The Complete Guide to Trading Bitcoins

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Bitcoin Trading Guide for Beginners

By: Ofir Beigel | Last updated: 1/1/20

This post covers the basics of Bitcoin trading. It will help you get familiar with basic terms, understand different ways to “read” the market and its trend, make a trading plan and to learn how to execute that plan on Bitcoin exchanges.

Bitcoin Trading Summary

Bitcoin trading is the act of buying low and selling high. Unlike investing, which means holding Bitcoin for the long run, trading deals with trying to predict price movements by studying the industry as a whole and price graphs in particular.

There are two main methods people use to analyze Bitcoin’s price – fundamental analysis and technical analysis. Successful trading requires a lot of time, money and effort before you can actually get good at it.

In order to trade Bitcoins you’ll need to do the following:

  1. Open an account on a Bitcoin exchange (e.g. CEX.io, eToro, Bitstamp)
  2. Verify your identity
  3. Deposit money to your account
  4. Open your first position on the exchange (i.e. buy or short sell)

That’s Bitcoin trading in a nutshell. If you want a really detailed explanation keep on reading. :

Don’t Like to Read? Watch Our Video Guide Instead:

1. Bitcoin Trading vs. Investing

The first thing we want to do before we dive deep into the subject is understand what Bitcoin trading is, and how is it different from investing in Bitcoin.

When people invest in Bitcoin, it usually means that they are buying Bitcoin for the long term. In other words, they believe that the price will ultimately rise, regardless of the ups and down that occur along the way. Usually, people invest in Bitcoin because they believe in the technology, ideology, or team behind the currency.

Bitcoin investors tend to HODL the currency for the long run (HODL is a popular term in the Bitcoin community that was actually born out of a typo of the word “hold”—in an old 2020 post in the BitcoinTalk forum).

Bitcoin traders, on the other hand, buy and sell Bitcoin in the short term, whenever they think a profit can be made. Unlike investors, traders view Bitcoin as an instrument for making profits. Sometimes, they don’t even bother to study the technology or the ideology behind the product they’re trading.

Having said that, people can trade Bitcoin and still care about it, and many people out there invest and trade at the same time. As for the sudden rise in popularity of Bitcoin (and several altcoins) trading – there are a few reasons for that.

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First, bitcoin is very volatile. In other words, you can make a nice profit if you manage to correctly anticipate the market. Second, Unlike traditional markets, Bitcoin trading is open 24/7.

Most traditional markets, such as stocks and commodities, have an opening and closing time. With Bitcoin, you can buy and sell whenever you please.

Finally, Bitcoin’s relatively unregulated landscape makes it relatively easy to start trading—without the need for long identity-verification processes.

While all traders want the same thing, they practice different methods to get it. Let’s review some examples of popular trading types:

Day trading

This method involves conducting multiple trades throughout the day, and trying to profit from short-term price movements. Day traders spend a lot of time staring at computer screens, and they usually just close all of their trades by the end of each day.

Scalping

This day-trading strategy is becoming popular lately. Scalping attempts to make substantial profits on small price changes, and it’s often referred to as “picking up pennies in front of a steamroller.”

Scalping focuses on extremely short-term trading, and it’s based on the idea that making small profits repeatedly limits risks and creates advantages for traders. Scalpers can make dozens—or even hundreds—of trades in one day.

Swing trading

This type of trade tries to take advantage of the natural “swing” of the price cycles. Swing traders try to spot the beginning of a specific price movement, and enter the trade then. They hold on until the movement dies out, and take the profit.

Swing traders try to see the big picture without constantly monitoring their computer screen. For example, swing traders can open a trading position and hold it open for weeks or even months until they reach the desired result.

Can I predict Bitcoin’s price movement?

The short answer is that no one can really predict what will happen to the price of Bitcoin. However, some traders have identified certain patterns, methods, and rules that allow them to make a profit in the long run. No one exclusively makes profitable trades, but here’s the idea: At the end of the day, you should see a positive balance, even though you suffered some losses along the way.

