Bitcoin investment is a complex process, but it is quite easy to narrow it down to a few steps. You will only need an account at an exchange or a service while planning to trade in Bitcoins, although it is recommended to adhere to safe storage practices.
The following are a few steps to help you trade in Bitcoin:
Table of Contents
Step 1: Choose a crypto trading platform
The first step in purchasing Bitcoin consists of selecting a crypto trading platform or service. Popular platforms to purchase cryptos include payment services, brokerages, and crypto exchanges like bitcoin up. The exchanges are the best option since they offer many features and more cryptos to trade, including OTC crypto options.
You can easily buy, sell, and even hold the crypto after signing up with the exchange. It is the best practice as the exchange allows users to withdraw cryptocurrencies to their online wallets for added security. The feature will be of great significance for those willing to invest in Bitcoin or any other cryptocurrency.
You will often come across many crypto exchanges. A few exchanges allow their users to stay anonymous and would not need users to enter their personal information since Bitcoin is all about decentralization and individual dominion. Few exchanges even function autonomously and are mainly decentralized as they do not have anyone controlling them.
Step 2: Connect a payment option to your exchange
Gather all your documents after you have selected an exchange. It may include copies of your driver’s license or even your Social Security card, along with the details of your employer and your source of funds. The need for every exchange varies, and the information may even depend on your residing region and the laws that prevail over it. The process is entirely the same as setting up a typical account for brokerage.
You will even be asked about connecting to a payment option after the exchange verifies your identity. In most exchanges, you will connect the bank account directly or even connect to a debit and credit card. Purchasing Bitcoin through a credit card is not a great idea since the currency’s price is extremely volatile.
Step 3: Place an order
After selecting an exchange and connecting to a payment option, you can buy Bitcoin. Recently, the crypto exchanges have eventually transformed into more mainstream. They have developed greatly in terms of their features and liquidity, and the functional changes at the exchanges are in sync with the outlook of the cryptos. The crypto industry has now transformed into a legit one drawing massive interest from major financial industry players.
Step 4: Safe storage
Cryptocurrency and Bitcoin wallets are places to store their digital assets securely. You only get control over the private key regarding your funds when you have your Bitcoin outside the exchange. You can also store the funds away from an exchange, possibly avoiding the risks of your exchange being hacked.
You get various options when it comes to selecting a Bitcoin Wallet. Gaining knowledge of the crypto wallet is also significant here. Many people are confused about whether a hot wallet is a good choice or whether they should consider a cold wallet. While hot wallets are prone to hacking, cold wallets are free from this theft, but you may lose it. So, you must emphasize keeping it safe and secure.
How to Sell Bitcoin?
You trade in Bitcoin at the same crypto exchange and the P2P platforms. Generally, selling bitcoins on these platforms is quite similar to the method involved in its purchases.
The crypto exchanges initially charge a percentage of crypto sales as fees. For instance, Coinbase generally charges about 2.50% of the entire transaction amount as fees.
Tips for trading a cryptocurrency
Tip #1: Always use multiple exchanges. The main consideration factors should be the payment options, user-friendly interface, and advanced account security.
Tip #2: Never be in a hurry or get driven by emotion regarding crypto investment. Some stores and companies accept bitcoins and a few other altcoins.
Tip #3: Always trust the market flow, being a beginner. Select the most prominent exchanges, coins as well as trading platforms.
The Bottom Line
The technique of purchasing Bitcoin involves a bit of complexity than the processes involved with buying regular stock and equipment. It is specifically due to the cryptocurrency ecosystem and the infrastructure since they are not well-developed like those involved in the mainstream trades.