Why trade Bitcoin?

Before we show you how to trade Bitcoin, its important to understand why Bitcoin trading is both exciting and unique.

Bitcoin Is Global

Bitcoin isnt fiat currency, meaning its price isnt directly related to the economy or policies of any single country. Throughout its history, Bitcoins price has reacted to a wide range of events, from Chinas devaluation of the Yuan to Greek capital controls.

General economic uncertainty and panic has driven some of Bitcoins past price increases. Some claim, for example, that Cypruss capital controls brought attention to Bitcoin and caused the price to rise during the 2013 bubble.

Bitcoin Trades 24/7

Unlike stock markets, there are no official Bitcoin exchanges. Instead, there are hundreds of exchanges around the world that operate 24/7. Because there is no official Bitcoin exchange, there is also no official Bitcoin price. This can create arbitrage opportunities, but most of the time exchanges stay within the same general price range.

Trading Risks

Bitcoin trading is exciting because of Bitcoins price movements, global nature, and 24/7 trading. Its important, however, to understand the many risks that come with trading Bitcoin.

Leaving Money on an Exchange

Perhaps one of the most famous events in Bitcoins history is the collapse of Mt. Gox. In Bitcoins early days, Gox was the largest Bitcoin exchange and the easiest way to buy bitcoins. Customers from all over the world were happy to wire money to Mt. Goxs Japanese bank account just to get their hands on some bitcoins.

Many users forgot one of the most important features of Bitcoincontrolling your own moneyand left more than 800,000 bitcoins in Gox accounts. In February 2014, Gox halted withdrawals and customers were unable to withdrawal their funds. The companys CEO claimed that the majority of bitcoins were lost due to a bug in the Bitcoin software. Customers still have not received any of their funds from Gox accounts.

Goxs catastrophic collapse highlights the risk that any trader takes by leaving money on an exchange. Using a regulated Bitcoin exchange like Kraken can decrease your risk.

Your Capital is at Risk

Remember that as with any type of trading, your capital is at risk. New traders should start trading with small amounts or trade on paper to practice. Beginners should also learn Bitcoin trading strategies and understand market signals.

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