Cryptocurrency trading is a multi-layered process that involves research, planning and prediction. Beginners may feel overwhelmed the first time they enter this platform, but like any other endeavor there are tips on how to ease onto the system and lower the learning curve.
Here’s a beginner’s guide to acquiring your very first Bitcoin and investing your asset to make a profit.
Get Started by Buying Bitcoin
The first step on how you can start trading popular cryptocurrencies such as Bitcoin is to find a reputable crypto exchange platform. A Bitcoin exchange is a website that allows users to buy or sell Bitcoin, and notable platforms include Binance, Kraken and Coinbase.
Since you don’t have cryptocurrency yet you’ll want to make a fiat to crypto exchange. This means using fiat currency to purchase Bitcoin, Ethereum or other coins you want to invest in. It’s also the option if you’re looking to cash out and make a profit.
Crypto to crypto is another exchange option for those who want to invest in new coins using their assets. Registering on an exchange platform requires you to present your identity before you’re allowed to buy Bitcoins.
How to Trade Your Assets for Profit
Cryptocurrency trading follows the same maxim as with stock trading- buy low, sell high.
This means that you buy an asset at the lowest possible price, then wait for it to increase in value before selling it. If you do it this way then you’ll end up with more money than what you started with.
As simple as it may seem, there’s a lot of planning and research involved. First, you will have to predict when a crypto, such as Bitcoin will fall in value then do an estimate on when it will rise again. Furthermore, you will have to determine the approximate time on when it will rise to the selling point, or the value of the cryptocurrency you want before you sell it.
Fortunately, there’s a way you can make all of this easier. A robo trading platform such as Bitiq can automate the process- you just need to set the ‘sell’ point and ‘buy’ point so the system will buy or sell the cryptocurrency at the price you want. There’s no guesswork involved and you can do other things while growing your investment.
Storing Your Cryptocurrency
Seasoned crypto traders know that holding all your digital assets will likely lead to losing them, and for this reason they will tell you to store some of your cryptocurrency in a cold wallet.
Hot wallets are those in crypto exchanges and online trading websites, while cold wallets are devices that hold Bitcoin and other coins. The main difference is that you can take cold wallets offline and thus preserve them from online threats such as theft, hacking and more.
It’s recommended that you store the cryptocurrency you wish to move quickly on hot wallets so you can complete transactions faster, while keeping the rest in a secure cold wallet. Remember to back up your wallets and keys so you won’t lose it if you forget the password.