Trading And Selling Your Bitcoin For
Profit
Trading and selling your bitcoin can be a very profitable activity. You
probably know someone or heard about someone who bought bitcoins in
the early days when they were worth almost nothing, and ended up selling
each bitcoin for thousands of dollars!
Or you may know people who engage in trading bitcoins and are profiting
very nicely as well. It might seem easy, but the truth is, trading bitcoins is
not for everyone.
Beginners are especially advised to take caution and to be mentally and
financially ready before taking the plunge into this exciting high-risk and
high-reward world. When trading, it’s common sense to follow the ‘buy low
and sell high’ strategy so you can make a profit.
You don’t want to sell at a price lower than when you bought in because
you’ll be selling at a loss. But all these sounds easy on paper.
In the real world, when you’re dealing with bitcoins that’s worth hundreds,
thousands or even millions of dollars, if you don’t have the right mindset
and the financial discipline, you could panic very easily.
Especially if you’re trading bitcoins that represent your entire life savings,
your retirement fund, or your kids’ college tuition!
Bitcoin Trading Strategies
Common sense and self-control should take precedence over greed and
the idea of profiting thousands of dollars in a single day. Here are some
bitcoin trading strategies to guide you in the trading world.
Practice First
Learning the ins and outs of bitcoin trading is great, but knowing just theory
is different from real-world application. Some bitcoin exchanges offer a
demo account where you can play around and experience real-world
trading using real-time prices.
You’ll get a feel for the landscape, so to speak, and you’ll see for yourself
whether you’ve got the stomach for the high-risk game of bitcoin trading.
Plan Your Strategy
To trade bitcoins successfully, you need to have a good strategy in place.
You don’t just blindly follow the news and think that because everyone’s
buying bitcoins, then you should be buying too.
Have a plan in place on what price you should buy bitcoins at and what
price to sell them at to profit, and make sure you stick to that plan. This
means keeping your panic at bay whenever you see the price drop.
Invest Small Amounts
As part of your practice or training strategy, you should start small and
don’t go all in when you first trade. It is fine to lose all your ‘money’ in a
demo account, but when it’s real money, you don’t want to risk losing huge
sums on your first day.
Control Your Emotions
It’s normal to feel alarmed at the first hint of losing your money. However,
as you already know Bitcoin is very volatile, and in a single day, the price
can go down by hundreds or thousands of dollars. But the opposite is also
true. The price can just as easily go up in the next hour or so.
If you keep your emotions in check and think logically, you too can make
serious money with Bitcoin trading.
However, if you fail to control your emotions and you let your panic
overcome you, then you’re bound to lose.
Popular Bitcoin Trading Platforms
Now that you know some very useful Bitcoin trading strategies, it’s time to
learn about some of the most popular trading platforms for Bitcoin and
other cryptocurrencies.
Coinbase
Coinbase is one of the biggest digital currency exchanges in the world
today with over 50 billion dollars’ worth of digital currency exchanged since
- They currently serve more than 10 million customers based in 32
countries.
The platform is very easy to use, and you can easily buy and trade your
digital currency.
• To begin, you have to create a free digital wallet which you can use to
store your cryptocurrency.
• Next, you need to link your bank account, credit or debit card, so that
you can exchange your local currency into the cryptocurrency of your
choice.
• Once your account is set up and funded, it’s time to buy some crypto.
You have the option to buy bitcoins, ethereum, and litecoin. You can do this
either on their website or their handy mobile app.
Now that you’ve got some bitcoins, you can choose to start trading on
Coinbase’s GDAX (Global Digital Asset Exchange) trading platform
although this is geared towards more advanced and experienced traders.
For beginners though, it’s best to stick to Coinbase’s more newbie-friendly
interface. The good thing about Coinbase is that your digital currency is
fully insured while your fiat currency (local currency) are stored in custodial
bank accounts. The USD Coinbase wallets of US citizens are covered by
FDIC insurance, up to a maximum of $250,000.
To sell your bitcoins, ethereum or litecoins, you simply need to indicate the
amount you want to sell and the wallet you’re selling from. Then select the
linked bank account you wish to deposit your cash to.
At this time, Coinbase does not allow the proceeds of your sale to be sent
to a credit or debit card, so it’s important you link a bank account to your
Coinbase account.
Kraken
Kraken is one of the most trusted names in bitcoin and cryptocurrency
exchange since 2011. The company is also considered to be the largest
bitcoin exchange in terms of Euro volume and liquidity. In addition to
trading bitcoins, they also trade US dollars, Canadian dollars, British
pounds and Japanese yen.
Many international users love Kraken because it’s very accessible
internationally and they support many different types of national currencies
and cryptocurrencies.
Kraken offers many options for trading. You can easily trade between any
of their 17 supported cryptocurrencies with Euros, USD, CAD, JPY, and
GBP. They offer so many possible trading pairs, they have a very long
page dedicated just for their fee schedule!
To get started with Kraken, you need to create a free account. After you’ve
verified your account, you can then fund it with cash or cryptocurrency and
then place an order to buy bitcoins (or another crypto) on the exchange.
