What is Bitcoin trading?
Bitcoin trading is just the same as trading foreign currencies (forex trading), stocks or commodities like gold. Investors can buy and sell Bitcoin on cryptocurrency exchanges in the same way traditional investors use financial exchanges to buy and sell fiat currency.
It’s possible to trade Bitcoin by simply buying low and selling it at a higher price. You can also trade Bitcoin as part of one of various currency pairs, such as fiat currencies (BTC/USD) or other cryptocurrencies e.g. Ethereum (ETH) or Ripple cryptocurrency.
The Best Places to Trade Bitcoin
Once you know how to trade Bitcoin, the next thing you need to do is find an exchange…
Since 2017, the world’s pioneer of social trading communities, eToro, has been supporting cryptocurrency trading across the leading digital assets. At the time of writing, eToro investors can trade the market values of 13 different crypto coins.
However, as we’ve explained in our eToro review, instead of asking you to physically buy, sell and store cryptocurrency, eToro allows you to profit from the price moves of Bitcoin and other Altcoins without having to purchase and own these assets. In practice, this is known as CFD trading.
There’s no need to use a cryptocurrency wallet when you trade here. You simply seek to capitalise on the asset’s price movements. eToro is the only Bitcoin broker to be regulated by both the UK’s Financial Conduct Authority (FCA) and the Cyprus Securities and Exchange Commission (CySEC), giving you 100% peace of mind when trading Bitcoin. Furthermore, the social aspect of eToro makes it easy for those new to eToro’s platform to discuss trading angles with experienced crypto investors within the community and even copy their trading portfolios. If you are prepared to get started in the CopyFund and generate steady profits overseen by the platform’s very own investment committee.
- Fully regulated by the UK’s FCA and CySEC
- Available in 140 countries
- iOS & Android apps to trade on the go
- Copy cryptocurrency investment portfolios of expert, trusted investors
- Easy to track the performance of your portfolio
- No known security hacks
- No edits to stop losses allowed on cryptocurrency trading orders
- Currently not available as a leading exchange in US and Canada
- $25 flat rate for withdrawals of all sizes
As we’ve explained in our 24 Option guide, this site has been in existence for more than a decade now but its focus has shifted somewhat since its early days. Initially, it was set up to be a forex and binary options trading platform but the cryptocurrency craze encouraged the platform to alter its focus towards the rising number of cryptocurrencies now available to buy and sell via CFD trading methods in the same manner as eToro.
- CySEC regulated
- No reports of any significant data hacks
- Liquid exchange
- Suitable for beginners and experienced investors
- Not suitable for investors that like to physically own their underlying assets
- Unavailable to the US and Canada
- Just 6 cryptocurrencies available to trade compared with 13 at eToro
This Asian Bitcoin trading platform has rapidly become one of the triumvirates of leading cryptocurrencye exchanges. Founded in Shanghai, China, Binance is already said to be worth upwards of $2 billion. As we’ve said in our Binance review, users can benefit from the lack of transaction fees for each deposit. Binance can execute up to 1.4 million Bitcoin trades per second.
- 0.1% trading fees
- 2-Factor Authentication
- Multi-platform and multi-language support
- Acts as a wallet to store crypto assets
- Up to 1.4 million trades per second
- It is only possible to buy Bitcoin here. Elsewhere, you can trade Bitcoin’s value against many other currencies
- No CFD trading options
- Advanced view trading platform difficult for beginner Bitcoin traders
- Known to store some elements of its users’ personal data
Coinbase is widely regarded as the world’s largest Bitcoin exchange. Based in San Francisco, Our latest Coinbase review says that this exchange is now available in 32 countries around the world, most notably the US, UK and Brazil. Although Coinbase only supports a small number of cryptocurrencies, it is a simple starting point for those looking to buy and sell Bitcoin in USD, Euro or GBP.
- Multi-signature security
- All deposits insured
- Users can link credit cards to their Coinbase account for crypto purchases
- A popular starting point for beginners looking to buy their first Bitcoins
- Only available in three currency zones – USD, GBP and EUR
- Cap of $1,000 investments in Bitcoin per week
- Only Bitcoin, Bitcoin Cash, Ethereum and Litecoin available
How to trade Bitcoin with eToro
Sign up with eToro
Click on our secure eToro link in the broker table at the top of this page and you will be taken to the following screen to sign up for an eToro account:
Deposit into your trading account
Follow the instructions to fund your account. eToro offers a wide choice of payment options including credit and debit cards, PayPal, wire transfer, UnionPay, Neteller, Skrill and many more:
Open your first Bitcoin trade
When you click on ‘Trade’ on the eToro Bitcoin trading page, the above box will come up, allowing you to enter a Trade or an Order.
