BTC (Bitcoin) has been a huge success in 2020. For the first time since December 2017, the cryptocurrency hit the $18,000 mark, which is only 10% away from its all-time high of $20,000. Because of this spike in value, many people are considering dipping their toe into the world of trading Bitcoin. According to some analysts, the $20,000 threshold is not where the value will max out. Some actually say that Bitcoin might become the next $1 trillion assets. This asset’s supply is maxed out at 21 million coins, of which 18.5 million have already been mined. This means that mining will be a bit difficult, unlike the earlier days. As such, if someone wants to make money on Bitcoins, the best way is to trade. Here are some simple steps on how to get started trading bitcoin.
Choose a reputable exchange
The first move you make in such a case is to find an appropriate exchange for you. According to statistics by CoinMarketCap, there are about 400 crypto exchanges worldwide each with its strengths and shortcomings. Before you credit your exchange account, ensure that you perform your due diligence and ensure that their service suits you well. This means checking out currencies they accept, their trading volumes, news on the company, and how well they support their clients in case of an issue. Before you commit, you should know everything important about the company as it might mean all the difference between making losses or profits. Some of the popular exchanges worldwide are Coinbase and Binance.
Sign up and complete your security checks
Once you have chosen the ideal crypto exchange, you can now sign up and create an account. Just like any other account online, you’ll need an email or a phone number to sign up and then go through the verification process as required. While most exchanges don’t need to know your real identity, some platforms such as Coinbase and Bitmex are required to verify their customer’s identities. In such a case, you should have identification documents ready. While still at the signup stages, it’s also important to take care of your security. Here, enabling 2-factor authentication will help keep your account and money safe.
Choosing a payment method
There are only a handful of ways to get your hands on some Bitcoin. You can purchase your Bitcoin using your regular fiat currencies such as dollars and euros. In such a case, you can either attach your debit card, credit card, or bank account to the exchange so that you can seamlessly transfer funds. You can also choose to utilize third-party apps such as PayPal and Simplex, which can also do a nice job.
Now that you are all set up, it’s time to make your Bitcoin purchase. Before making that first move, however, you need to decide on how much you want to invest. Since cryptocurrencies can be volatile without giving a signal, know that it’s a high-risk investment and, as such, hedge your investment properly. This means before you buy, you should have done your research to make sure the conditions are optimum for a good move. Great investors recommend someone to invest just about 10% to 15% of their holdings with Bitcoin so that your financial position isn’t badly damaged should prices take a sudden hit.
Don’t keep it all on the exchange
Once you have some Bitcoin of your own, store them in a proper place. Professionals recommend that you only keep on the exchange what you need for your next trades. The rest are better off in a cold wallet where hackers can’t reach. Many people have left Bitcoin worth thousands of dollars on their exchange wallets only to find them empty as a result of a security breach. Although accessing your Bitcoins will take a little more time with a cold wallet, it makes sure that your money is safe.