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Author Topic: i want to invest in bitcoin but i have few questions  (Read 701 times)
hadora
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November 26, 2013, 06:05:01 PM
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 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 !
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theonewhowaskazu
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November 26, 2013, 06:20:34 PM
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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.

hadora
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November 26, 2013, 07:02:35 PM
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thank you bro!

the reason i asked you about transfering btc from btc e to bitstamp or mt gox is because bitcoins are sold at higher price there (btc e =841, mt gox= 890 ) so you can make a profit by buying from btc e and selling on mt gox
drrussellshane
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November 26, 2013, 07:06:28 PM
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thank you bro!

the reason i asked you about transfering btc from btc e to bitstamp or mt gox is because bitcoins are sold at higher price there (btc e =841, mt gox= 890 ) so you can make a profit by buying from btc e and selling on mt gox


But, in the experience of many users, MTGOX is less liquid, in that it is exceedingly difficult to timely withdraw cash.

That is why the MTGOX price in FRNs tends to be higher.

Buy a TREZOR! Premier BTC hardware wallet. If you're reading this, you should probably buy one if you don't already have one. You'll thank me later.
theonewhowaskazu
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November 26, 2013, 07:12:14 PM
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thank you bro!

the reason i asked you about transfering btc from btc e to bitstamp or mt gox is because bitcoins are sold at higher price there (btc e =841, mt gox= 890 ) so you can make a profit by buying from btc e and selling on mt gox


Thats a useless profit. In order to actually get the money you have to withdraw non-fiat from Gox, which doesn't work.

Keyser Soze
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November 26, 2013, 07:15:18 PM
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thank you bro!

the reason i asked you about transfering btc from btc e to bitstamp or mt gox is because bitcoins are sold at higher price there (btc e =841, mt gox= 890 ) so you can make a profit by buying from btc e and selling on mt gox


Generally the spreads are due to costs/limitations with sending dollars (or other traditional currencies) to and from the exchanges. For example, it is costly/difficult to get dollars into BTC-e and it is very difficult to get dollars out of MtGox.
hadora
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November 26, 2013, 07:23:13 PM
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thank you bro!

the reason i asked you about transfering btc from btc e to bitstamp or mt gox is because bitcoins are sold at higher price there (btc e =841, mt gox= 890 ) so you can make a profit by buying from btc e and selling on mt gox


Thats a useless profit. In order to actually get the money you have to withdraw non-fiat from Gox, which doesn't work.

i don't understand, do you mean you can't withdrawn your money from gox or you can't withdrawn your btc from gox ?

thank you bro!

the reason i asked you about transfering btc from btc e to bitstamp or mt gox is because bitcoins are sold at higher price there (btc e =841, mt gox= 890 ) so you can make a profit by buying from btc e and selling on mt gox


Generally the spreads are due to costs/limitations with sending dollars (or other traditional currencies) to and from the exchanges. For example, it is costly/difficult to get dollars into BTC-e and it is very difficult to get dollars out of MtGox.

ok i understand now why there is a huge difference in btc price now
which broker should i choose in order to buy and sell btc to make some profit ? bitstamp ?
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