As businesses closed and people lost jobs last year, people began to evaluate new ways to make money. Some people invested their time to learn new skills and try new careers. Other people turned to more unconventional ways of generating revenue.
Cryptocurrencies saw a surge in interest last year. Bitcoin was responsible for much of this interest, as it saw its price skyrocket. Cryptocurrency has become a tool of many investors seeking to diversify their investments.
You may have seen the hubbub over its price and want to know how to trade Bitcoin. If you have questions about Bitcoin and how to invest in cryptocurrency, read on for the answers.
How to Trade Bitcoin
The first thing you need to decide is where you’re going to purchase your bitcoin. You can purchase bitcoin from stock exchanges or cryptocurrency exchanges.
When you purchase bitcoin from an exchange, many of them charge a percentage of the purchase price. Some of the exchanges where you can buy and sell bitcoin include Coinbase, Binance.US, and Gemini. There are also many others, each with its own features.
There are also some other ways to purchase bitcoin. You can use a Bitcoin ATM; these allow people to purchase and sell bitcoin.
You can also purchase bitcoin directly from another person. You can use tools like Bisq and Bitquick to execute the transaction. When you initiate a peer-to-peer cryptocurrency transaction, you should be cautious.
You can also trade in Bitcoin futures. However, this is not for people new to trading cryptocurrency and takes a high degree of knowledge and skill to execute.
A Volatile Market
Volatility refers to the variation of a commodity’s trading price over a period of time. Commodities with low volatility typically have smaller price fluctuations over a period of time, which makes them a more reliable investment opportunity.
Cryptocurrencies have high volatility. Their trading price can be affected by many different factors. Politics, world events, and even Tweets from celebrities can send their price in one direction or the other.
Since Bitcoin is at the forefront of cryptocurrencies, changes in its price can dramatically affect the prices of other cryptocurrencies.
It’s not unheard of to see a cryptocurrency’s price change by 10% in a single day. The high volatility means much more risk but the potential for large returns.
What Do I Do If I have Bitcoin?
What you do with it is up to you and your goals. You can use it to trade for other cryptocurrencies on different platforms. You can also hold it as a long-term investment.
There are several things you should consider when figuring out what to do with your bitcoin.
Be aware of tax laws. In the United States, cryptocurrencies are treated as capital assets. A trade or sale of bitcoin means that it is subject to the capital gains tax.
If you want to convert some of your bitcoin to other cryptocurrencies, research these prospective cryptocurrencies. Many altcoins are popping up. These are cryptocurrencies other than Bitcoin.
Not all altcoins are meant to be a digital currency. Before you invest in an altcoin, research its intended use, token economy, and track record.
Set price alerts. Since cryptocurrencies are volatile investments, you can drive yourself crazy checking their price multiple times a day. A price alert will alert you when your investment reaches a pre-set price so you can act accordingly.
Your Source for Business and Finance
Bitcoin can be an avenue to help you explore new ways of generating income. It’s important to keep in mind that Bitcoin is a volatile investment, so there is a lot of risk. If you play your cards right, however, you can see substantial returns.
Find a reliable exchange where you can trade cryptocurrency with features to aid your experience. Be sure to do lots of research and be aware of regulations when your trade it.
If you found this guide on how to trade Bitcoin helpful, we have more resources for you. We provide help with business, finance, and marketing. If you are looking for a guide on money matters, we have everything you’ll need to assist you.