People follow two main methodologies when they analyze Bitcoins (or anything else the want to trade, for that matter) – fundamental analysis and technical analysis.

Fundamental analysis

Tries to predict the price by looking at the big picture. In Bitcoin, for example, fundamental analysis evaluates Bitcoin’s industry, news about the currency, technical developments of Bitcoin (such as the lightning network), regulations around the world, and any other news or issues that can affect the success of Bitcoin.

This methodology looks at Bitcoin’s value as a technology (regardless of the current price) and at relevant outside forces, in order to determine what will happen to the price. For example, if China suddenly decides to ban Bitcoin, this analysis will predict a probable price drop.

Technical analysis

Tries to predict the price by studying market statistics, such as past price movements and trading volumes. It tries to identify patterns and trends in the price, and based on these deduce what will happen to the price in the future.

The core assumption behind Technical analysis is this: Regardless of what’s currently happening in the world, price movements speak for themselves, and tell some sort of a story that helps you predict what will happen next.

So, which methodology is better?

Well, as I already said in the previous chapter, no one can accurately predict the future. From fundamental perspective, a promising technological achievement might end up as a flop, and from technical perspective, the graph just doesn’t behave as it did in the past.

The simple truth is that there are no guarantees for any sort of trading. However, a healthy mix of both methodologies will probably yield the best results.

Let’s continue to break down some of the confusing terms and statistics you’ll encounter on most of Bitcoin and crypto exchanges:

Trading Platforms vs. Brokers vs. Marketplaces

Bitcoin trading platform are online sites where buyers and sellers are automatically matched. Note that a trading platform is different from a Bitcoin broker, such as Coinmama.

Unlike trading platforms, brokers sell you Bitcoin directly and usually for a higher fee. A trading platform is also different from a marketplace such as LocalBitcoins, where buyers and sellers communicate directly with each other, in order to complete a trade.

The Order Book

The complete list of buy orders and sell orders are listed in the market’s order book, which can be viewed on the trading platform. The buy orders are called bids, since people are bidding on the prices to buy Bitcoin. The sell orders are called asks, since they show the asking price that the sellers request.

Bitcoin Price

Whenever people refer to Bitcoin’s “price”, they are actually referring to the price of the last trade conducted on a specific trading platform. This important distinction occurs because, unlike US dollars for example, there is no single, global Bitcoin price that everyone follows.

For instance, Bitcoin’s price in certain countries can be different from its price in the US, since the major exchanges in these countries include different trades.

Note: Next to the price, you will sometimes also see the terms high and low. These terms refer to the highest and lowest Bitcoin prices in the last 24 hours.

Volume

Volume stands for the number of overall Bitcoins that have been traded in a given timeframe. Volume is used by traders to identify how significant a trend is; Significant trends are usually accompanied by large trading volumes, while weak trends are accompanied by low volumes.

For example, a healthy upward trend will be accompanied by high volumes when the price rises and low volumes when the price declines.

If you are witnessing a sudden change of direction in the price, experts recommend checking how significant the trading volume is, in order to determine if it’s just a minor correction or the beginning of an opposite trend.

Market (or Instant) Order

This type of orders can be set on a trading platform and it will be instantly fulfilled at any possible price. You only set the amount of Bitcoins you wish to buy or sell and order the exchange to execute it immediately. The trading platform then matches sellers or buyers to meet your order, respectfully.

Once the order is placed, there is a good chance that your order will not be matched by a single buyer or seller, but rather by multiple people, at different prices.

For example, let’s say you put a market order to buy five Bitcoins. The trading platform is now looking for the cheapest sellers available.

The order will be completed once it accumulates enough sellers to hand over five Bitcoins. Depending on sellers availability, you might end up buying three Bitcoins at one price, and the other two at a higher price.

In other words, in a market order, you don’t stop buying or selling Bitcoins until the amount requested is reached. With market orders, you may end up paying more or selling for less than you intended, so be careful.

Limit Order

Allows you to buy or sell Bitcoin at a specific price that you decide on. In other words, the order may not be entirely fulfilled, since there won’t be enough buyers or sellers to meet your requirements.

