i have some money that i want to invest in bitcoin in the hope it will continue to rise but i have a few questions before i start
what is the best broker where i can deposit my money ? bitstamp, btc e, mtgox ...? can you give me a few reliable one ?
-is btc e reliable ?
-how does leverage work in bitcoin ? i know how it work for forex but i don't understand what is the principle of leverage for bitcoin since you not opening a position in the market (like in forex) but buying something that will belong to you
-is leveraging your money to buy more bitcoins a good idea ? -can you suffer from a margin call like in forex for using too much leverage ?
-if i buy bitcoin from btc e can i transfer them to bitstamp and sell them ?
- is there a website where i can see the value of bitcoin from the different brokers ?
thank so much guys !
1) BTC-E is fairly reliable, although once you buy BTC from there, as normal, I recommend that you store it in some offline form. Note that if you're in the US you can't really use BTC-E. If you're spending a small amount from the US, Camp BX is a good deal. Otherwise, yea, use BTC-E.
2) Leverage works in Bitcoin the same way that it works anywhere else. The fact that you think that you can't "but something that will belong to you" with leverage shows that you don't understand the concept of leverage at all. It works like this: If you buy an asset (say Bitcoin), when its at $800, and it goes to $900, you make a $100 profit. But say you want more than that. So, you borrow another $7200 and use that $7200 plus your $800 to buy 10 Bitcoins at $800. Now it goes to $900, and you made a total of $1000 rather than $100, once you pay back your $7200 debt. The reason whoever loaned you $7200 agreed to the deal is because you promised to use the Bitcoins you bought -
all of them, including the one you bought with your own money - as collateral. As a result, you can use leverage to multiply the performance of any asset that can be used as collateral, including foreign currencies, Bitcoin, or anything else. Whenever you trade with Leverage in forex, what I just described above is basically going on behind the scenes, they just hide all of it to make it easier for noobs to lose money to the dealing desk.
3) Obviously you can suffer from a margin call like in forex if you screw up and whoever is loaning you money starts feeling that they might not get the money they loaned you back. Another noteworthy consequence of Leverage is that normally you have to share your private key with whoever is lending you the money - they want to be guaranteed that you won't just run with the Bitcoins. This, of course, puts
you at risk that
they will run with the Bitcoins. So I mean its OK to do it with smaller sums but no, I really wouldn't recommend taking like 10 BTC or whatever and leveraging it up.
4) Yes, you can buy Bitcoin from BTC-E and transfer them and sell them, but it would be a sort of pointless process.
5) There are tons of them.
http://bitcoincharts.com/markets/ is probably the most easy to use one IMO.
