Many traders think that buying cryptocurrencies is a complicated process and they try to avoid that situation. Cryptocurrencies are easy to trade and traders can earn huge profits from them. There are several traders who don’t know how to buy bitcoin.
Online trading is an easy way to invest in bitcoin or any other cryptocurrency. Investors just need to follow a simple procedure and they can buy and sell cryptocurrencies easily. Several exchanges and online wallets are available to buy and store cryptocurrencies.
What Is Bitcoin?
Bitcoin is a decentralized virtual currency that was launched back in 2008. It works on blockchain technology and all the transactions are recorded through cryptography. They are distributed in a digital ledger on the public network. These coins can be exchanged for any other currency or products.
How does It Work?
The price of bitcoin is determined according to the supply and demand because there is a fixed number of coins in the market. The rate of bitcoin fluctuates the same way like the rates of stocks and currencies. Traders make profits due to this volatility in the market.
Some General Information About Bitcoins
Investors need to know various things about bitcoins before investing in the same. You need a cryptocurrency exchange account with all your information and KYC. This has to be done with a secured internet connection. Choose a convenient method of payment to add funds to your crypto wallet.
Investors need to take special care of privacy and security as they are most important when you trade in bitcoins. Even though the technology is safe, traders need to keep their private keys safe from other people.
Anyone can see the balance and transactions made on a blockchain network because it is an open network. These transactions are more transparent than cash or digital payments. It is the claim of the FBI and international researchers that tracking digital wallets is also easy in blockchain technology.
Hence, you need to keep your investment safe from others. Follow this simple procedure and keep your bitcoins safe and buy them from trusted online platforms. There are several platforms such as Coinbase, Binance, Robinhood, and many more.
Traders can buy and sell bitcoin at these platforms freely. Choose a payment method among the methods offered at these platforms and trade in crypto.
Procedure to Buy Bitcoins
Here is the procedure that you need to follow to purchase crypto:
Step 1: Select an Exchange
At the first step, you will need an exchange platform or a broker where you can hold, buy or sell bitcoin. An e-Wallet is authorised to traders where they can hold the crypto purchased. Some exchanges require the personal information of the user whereas some do not require the same.
The most common types of exchanges are centralised and they do require KYC of traders. Each exchange platform has some unique features that are required by traders. You need to compare various exchanges before selecting one for yourself.
Traders need to use a secured internet connection while making a transaction related to crypto. The use of public networks can be harmful to you and your investments. It is also recommended to use two-factor authentication along with a strong password. Your password should be a combination of special characters, numbers, lowercase and uppercase letters.
Step 2: Open an Account
After choosing an exchange traders need to open a trading account where they can trade freely in cryptocurrency. You need to fill out some general details such as your name, email address, income, and others for the next step.
Attach the required documents to your account like address proof, identity proof, income proof, and any other if required. This is for the KYC of the trader on the trading platform. Choose an exchange that can be accessed from any device.
Step 3: Get Your Payment Option Verified
Once you have made your trading account the next step is to get your payment options verified. After your documents get verified by the platform, you can get your payment options verified. Choose a payment option that is suitable to you among all the payment options provided by the platform.
There are some platforms that charge deposit and withdrawal fee and some do not charge any transaction fee. Some of the common payment options that are available with every platform are debit card, credit card, bank transfer, online banking, and many more.
The transaction fee may vary according to the payment options that you choose. It may be different for debit card, credit card, and online transfer. Make sure that your bank allows deposit with the respective exchange.
The amount of fee should be researched by every trader before selecting the exchange. Because it will be a trouble for you if you find another platform is charging a lesser fee with the same features. Therefore, go through each point of the exchange deeply.
Step 4: Place Your Order
The next step towards buying bitcoin is to determine the quantity that you want to buy. Traders can even sell bitcoin on the exchange. After linking your bank accounts or any other payment options you just have to place an order.
Traders can also sell previously bought bitcoins from any other exchange. All you need to do is transfer your holdings from one platform to another. Cryptocurrency is liquid in nature and your orders can be executed in the shortest period of time.
Several types of orders are offered by various crypto exchanges. The orders are limit, stop-loss, market, stop-limit, and other popular types of orders. Once your payment option is verified you are ready to go, trade in the international market.
Step 5: Storage of Bitcoins
Traders store their holdings digitally because there is no physical format of coins or paperwork is available. Every trader gets a wallet from the platform to store the respective crypto or bitcoins. The wallet is the key to manage your funds or crypto.