How to trade Bitcoin with Binance
Sign up with Binance
Hit the ‘Register’ button in the top right-hand corner of the Binance homepage and you’ll be taken to the following sign-up page.
Deposit into your account
When you’ve logged in to your Binance account, hit ‘Funds’ at the top of the page and click ‘Deposits Withdrawals’.
Open your first Bitcoin trade
If you wish to purchase BTC with Binance head to the ‘Deposits Withdrawals’ page. Search for Bitcoin in the search bar and click ‘Deposit’ on the BTC row. You’ll then be given your BTC Deposit Address which you can copy and paste into your Bitcoin exchange as a send address.
Types of Bitcoin trading
There are four primary methods of trading Bitcoin and its market value:
Bitcoin CFD trading
If you aren’t overly fussed about physically owning your Bitcoin, CFD trading could be the way to go for you. With no need to open a crypto wallet, you can sign up to a broker exchange and start trading the Bitcoin price right away. Our choice is broker exchange eToro thanks to how it’s easy to use, well-regulated and offers innovative features.
Trading Bitcoin on exchanges
Although cryptocurrency exchanges can be a quick and easy way to buy and sell cryptocurrency, your ability to complete a buy or sell order and close a trade relies heavily on your chosen exchange having the necessary liquidity to take your closing buy or sell order. On the contrary, when you’re CFD trading, buy and sell orders can be placed immediately or queued ready for execution at set prices. Nevertheless, the best Bitcoin exchanges are regulated by reputable financial bodies and accept a number of payment methods for flexible investments.
Best trading wallets
If you decide to start trading on a Bitcoin exchange, you’ll need a crypto wallet to store your digital assets. There is an ever-expanding list of cryptocurrency wallets but, ultimately, your choice will depend on:
- If you’re security-conscious, it’s best to choose a hardware crypto wallet
- If you want convenience and accessibility on the go, opt for a mobile or online wallet
Bitcoin Futures trading
Futures trading is an agreement to buy or sell a set amount of Bitcoin on a set future date and at a set price. Speculators can ‘bet’ on what they believe the price of Bitcoin will be in future weeks, months, or even years.
Top 5 Tips For Successful Bitcoin Trading
- Take an interest in technical analysis of trading graphs to understand support and resistance points for Bitcoin
- Keep abreast of up-to-the-minute news which could affect market values
- Use stop losses to protect your investment fund
- Use prudent leverage within your means to maximise profitable trading positions
- Bitcoin markets are open 24/7 – pick your moments to trade when you’re most focused
Advantages & Risks of Bitcoin trading
- Trading Bitcoin is an attractive diversification from fiat currency and commodities
- Bitcoin is fast becoming a widely used payment method for goods and services so traded digital assets can be used for consumer purposes as well as an investment tool
- Considerable market momentum is driving liquidity and Bitcoin values against fiat currency
- There are many options if you want to buy Bitcoin as part of your investment. From exchanges to brokers and beyond, you can find what suits your needs
- Appeals greatly to long-term investors due to its emergence as a credible asset class
- Retail day traders will find trading opportunities daily with Bitcoin due to its volatility
- Some Bitcoin exchanges operate unregulated, leaving investors at great risk. However, crypto brokers that offer CFD trading for Bitcoin and altcoins are often fully regulated. For instance, in our breakdown of eToro we explain that they’re a fully regulated and licensed social trading community
- Bitcoin is a high-risk investment opportunity due to its volatility
- There is little historical support and resistance levels to undertake proper technical analysis of trading graphs
Trading Robots: Do they work?
Chatter about the legitimacy of Bitcoin trading bot and automation is rife throughout the community. As the cryptocurrency markets are 24/7, trading bots are ideal for executing trades quicker and more efficiently than any human trader. If you’re considering this option, head to the Bitcoin trading robot page of our site.
Trade Bitcoin Like a Pro
There’s no doubt that Bitcoin trading is a great way to diversify a traditional investment portfolio away from forex and stocks. The most important aspect of any Bitcoin trading is that you choose a platform that is safe, reputable and has your best interests at heart. We definitely recommend eToro for the reasons outlined in our eToro review.