Let’s say that you place a limit order to buy five Bitcoins at $10,000 per coin. Then you could end up only owning 4 Bitcoins, because there were no other sellers willing to sell you the final Bitcoin at $10,000. The remaining order for 1 Bitcoin will stay there, until the price hits $10,000 again, and the order will then be fulfilled.

Stop-Loss Order

Lets you set a specific price that you want to sell at in the future, in case the price drops dramatically. This type of order is useful for minimizing losses.

It’s basically an order that tells the trading platform the following: If the price drops by a certain percentage or to a certain point, I will sell my Bitcoins at the preset price, so I will lose as little money as possible. A stop-loss order acts like a market order.

In other words, once the stop price is reached, the market will start selling your coins at any price until the order is fulfilled.

Maker and Taker fees

Other terms that you may encounter when trading are maker fees and taker fees. Personally, I still find this model to be one of the more confusing ones, but let’s try to break it down.

Exchanges want to encourage people to trade. In other words, they want to “make a market.” Therefore, whenever you create a new order that can’t be matched by any existing buyer or seller, i.e. a limit order, you’re basically a market maker, and you will usually have lower fees.

Meanwhile, a market taker places orders that are instantly fulfilled, i.e. market orders, since there was already a market maker in place to match their requests. Takers remove business from the exchange, so they usually have higher fees than makers, who add orders to the exchange’s order book.

For example, perhaps you put a limit order in to buy one Bitcoin at $10,000 (at most), but the lowest seller is only willing to sell at $11,000. Then you’ve just created a new market for sellers who want to sell at $10,000.

So whenever you place a buy order below the market price or a sell order above the market price, you become a market maker.

Using that same example, perhaps you place a limit order to buy one Bitcoin at $12,000 (at most), and the lowest seller is selling one Bitcoin at $11,000. Then your order will be instantly fulfilled. You will be removing orders from the exchange’s order book, so you’re considered a market taker.

Now that you’re familiar with the main trading terms, it’s time for a short intro into reading price graphs.

Japanese Candlesticks

A very widely used type of price graph, Japanese candlesticks are based on an ancient Japanese method of technical analysis, used in trading rice in 1600’s.

Each “candle” represents the opening, lowest, highest, and closing prices of the given time period. Due to that, Japanese Candlesticks are sometimes referred to as OHLC graph (Open, High, Low, Close).

Depending on whether the candle is green or red, you can tell if the closing price of the timeframe was higher or lower than the opening price.

If a candle is green, it means that the opening price was lower than the closing price, so the price went up overall during this timeframe. On the other hand, if the candle is red, it means that the opening price was higher than the closing price, so the price went down.

In the image above, the opening price of the green candle is the wide-bottom part of the candle, the closing price in the wide-top part on the candle, and the highest and lowest trades within this timeframe on both ends of the candle.

When we’re in a bull market, most of the candlesticks will usually be green. If it’s a bear market, most of the candlesticks will be red.

Bull and Bear Markets

These terms are used to indicate the general trend of the graph, whether it’s going up or down. They are named after these animals because of the ways they attack their opponents.

A bull thrusts its horns up into the air, while a bear swipes its paws downward. So these animals are metaphors for the movement of a market: If the trend is up, it’s a bull market. But if the trend is down, it’s a bear market.

Resistance and Support Levels

Often, when looking at market graphs such as OHCL it may seem as though Bitcoin’s price cannot break through certain highs or lows. For example, you can witness Bitcoin’s price go up to $10,000 and then appear to hit a virtual “ceiling” and get stuck at that price for some time without breaking through it.

In this scenario, $10,000 is the resistance level – a high price point Bitcoin is struggling to beat. The resistance level is the outcome of many sell orders being executed at this price point. That’s why the price fails to break through at that specific point.

Support levels, in a sense, are the mirror image of resistance levels. They look like a “floor” Bitcoin’s price doesn’t seem to go below when the price drops . A support level will be accompanied by a lot of buy orders set at the level’s price. The high demand of a buyer at the support level cushions the downtrend.