When your order request is fulfilled, you can then withdraw your
bitcoins/crypto to your wallet. Their web interface is relatively simple when
ordering, however, their trading tools are robust and are great for more
advanced users.
To sell bitcoins, you need to send your bitcoins from your wallet to your
Kraken account and then create a new order to sell or trade them for any of
the available national currencies. Once your order is filled, you can then
proceed to withdraw the cash to your linked bank account.
CEX.io
CEX.io is one of the most popular cryptocurrency exchange platforms
today with over 1 million active users worldwide. However, the company
wasn’t originally an exchange; it was actually established in 2013 as the
first ever cloud mining provider. While the mining aspect of the business
has since been closed, their exchange platform is clearly thriving.
Many users appreciate CEX.io’s pricing transparency. If you’re buying
bitcoins, they make it so easy for you to see how much your $100, $200,
$500 or $1000 is going to get you. You can also easily see just how much
bitcoin you can buy in British Pound, Euro, and Russian Ruble. The buying
price is updated every 120 seconds.
To get started, you need to create an account and add funds to it by using
your credit card (you can link any number of credit cards to your account),
or you can do a bank transfer, too. They accept USD, EUR, RUB, GBP, or
your local currency.
Once the funds are added to your account, you can easily buy bitcoins with
1 click. You then have the option of storing it in your CEX.io wallet, trade it
or withdraw to your personal wallet.
Selling bitcoins is also very easy on CEX.io. Simply have the bitcoins in
your account, then use their handy buy/sell section for instant cash, or you
can place an order in the Trade section of the site (you might get a better
exchange rate if you trade).
You can quickly withdraw your earnings to your Visa or Mastercard and
receive your funds instantly. Alternatively, for larger transactions, you can
withdraw via bank transfer or SEPA if you’re in Europe.
Bitstamp
Founded in 2011 in the UK, Bitstamp is one of the pioneers in Bitcoin
trading. They are constantly improving their services, and to date, they
allow trading of bitcoin, ripple, litecoin, ether and bitcoin cash. Bitstamp has
a good reputation worldwide especially since they accept trades from
anyone in the world.
All major credit cards are accepted as well, so it makes the platform very
friendly to international users. They also promise no hidden fees with
transparent volume-based pricing. They guarantee that 98% of digital funds
are stored offline for security.
Bitstamp does not sell bitcoins themselves. Instead, they provide a service
or platform where people trade directly with each other and buyers get their
bitcoins and sellers get their cash at the price they want.
To get started with buying and selling bitcoins, you must create a Bitstamp
account. You then need to transfer funds to your account via SEPA, wire
transfer or credit card. Once payment is credited, you can place an instant
buy order which will allow you to automatically buy bitcoins at the lowest
price offered on the Bitstamp market.
A second option to buy bitcoins is by placing a limit order wherein you can
set the price you are willing to buy bitcoins.
To sell bitcoins, you need to load your Bitstamp account with bitcoins first.
Once you’ve done this, you can then place an instant sell order to
automatically sell your bitcoins at the highest price offered on the market.
Alternatively, you can place a sell limit order where you can set the price at
which you are willing to sell your bitcoins. Once your bitcoins are sold, you
can proceed to withdraw your funds in USD or EUR currency.
Bitfinex
Since 2014, Hong Kong-based Bitfinex has been the world’s largest
cryptocurrency trading platform in terms of volume. This full-featured spot
trading platform allows trades among the major cryptocurrencies such as
Bitcoin, Ethereum, Litecoin, Money, Dash, Ripple, and more. Having such a
large volume of Bitcoin exchanges happening on this platform implies the
best liquidity.
This means you can trade a large volume of bitcoins at the price you want.
Bitfinex’s fees are also very low as compared to other cryptocurrency
exchanges on this guide. This is why a lot of people like trading on this
platform as more money goes to their accounts instead of being paid in
fees.
Funding your Bitfinex account is not as simple as the other exchanges
though. The only way to deposit money is via bank wire transfer which can
take days. On top of the delay, you’d also have to pay Bitfinex a 0.1% of
the deposit amount with a $20 minimum. Withdrawing your dollars is also a
headache as they only offer bank wire withdrawals. Your money may take
up to 7 days to post to your account!
To avoid this inconvenience, trading experts suggest getting your bitcoins
or other crypto elsewhere and then just transferring it to your Bitfinex
account. For withdrawals, you can withdraw your crypto to your wallet and
then sell it locally. This workaround means you just use Bitfinex strictly for
trading cryptocurrencies.
Are You Ready To Start Trading Bitcoins?
There are many more bitcoin and cryptocurrency exchanges we’ve not
been able to include in this guide. It’s best to perform due diligence and
research before selecting a trading platform. Just remember that whichever
cryptocurrency exchange platform you choose to do business with, you
must always move your cryptocurrency to a more secure wallet such as a
hardware wallet or paper wallet.
Don’t leave it in your exchange’s wallet as it’s at great risk of being stolen
by hackers. If you must store some in your online wallet, just keep the
smallest amount you can afford to lose.
