Learn How to Trade Bitcoin: [Most Comprehensive Quick Start Guide]
Let’s start learning how to trade bitcoins!
Trading Bitcoin is pretty straightforward once you get the hang of it. Being the main cryptocurrency, it is quite easy to buy and sell them whenever you want. Bitcoin has a history of volatility that has attracted many traders and media outlets to the ecosystem.
How to Trade Bitcoin: Quick Start Guide
Every time the price of Bitcoin rises, new investors and speculators, want their share of the profits. It is extremely easy for anyone to trade Bitcoin as the barrier to entry is very low. So how do you get your slice of the cake?
Well, this guide will help you make your business decisions. So before we get into the how, let’s start with the why.
Why should you trade Bitcoin?
The reason you should invest in Bitcoin, and cryptocurrencies in general, is because there is nothing quite like it. There are several features that make trading Bitcoin exciting and unique.
Bitcoin is not Fiat
Bitcoin is not a fiat currency, that is, it is not under the control of a single government. So instead of a single economy having absolute dominance over the price of the asset, the price of Bitcoin has reacted to a wide range of events.
Let’s look at some events in recent years that have affected the price of Bitcoin.
# 1 Brexit
The UK’s decision to leave the European Union has caused quite a stir in its local economy. As a result of this, the giants of the Binance exchange had stated that they had been overwhelmed by registrations for their New Jersey-based trading platform due to insane demand. Binance Jersey allows users to exchange Euros and British Pounds with bitcoin and Ethereum and access digital asset management services.
# 2 the demonetization of India
The demonetization was a move by the Indian Prime Minister, Narendra Modi, who earned Rs. 500 and Rs. 1000 banknotes of non-legal tender. Just 18 days after the declaration of demonetization, the price of Bitcoin on Zebpay, one of the major exchanges in India, rose from $ 757 to $ 1,020. (Back then, BTC was trending $ 770 in the US.
# 3 Trump’s election
In the immediate aftermath of Trump’s victory, markets began to fall. The Dow Jones, the S&P 500, and the Nasdaq were plummeting. In the same way, Australian markets lost $ 30 billion. However, Bitcoin was a completely different story. Just before election night, it jumped to $ 740 due to troubles the Mexican peso encountered. After that, it dropped to $ 705 and then $ 739 as soon as Trump was elected.
From these three cases, we can draw a simple and obvious conclusion. People tend to invest in Bitcoin when faced with unstable markets and hurdles that fiat currencies face.
Bitcoin is open 24 hours a day, 7 days a week.
Unlike the stock markets, Bitcoin is open 24 hours a day, 7 days a week. The reason is that securities markets are specific to the country in which they operate and generally reflect the working hours of that country. Anyone can buy bitcoins on most exchanges. There are hundreds of exchanges around the world that operate 24 hours a day, 7 days a week. !
Bitcoin is volatile
Bitcoin and cryptocurrencies, in general, are infamous for their rapid and frequent price movements. This volatility can help traders make money quickly and easily.
How does Bitcoin work?
Before investing in an asset, you should at least know how it works. We have covered the mechanics behind cryptocurrencies several times here in detail. However, for the uninitiated, we will give a brief overview. If you already know the mechanics, skip to the next section.
Bitcoin was created by an unknown programmer who goes by the pseudonym, Satoshi Nakamoto. Bitcoin works with blockchain technology.
The blockchain is a time-stamped series of an immutable record of data that is managed by a group of computers that are not owned by a single entity. Each of these data blocks (i.e. block) is protected and linked together by cryptographic principles (i.e. chain). Ok, what does that mean in simple terms?
Imagine a universal ledger that anyone can download and write. Anyone with a copy of that ledger can:
- Check the records that have been posted to the general ledger.
- Check the time those logs were recorded.
- You cannot modify any of the entries previously made because the ledger is immutable. This property of immutability is one of the most important characteristics of the blockchain and gains it through cryptographic hashing functions.
That’s what Bitcoin gave us, the first proper implementation of a technology that can act as an immutable and transparent ledger. This innovation gives us a completely incorruptible system free from human corruption since each and every transaction carried out on the blockchain can be verified.
How do the transactions work?
One of the most valuable things about Bitcoin is that you don’t have to go through a bank to send a transaction. As the community likes to say you are your own bank. So how do they manage to do that? Through public key cryptography.
Every Bitcoin user has a private key and a public address that is mathematically derived from each other. So how does it work? In fact, it is quite simple. The public address is like your account number and the private key is like your PIN code. When you receive Bitcoins, people will send them to your public address. You can then send your Bitcoins to anyone via your private key.