Historically, the more frequently the price has been unable to move beyond the support or resistance levels, the stronger these levels are considered.

Interestingly, both resistance and support levels are usually set around round numbers e.g. 10,000, 15,000 etc. The reason for that is that many inexperienced traders tend to execute buy or sell orders at round price points, thus making them act as strong price barriers.

Psychology also contributes a lot to support and resistance levels. For example, until 2020, it seemed expensive to pay $1,000 per Bitcoin, so there was a strong resistance level at $1,000. Once that level was breached, a new psychological resistance level was created: $10,000.

Great, you made it this far, and by now you should have enough know-how to go out and get some field experience. However, it’s important to remember that trading is a risky business and that mistakes cost money.

Let’s go over the most common mistakes that people make when they start trading—in the hopes that you’ll be able to avoid them.

Mistake #1 – Risking More than You Can Afford to Lose

The biggest mistake you can make is to risk more money than you can afford to lose. Take a look at the amount you feel comfortable with. Here’s the worst-case scenario: You’ll end up losing it all. If you find yourself trading above that amount, stop. You’re doing it wrong.

Trading is a very risky business. If you invest more money than you’re comfortable with, it will affect how you trade, and it may cause you to make bad decisions.

Mistake #2 – Not Having a Plan

Another mistake people make when starting out with trading is not having an action plan that’s clear enough. In other words, they don’t know why they’re entering a specific trade, and more importantly, when they should exit that trade. So clear profit goals and stop-losses should be decided before starting the trade.

Mistake #3- Leaving Money on an Exchange

This is the most basic ground-rule for any crypto trader: NEVER leave your money on an exchange that you’re not currently trading with. If your money is sitting on the exchange, it means that you don’t have any control over it. If the exchange gets hacked, goes offline, or goes out of business, you may end up losing that money.

Whenever you have money that isn’t needed in the short term for trading on an exchange, make sure to move it into your own Bitcoin wallet or bank account for safekeeping.

Mistake #4 – Giving into Fear or Greed

Two basic emotions tend to control the actions of many traders: fear and greed. Fear can appear in the form of prematurely closing your trade, because you read a disturbing news article, heard a rumor from a friend, or got scared by a sudden dip in the price (that may soon be corrected).

The other major emotion, greed, is actually also based on fear: the fear of missing out. When you hear people telling you about the next big thing, or when market prices rise sharply, you don’t want to miss out on all the action. So you may get into a trade too soon, or even delay closing an open trade.

Remember that in most cases, our emotions rule us. So never say, “This won’t happen to me.” Be aware of your natural tendency towards fear and greed, and make sure to stick to the plan that was laid before you started the trade.

Mistake #5 – Not Learning the Lesson

Regardless of whether or not you made a successful trade, there’s always a lesson to be learned. No one manages to only make profitable trades, and no one gets to the point of making money without losing some money on the way.

The important thing isn’t necessarily whether or not you made money. Rather, it’s whether you managed to gain some new insight into how to trade better next time.

7. Frequently Asked Questions

How do I trade Bitcoin?

In order to trade Bitcoins you’ll need to do the following:

  1. Open an account on a Bitcoin exchange (listed below)
  2. Verify your identity
  3. Deposit money to your account
  4. Open your first position on the exchange (i.e. buy or short sell)

Is day trading a good way to make money?

Day trading is just one method out of many you can choose for trading. Other examples include swing trading or scalping.

While many people will argue day trading is a good way to make money, more than 90% of people quit day trading in the first 3 months.

Any type of trading strategy can work as long as you’re consistent and are willing to put in the time and effort to learn how to be better than other traders out there.

We covered a lot of ground about Bitcoin trading, but I have to warn you: The majority of people who start trading Bitcoin stop after a short while, mostly because they don’t successfully make any money.

Here’s my opinion, If you want to be successful at trading, you’ll have to put in a significant amount of time and money to acquire the relevant skills, just like any other venture. If you want to get into trading just to make a quick buck, then perhaps it’s better to just avoid trading altogether.

