Bitcoin was created in 2009 it quickly became apparent that there was the opportunity to generate an income from trading Bitcoin by buying and selling it against other traders in open marketplaces online.
Although the original
Bitcoin trading platforms available were relatively small and simple, the platforms that are available online for traders today are much more sophisticated and are some of the largest websites in the world hosting billions of dollars of trade each day.
This guide is breaking down how to make money with Bitcoin trading, starting with a look at what Bitcoin is and why trading Bitcoin has become as popular as it is today before moving on to look at a few of the best Bitcoin trading platforms on the market in 2021 and finishing off with a detailed detailed look at how to make money with Bitcoin trading.
What is Bitcoin?
Bitcoin revolutionized financial sectors when released in 2009 and has become the most valued crypto with a market cap that reached $1 trillion for the first time in its twelve years of existence, decentralized at the core and driven by a community of independent miners that process transactions on its network, it has become a means to profitable returns for network contributors and independent investors alike.
Saying it has come a long way since its inception would be an understatement as Bitcoin is now used and traded in markets spanning nearly all imaginable sectors, from music and gaming to finance and lending, Bitcoin has rooted its way into the fabric of our transactional lives, and with a limited supply in existence followed by ever-growing demand is expected to soar throughout 2021 and beyond.
Bitcoin is a crypto that enables its network to run and is a digital currency coming in the form of coins or tokens which, when transacted, are distributed and logged on a decentralized ledger, birthing the crypto era, Bitcoin was a modern-marvel creation enabling peer-to-peer transactions without involvement from banking institutions or government agencies, this made it appealing to early-on investors that foresaw and believed in its potential.
Why is Trading Bitcoin So Popular?
• High Volatility Means High Potential for Profit
Bitcoin has made many parabolic moves over the years from which many have profited, leveraging volatility for gains and buying crypto when prices drop, also known as ‘buying the dip’, can be profitable when timed accordingly as the greater an assets volatility the greater profits, and losses, can be, as such, it is imperative investors leverage volatility with caution and after conducting proper research.
Aside from spot trading, traders can leverage trade to enhance profitability, this lets investors to short or long cryptos which allow profits to be made whether prices improve or decline, one good way to profit from volatility is to use limit orders as these automatically open positions in the asset if or when its price reaches the cost inputted by the trader.
Given that cryptocurrency values can decline at any moment, presetting order size and price let traders execute orders at their desired price without needing to execute it manually, this is useful to investors who are not available during trading hours in which missed opportunities could occur, this is also a great technique to ensuring trades are made at price points conducive to the growth goals of the portfolio.
• Easily Accessible
Bitcoin is praised for its resilience to inflation and portability and is now a storage of wealth for millions of individuals around the world who find Bitcoin easier to manage and access, one of the greatest perks of BTC is that it is easy to acquire and can be bought in any amount, with hundreds of exchanges that let users purchase Bitcoin using altcoins and debit or credit cards, most find this asset type easier to access than physical commodity assets.
Unlike physical assets, like gold and silver, you cannot create or mine new Bitcoin, twenty-one million were created with only eighteen-million remaining in circulation, there will never be more, the small pool of coins combined with unprecedented demand will likely keep pushing its value to record heights, some even say a six-figure valuation is possible within one to two years, which would require its current price of $55,000 to nearly double.
Bitcoin values were largely influenced by hype, though once banking institutions began investing into it, investors both small and large began treating Bitcoin as the real-world asset it has proven itself to be, it is known for bullish runs and impressive single-day gains that are hard-matched by the traditional assets investors once solely relied on, this is one reason it popularized as investors have witnessed its rise time and time again and eventually stake a position.
• Futuristic Tech
Bitcoin is a cool asset but its technology is hot, as waves of institutional liquidity pour into its market even staunchly critics are finding it difficult to dismiss this twelve-year-old asset, which recently has shown no signs of retraction, if the past two years taught investors anything it is that BTC is far from dead, this gives credence to the investment thesis regarding BTC’s bullish proponents, which helped Bitcoin to become what some deem to be the greatest revolutionary technology of our time.
Technology is the heart of Bitcoin and is built on public-key cryptography which is a branch of computer science that uses complex math and digital keys to encode and hide data from those that do not have the private key needed to decode it, these keys let holders claim BTC but wallets, technically speaking, only store private keys and not actual assets as Bitcoin only exists on the blockchain, wallets are simply storage units of keys that allow users to access them.
Aside from the underlying technology that supports and secures Bitcoin’s blockchain, its decentralized platform will also help propel its adaptability to future technologies built on the decentralized model, considering many believe crypto to be the government-used currency of the future, and taking into account too that institutions are investing record-shattering sums into Bitcoin, the development of crypto-compatible products, services, and technology are likely to emerge in the not-so-distant future.
Where are the Best Bitcoin Trading Platforms?
• PrimeXBT
PrimeXBT is one of the world's leading Bitcoin trading platforms and one that has grown faster than any other platform over the past few years as it integrated a range of powerful features and tools and provided unprecedented levels of value to cryptocurrency traders.
[ur;=https://primexbt.com/platform]PrimeXBT[/url] manages up to $7 billion of trade every day and is widely considered to be one of the most respected and trusted Bitcoin trading platforms on the market in 2021, building a large user base and huge trade volumes as a result of the quality of the services offered on the platform.
