The cryptocurrency market largely depends on trading and investing. The increased value of these currencies is attracting the world to trade them for profit-making. Being the most demanded cryptocurrency bitcoin is probably the highest traded digital currency now. However, many people are still in a doubt about the basics of trading that are preventing them to start bitcoin trading.
Therefore, here are the answers to the most common and asked questions about bitcoin:
1. What is bitcoin trading?
Trading generally means when transferring goods and services happen between two people. But from another perspective, trading means investing in cash or commodities for a period of time. Just like that, bitcoin trading means buying and selling bitcoin for some time through bitcoin exchanges to earn a profit.
2. What is the difference between bitcoin investment and trading?
Bitcoin investment is a long-term process. At a certain market rate, you buy bitcoins. Then you hold them for a long period hoping for a price appreciation so that you can make a profit by selling them. Investment in the crypto world is called holding because you hold it for a long period. This process of making a profit is time-consuming and needs patience. But chances of profit-making are generally high.
Comparatively, bitcoin trading is a short or very short time process. It can be of two types. Short-term trading and long-term or you can say medium-term trading as compared to investment. This also includes buying and selling bitcoins. The main goal here is to buy bitcoin at a lesser price and sell them at a higher price to make a profit.
3. From where can we trade bitcoin?
Just like stock trading exchanges, there are bitcoin trading exchanges from where you can trade bitcoin. Bitcoin trading exchanges are online platforms that facilitate marketplaces for buyers and sellers of bitcoins. You can both purchase and sell bitcoin in exchange for any cryptocurrency or fiat currency on this platform.
With the increased demand for bitcoin trading, bitcoin exchanges have also increased in number. Currently, there are around 600 cryptocurrency exchanges in the world where you can trade bitcoin. Nowadays many computer and mobile applications are also available in the form of a bitcoin exchange. Among them, you can go for the Bitcoin Era application which gives an easy and beginner-friendly guide to trading your cryptos.
4. How bitcoin trading is done in exchanges?
Bitcoin trading is a very simple process. Here is the step by step guide:
- The first thing you need to do is search for a good and reliable trading exchange.
2. After that, you have to register with the exchange through a simple verification process.
3. Then a bitcoin account will be opened and created on the exchange and you have to link the account with your existing bank account.
4. Now, you will be transferring some initial funds like fiat currency from your bank account to that trading account.
5. After funding now you have money to buy your first bitcoin. Check the market and make a purchase by executing a buy order.
6. Selling your bitcoin is quite similar to buying. You have to put a sell order and when the buyer confirms you get your funding and transfer bitcoins to the buyer’s account.
5. Is bitcoin trading really profitable?
Yes, bitcoin trading is profitable. But, it mostly depends on the crypto market and the trading strategy you apply. Because of the volatility, there always remains a risk with bitcoin trading. However, if you have the right knowledge of when to buy and when to sell the chances of making a profit is bigger. But, you can also face some losses if you failed to apply the right trading strategy.
According to experts, bitcoin’s supply and demand ratio will help increase its value in the future. So, if you are thinking of long-term trading or investing in bitcoin, it might be profitable for you.
6. Is there any fixed time to trade bitcoin?
No, there is not any fixed time for bitcoin trading. The bitcoin market as well as the cryptocurrency exchange is open 24/7, every day, 365 days a year. Any time you can buy or sell bitcoin at your convenience.
So, we hope these FAQs helped you build some basic knowledge about bitcoin trading. Now you are one step ahead of your first trading. Do some more research about the market and start gaining profit.