There’s no such thing as quick, easy money—without a risk or downside at the other end. However, if you’re committed to learning how to become a professional Bitcoin trader, take a look at our resource section below. These resources will help you get the best possible tools and continue your education.

You may still have some questions. If so, just leave them in the comment section below.

  • Cointelligence Academy – An A to Z trading course by Cointelligence and Mati Greenspan
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  • Coinigy – Another Bitcoin trading software

The following sites are suited for Bitcoin trading:

How to Buy Bitcoin? The Complete Guide

Investing in the right currencies can give you profits But, the gateway to all cryptocurrencies is via Bitcoin – the apex cryptocurrency.

Now that you know the theory aspect of Bitcoins – what they are, how they came to be, and how they function, it is now time to get your hands in the action and buy some bitcoins. However the biggest challenge that many people face is that they do not know how to buy Bitcoins.

There has been a growing debate over mining not being profitable any more, and even if it is profitable right now, in the near future it won’t be. There are many who debate for and against this. However there are always going to be more traders than there are miners. A majority of people involved in the cryptocurrency business would rather trade these currencies than mine for them as it is not only more convenient, but also allows users to trade online anonymously.

There are a number of marketplaces on the internet where Bitcoins can be bought and sold. To buy these Bitcoins there are a number of payment methods too. Let us take a closer look at all the options that you have when it comes to buying Bitcoins. After this is done, we will give a closer look to buying various cryptocurrencies too.

Also note that in this chapter we will be giving you an overview of things to follow. Every method listed here has a dedicated chapter of it’s own where we discuss in detail the process to buy Bitcoins.

Bitcoin Wallets

First things first. Bitcoin Wallets are the most primary requirement to buy Bitcoins. You can’t buy Bitcoins unless you have a place to store them at. We have discussed Bitcoins wallets at length in our dedicated chapter. However, here’s a quick overview.

Bitcoin wallets can be thought of as digital bank accounts to store your Bitcoins. There are a number of types of bitcoin wallets available. Without going into the specifics of these wallets, simply put these are the options you have –

There are some wallets which store Bitcoins on your Hard Drive.

Online wallets (web based services)

Vault services where you can store your Bitcoins in removable storage devices

Multisig wallets where you need more than one person’s permission to withdraw funds.

Each wallet comes with a public address and a private key. The public address is for you to give to people when they want to transfer money to your wallet. The private key is meant for you and for you only. Never share your key with anyone. It acts as a ‘password’ to your account.

Most online wallets allow you to buy Bitcoins directly via them. Others just allow you to store them.

For more details on choosing the right Bitcoin Wallet for yourself, you can refer to our comparison of some of the best Bitcoin Wallets.

Now that you have a Bitcoin Wallet, let us take a look at the ways you can buy Bitcoins from:

Buy Bitcoins via Exchanges

Think of an ‘Exchange’ as a stock market. This is where you come to pay money and get stocks. There are a large number of Bitcoin Exchanges in the markets. While we have a detailed chapter discussing Exchanges, let us take a quick overview at the different kind of exchanges –

Broadly speaking, there are two kinds of exchanges:

Those which allow you to buy cryptocurrencies in exchange for fiat currencies

Those which allow you to buy cryptocurrencies in exchange for other cryptocurrencies.

While both of them play a critical role, the kind of exchange we are looking at right now is the first one – the one that allows you to trade fiat currencies for cryptocurrencies. These exchanges let you buy Bitcoins in exchange for your fiat (govt backed) currencies.

You can either buy Bitcoins from the exchange itself, where the exchange acts as a broker and sells you Bitcoins at a fixed amount which is based on the rise and fall of the BTC vs USD prices, or you can buy from other traders on the exchange who may sell you at prices slightly lower than the going rate.

Not only can you just buy from these exchanges, you can also sell your currencies here – either at the going rate to the exchange, or at a higher or lower price.