You can store various types of coins in your wallet. Some of the wallets also provide the feature of swapping one coin from another. There are two types of wallets that are hot wallets and cold wallets. A hot wallet is also known as online wallets and a cold wallet is also known as paper or hardware wallets.
Alternative Ways to Buy Bitcoins
Apart from a broker or exchange, there are other ways to buy bitcoin. These ways are known as alternative ways because they are not the primary ways to buy bitcoin. The alternative ways are:
Bitcoins can be exchanged from ATMs, it is a physical machine. You have to insert cash into the machine and the coins get transferred to the chosen wallet. In a recent couple of years, this method has become quite popular. The transfer is simple and quick in the wallet you want.
P2P exchange means peer-to-peer exchange services. In this method, two users can directly exchange their coins with each other through an exchange. Users can search for the best deal according to their requirements.
Buyers and sellers can make a listing and if anyone finds it suitable then the same transaction can be carried out. You have to find potential trade partners before executing your transaction.
Advantages of Trading Bitcoins
Bitcoin is a leading cryptocurrency and traders should know the benefits of trading bitcoins. Make a profitable investment strategy and put some extra funds in crypto. The returns are higher than any other trading options. The advantages of buying bitcoin are:
- The price of bitcoin does not get affected by geopolitical, macroeconomic issues. The reason behind it is that they are not controlled by any central bank of any economy.
- The inflation rate does not have a direct impact on the price of bitcoin. Traders have the advantage of this feature.
- Traders get high leverage for trading in bitcoin. Many brokers are offering high leverage or trading that also means higher profits.
- Low deposit requirement because if you do not want to purchase a whole bitcoin. You can also purchase it in the amount of a fraction.
- Traders need to pay less amount of fee for trading. There are several brokers that are offering zero commission on trading and even lower spreads.
- Transactions of bitcoin are secured because of the advanced security of cryptography. Traders do not need to worry about their funds, just use a secured connection.
- Accessible across the world, so traders do not need to worry about global or international boundaries. Anyone can buy bitcoin or sell them on the open network.
These are the advantages traders can achieve if they buy bitcoin or sell them across the globe. It is a good method to fetch more money from the market. Traders need to study the past data if they want to invest in bitcoin.
Bitcoin CFDs: Alternative to Buying Bitcoin
If you are looking for an alternative to directly buy bitcoin. Traders can trade with CFDs (Contract for Differences). Any currency can be used to trade in CFDs, many brokers are offering CFD trading. You do not need to purchase bitcoin, just speculate with the prices of bitcoin and make money.
CFD trading is practised by many experienced traders and considered a safe investment in the market. Traders can also choose the asset in which they want to trade. In order to avoid the direct purchase of bitcoin, CFDs are suggested.
Reliable Brokers for Trading
Here are a few reliable and trustable brokers that you can consider for trading CFDs. The below-mentioned are the brokers that you can trust because they are regulated and offering the best trading features. A few brokers are:
The advantages of trading with these brokers are higher in number. Several features are offered by brokers for traders. Some of the trading benefits are:
- A demo account is accessible for all traders. A trader can make trades in situations that are real and you get fake funds for trading.
- A wide variety of educational material is freely accessible by traders. Beginners can learn to trade with the use of these materials.
- Trading tools are offered by the brokers so that traders can make profitable decisions. These tools are easy to use and provide real-time data.
- Dedicated customer support is provided by the brokers. Traders get solutions to their queries as soon as possible from the support team.
- Traders get a friendly trading platform that is accessible from any device such as mobile, laptop or desktop for trading.
- Several trading instruments and financial markets are accessible by traders and they can choose an instrument according to their preference.
- Commission-free trading is offered by these brokers and the swap and spread charges are also lower with multiple types of discounts.
These are the benefits of trading with these brokers. Traders can also compare other brokers that they find suitable. After considering a couple of names you can choose a perfect broker that fulfils your requirements.
The Bottom Line
Bitcoin trading is a profitable opportunity as it is continuously increasing in value since the day after its launch. Traders can choose a suitable payment method among different types of options. The cryptocurrency market is increasing day by day and it is generating higher returns for investors. Store your coins in the wallet provided by the platform.
You can exchange your money with cryptocurrency or bitcoin if you want to grow your money. This article will help you to get all the general details about bitcoin.