Not only is Bitcoin trading available but also trading on a range of different cryptocurrencies including BTC, ETH, LTC, and EOS, along with trading of traditional assets like stock indices such as S&P500 and FTSE100, forex pairs such as USD/EUR and AUD/CAD and commodities such as gold and oil.
As well as this, PrimeXBT is a margin trading centric platform that provides industry-leading leverage of up to 100 X on or cryptocurrencies and up to 500 axonal traditional assets, with this being significantly higher than many of the major crypto trading platforms and providing high levels of opportunity for users on PrimeXBT.
• Binance
Binance is a popular crypto exchange with millions of daily-active traders that enjoy access to over two-hundred coins, to your unlikely surprise, Bitcoin is the highest traded asset on the platform and can be purchased using altcoins that are transferred to your wallet and then converted or by using a credit card, making it easier than ever for traders to invest and manage assets.
As a crypto exchange known for its competitive rates and suite of trading tools it is a useful platform for new and experienced traders alike, unlike some exchanges, Binance accepts users from all parts of the world and is often referred to as the best crypto exchange for investments of all sizes and investors of all experience levels.
Aside from its great reputation and vast assortment of coins they are a trusted and secure exchange on which users can access using two-factor authentication, which adds another step and layer of protection when traders access their account, another great feature of Binance is crypto-to-crypto exchanges cost only 0.1% per trade, which is among the lowest in the industry, and if using Binance Coin (BNB) to make trades will enjoy a fifty-percent discount on trade fees, letting you save and preserve profits even more.
How to Make Money with Bitcoin Trading
• Crypto Margin Trading
Margin trading is when funds borrowed from a broker are used to trade assets, which forms the collateral needed by the lender to protect the funds, margin is funds that instead are borrowed from a brokerage firm to make investments, buying on margin simply means that broker-borrowed funds are used to purchase securities, which in this case is crypto.
Margin trades increase the potential for profits by adding more risk to trades and should be done cautiously as it can bring both gains and losses to investment portfolios, this holds especially true when margin trading crypto as its volatility poses greater risks than traditional stocks, this is why new investors copy trade crypto, which is when you make the same investments as another trader with greater experience.
Crypto margin traders need to be cautious, especially ones with little to no experience, you may succeed if you have hedging or risk-management experience though even then funds can be quickly lost if unable to read and understand charts and trends, while even knowing entry and exit points do not remove margin trading risks it does open the door to new investment and growth opportunities for traders.
• Crypto Algo Trading
Algorithmic crypto trading involves the use of computers that are programmed to follow pre-defined sets of rules, based on these pre-sets, trades are automatically placed in order to produce consistent profits at steady speeds, these rules, known as the algorithm, range from machine learning models to quantitative strategies and can refer to any data and rules or combination thereof, including volumes and prices.
Algo trading adds more liquidity to markets as they bring huge volumes of orders and trades as, unlike human investors, computers do not require sleep or rest, are quicker at quantifying calculations, and do not suffer from emotional distress, algorithmic trading has become more accessible to individual crypto traders too which makes strategic trades easy to execute for even inexperienced investors.
Given the growth of exchanges far outpaced the growth of market participants, a unique dynamic arose in which opportunities to capture gains using even primitive algorithmic strategies are at their greatest, and since crypto markets do not close and are volatile by nature, automation and the ability to trade round-the-clock is imperative to ensuring profitable opportunities are leveraged and not missed.
• Ride the 2021 Bull Run
Billions of dollars in liquidity are pouring into crypto markets from institutional investors which helped Bitcoin and Ethereum, since the beginning of the year, to soar 400% and 800% respectively, all altcoins in existence now have a cumulative value of over $700 billion thanks to rising values across the board, that said, the onset of a bull run is here and will be a profitable ride for even short-sighted investors longing for speedy gains.
It is important to know that Bitcoin is now rarely used for trading and most no longer use it to move capital into other cryptos, instead, holders are saving them for the large, long-term gains most traders speculate it will produce, to put hoarding into perspective, over $35 billion dollars worth of Bitcoin has been earned in the past two years and over three million currently sit in addresses, which is over sixteen percent of all Bitcoin’s in circulation.
Lack of supply and growing demand, which not only applies to Bitcoin but other cryptos too, is what has triggered the ongoing bull runs that brought many coins to record-high values, and with big institutional investors, such as JPMorgan Chase & Co. Citibank, and Deutsche Bank publicly announcing their support of Bitcoin, entering the space, confidence among consumer investors has grown which attracted new waves of profit-hungry investors that helped prices soar even more.
Final Thoughts
Bitcoin trading has gone from a small set of activities conducted by a few thousand Bitcoin holders to becoming a global financial industry that deals with billions of dollars of trades each day and has millions of users around the world that access different cryptocurrency trading platforms in order to generate an income.
There are many different platforms online where Bitcoin can be traded in 2021, however we have listed a few of the best Bitcoin trading platforms that provide better services and tools and that are just generally better to use for Bitcoin trading.
If you like to learn more about the platforms we have recommended and how to start trading with them, check out PrimeXBT and Binance.