There are a large number of Bitcoin Exchanges. However, there’s always a risk associated with buying, trading and keeping your money with exchanges. Some of the best Bitcoin exchanges where you can buy and trade Bitcoins are: CoinBase, CoinJar, Unocoin, BitStamp, Kraken and Circle. The best bitcoin exchanges when it comes to trading altcoins in exchange for Bitcoins are Bittrex and Poloniex. (Check out our complete list of Best Bitcoin Exchanges)

Most exchanges involve a KYC (Know Your Customer) process where you would be asked to submit your identity verification documents as well as go through an AML (Anti Money Laundering) process which makes sure the money you invest in cryptocurrencies is not ‘black money’ and is accounted for.

There are different exchanges based on the location you are based at. It is best advised to buy from a trusted local exchange as that will help you avoid currency conversion charges.

Buy Bitcoins Using PayPal

Despite being one of the most popular methods of online payment across the world, it is surprising that it is still hard to buy Bitcoins using PayPal. In fact, it is one of the hardest methods of buying Bitcoins and support for PayPal is extremely rare.

However if you are hell-bent on making use of PayPal as a means of buying Bitcoins, you could make use of VirWoX – a service which will help you do so. Technically even VirWoX is not a Bitcoin Exchange but it helps you buy Second Life Lindens – which is a virtual currency used in the virtual world Second Life.

These Second Life Lindens (SLLs) can then be traded for Bitcoins. While this is one of the most trusted and popular methods to buy Bitcoins via PayPal, it is quite hard and time consuming and not advised to beginners to try out. Moreover, this process of buying Bitcoins comes with a high payment fee, is time consuming and has a limit set to your account at first.

While most exchanges do not allow buy Bitcoins using PayPal, you can sell them and withdraw funds using PayPal. However, even then it comes with a fees of almost 3% on an average (varying from exchange to exchange). There have been rumors of PayPal providing support for Bitcoins but they have been growing around for years with no actual support ever coming out.

However, for those who still want to buy Bitcoins using PayPal, VirWoX is your best shot for now. It is surprising that even high profile exchanges do not support trading over PayPal. If you are looking for an alternative to VirWoX, you might also want to give Paxful a shot.

Also Read: How to Mine Bitcoins

Buy Bitcoins Using Debit and Credit Cards

Another popular payment method is to buy Bitcoins using Debit Cards and Credit Cards. While this is the most common payment method for most things in life these days, buying Bitcoins using Debit Cards or Credit Cards is often associated with a high fees.

It is hard to imagine that there was a time when buying Bitcoins using Debit and Credit cards used to be quite hard and most people avoided the payment method. However over the last one year, with the massive boom in the popularity of Bitcoins, a number of exchanges have now added support for Debit Cards and Credit Cards.

Some popular exchanges which support buying of Bitcoins over cards are: CoinBase, CoinMama, BitPanda and CEX. We will take a detailed look at each of these exchanges and outline the steps of how to buy Bitcoins using debit and credit cards in an upcoming chapter.

There are two major problems when it comes to buying Bitcoins over Credit Cards or Debit Cards

The less likely of the two is Credit Card Fraud. There’s a slight chance that your credit card or debit card information might be stolen and you might end up losing money. This is extremely rare though, thanks to multiple security measures these days.

Second reason why people do not prefer to buy Bitcoins using Credit Cards and Debit Cards is that you are allowed only to buy a certain amount of Bitcoins per week. Moreover, the transaction charges are quite high.

Buy Bitcoins Using Cash Deposits

A question many people tend to ask around is – that is it possible to buy Bitcoins using cash. Well, as strange as it might sound, yes, it is possible to buy Bitcoins in exchange for cash. There are some exchanges which accept cash as a method of payment. These Cash Bitcoin Exchanges support deposit of cash in exchange for bitcoins being credited to your account.

These exchanges include the likes of LocalBitcoins, BitQuick, Wall of Coins, Bitit, LibertyX among others.

A major advantage here is that buying Bitcoins against cash is one of the safest ways of buying them. This is especially safer if you are making use of an escrow service which acts as a mediator between the buyer and the seller. Another advantage is that of privacy. Since the transfer isn’t really taking place via bank channels in some of these cases, the Bitcoins go to your wallet directly without your identity being revealed.

