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Author Topic: Bitcoin Trading  (Read 14 times)
loku123
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February 27, 2018, 03:19:22 AM
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Why trade Bitcoin?

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

Bitcoin Is Global

Bitcoin isn’t fiat currency, meaning its price isn’t directly related to the economy or policies of any single country. Throughout its history, Bitcoin’s price has reacted to a wide range of events, from China’s devaluation of the Yuan to Greek capital controls.

General economic uncertainty and panic has driven some of Bitcoin’s past price increases. Some claim, for example, that Cyprus’s 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 Bitcoin’s price movements, global nature, and 24/7 trading. It’s 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 Bitcoin’s history is the collapse of Mt. Gox. In Bitcoin’s 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. Gox’s Japanese bank account just to get their hands on some bitcoins.

Many users forgot one of the most important features of Bitcoin—controlling your own money—and left more than 800,000 bitcoins in Gox accounts. In February 2014, Gox halted withdrawals and customers were unable to withdrawal their funds. The company’s 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.

Gox’s 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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