it’s totally up to you.
5. Holding your crypto in exchange
In fact, this point provides a pretty good segue into our next segment, which is…
What’s a Wallet for Cryptos?
Every exchange has its own wallet, but it is not the safest choice. If you’re hoping to hang on to your crypto for a long time, check out cold wallets. The two types of cold wallets that we’d use are hardware wallets and paper wallets.
Hardware Wallets are physical devices where you can store your cryptocurrencies. They come in a few ways, but the most common is the USB stick type of the Nano Ledger series. Though many swear by them, hardware wallets are often vulnerable to compromise. First, you must believe that the organization that made your wallet has not logged all the private keys with a plot to raid the wallets in the future. This refers to those obtained by the company itself, but in particular if a hardware wallet has been obtained by second hand. No one should ever use a pre-owned hardware wallet.
Although failure or destruction can result in an catastrophe for the unprepared, hardware wallets may be restored. It’s just as necessary to back up your hardware wallet as it’s your hot online wallets. You will keep the specifics of the restoration in a secret location that only you and anyone you want to leave the money to know about. The specifics of your restoration will unlock the wallet. Think very much about who (if anyone) you’re sharing with. It is also vitally important that you pass your coins to a new wallet, should something bad happen to you and anyone else who knows your private keys (spouse, etc.)
Here are some hardware wallets that you can use:
- Ledger Nano S
Paper wallets are an offline cold storage tool for storing cryptocurrencies. This involves writing out your private and public keys on a sheet of paper that you carry and lock in a safe spot. The keys are written in the form of QR codes that you can check for all your purchases in the future. The reason it’s so simple is that it gives you, the customer, total control. You don’t need to think about the well-being of a piece of hardware, nor do you need to think about hackers or some form of malware. Everything you need to do is take care of a sheet of paper.
You don’t have to spend any money to make wallets of paper. That makes it an economically viable choice. You should go to the Wallet Creator to create your own Bitcoin paper wallet.
CONCLUSION: How To Trade Bitcoin
What you learned in this guide will help you get started with your business. However, you will need to keep studying to acquire more and more experience. Having said that, at the very least, you will be able to make your first easy transaction. So, why don’t you just hop on Bitbuy right now and swap bitcoin!