One argument against cash purchases is that it promotes the flow of black money in the system, and promotes money laundering. Traders can sell Bitcoins in exchange for cash which will be with them, and will be unaccounted for in the banks. This is bad for the economy at large and might be illegal in some countries.

Often, in these cash transfers, the buyer and seller meet face to face and then make a transfer. The seller transfers Bitcoins to the buyer’s wallet address – the buyer checks it and then pays cash to the seller. Considering it’s a cash transfer and an unaccounted income, some sellers might sell it at a premium or at a discount depending on their need and the market sentiment.

Buy Bitcoins Via Bitcoin ATMs

Of late Bitcoin ATMs are also getting popular. They have begun to spring up all over the globe and offer a convenient way of buying Bitcoins.

You deposit your cash into the machine which the machine counts and converts to Bitcoins. You are then required to show your wallet QR code which the machine would scan and pay you with Bitcoins. Bitcoin ATMs usually charge a premium of around 3 to 5% over the going rate.

Conclusion

There has been a growing debate over mining not being profitable any more, and even if it is profitable right now, in the near future it won’t be. There are many who debate for and against this. However there are always going to be more traders than there are miners. A majority of people involved in the cryptocurrency business would rather trade these currencies than mine for them as it is more convenient.

We hope you have a better idea at how to buy Bitcoins with this. We will take a look at each of these payment options in detail in the chapters to follow.

The Complete Newbie’s Guide to Trading Bitcoins

The world’s first official cryptocurrency – bitcoin is responsible for the ignition of the creation of myriad cryptocurrencies. Soon after the introduction of the decentralized payment system, it has started becoming popular not among the community of finance experts but also among the common people.

According to CoinMarketCap , the total value of cryptocurrencies hovering in the market is over $200 billion. Bitcoin is leading the pack in terms of market capital with an astonishing $111.95 billion, followed by Ethereum that has a market cap $22.07 billion, Ripple $11.08 billion and BCH $7.84 billion. Since the big boom in the crypto market that occurred at the end of December in 2020, the world started to talk. Many investors jumped on the bandwagon and invested their money in Bitcoin. If you want kickoff your new career and start trading Bitcoin as well but you do not know how to begin, check out this complete Bitcoin step by step guide.

Getting your first coins

There are a few ways how you can get your first Bitcoins – either from a person (if you sell them let’s say goods or services) or from a crypto exchange or from a BTC ATM. The most preferable way to get bitcoins is through a crypto exchange. Exchanges often require you to go through a verification process so they would prevent people from laundering money. In other words, you will have to provide them with a scan of your ID or of your driving license. Once the verification is completed you can deposit your desired amount in your account and immediately use your funds to purchase Bitcoin. Depending on the exchange you choose, the transfer might be either instant or take up to 5 business days. Note that every exchange does not require to verify your ID, but most of them do.

Choose the right crypto exchange for trading

There are vast amounts of crypto exchanges offering various services at certain cost. Since trading is the concern, there are certain factors you need to consider. These factors are trading fees, transaction time, security, storing facility, insurance, number of cryptocurrencies available for trading, reputation etc.. Most crypto investors and traders choose popular crypto exchanges like CoinBase, Gemini, Kraken, Binance, etc. rather than picking an unknown exchange (since they are not sure whether they can trust companies that are not very famous).

Store your Bitcoins

Storing your Bitcoins on an exchange may not always be the safest option. The risk is lower if you purchased your coins on an exchange that has insurance because they keep the majority of their assets in cold storage, and employ other best-in-class security precautions such as top-tier encryption. Most exchanges, however, do not have insurance and that is why people usually choose to store their coins on crypto wallets. Broadly speaking, there are five kinds of wallets: web (cloud), desktop, mobile, hardware, and paper. You can choose one as per your need.

Never miss out on our daily crypto news, stories, tips, and price analysis. Join us on Twitter | Telegram | Facebook or subscribe to our weekly Newsletter.

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