How to Trade Bitcoins Online

What is Bitcoin?

Bitcoins are digital currencies that can be exchanged without a central regulatory control. Some of the characteristics of bitcoins are include; they are decentralized, they are not physical, and they have value. You can refer to our previous article on Introduction to Bitcoins Trading. In this article, we are going to look at how to get into bitcoins trading.

Bitcoins have value and can be traded for fiat currency (for cash). Bitcoins prices fluctuate just like other commodities and stocks. However, for bitcoins the price fluctuations are very volatile. The price surge is mostly affected by certain factors such as demand and supply, news among other factors. When the demand for bitcoins is high, the prices go up, when the demand is low the prices go down.

News also influence the direction of the trend, whenever there is positive news such as the adoption of bitcoins as a payment method the demand will go up, however, if the press are negative such  as the hack of an exchange site the demand will be low as more people will be selling to cash out their money.

In bitcoins trading, you exchange the bitcoins for fiat currency and vice versa. You could be either buying or selling the bitcoins.

An illustration:

John trades sugar, he buys in bulk and repacks to sell at a higher price for profits. In the same way in bitcoin trading, one can buy bitcoins at a low cost and sell t a higher rate for gain.

Bitcoin Market

The bitcoin market is big and has a market capitalization of approximately $143 Billion. With 80% of bitcoins that can ever exist is in circulation, the market can still grow. The market capitalization is the total value of bitcoins in circulation; this is the price of one bitcoin multiplied by the total number of bitcoins. The number of bitcoins is capped at 21 Million beyond which more bitcoins cannot be generated, usually through Bitcoin Mining, Refer to this article about bitcoin mining.

What’s required to Start Bitcoin Trading

1. Capital
2. Bitcoin Wallet
3. Trading Platform
4. Working Strategy

Capital

To start bitcoin trading, you will need some money. It does not require huge capital investment. It’s something that you can even begin with as little as $10.

Bitcoin trading does not incur huge costs only the startup capital. Despite the high value of a bitcoin, you can buy it in units. One bitcoin is made up of units called satoshi named after the pseudonym of the person who invented it. This is just as the same way you could buy sugar for business in small packets instead of buying a whole Sugar bag.

Bitcoin Wallet

Bitcoins are stored in electronic wallets which can either be on mobile applications, online wallets, desktop wallets or cold storage wallets such as drives. We have an article on Bitcoin wallets you can refer to from here.

To start trading, you must have a wallet on the trading platform you chose. The wallet will be used to store the bitcoin you are trading.

Trading Platform

Bitcoin trading is mostly done from online platforms, the most common website you can trade bitcoins for fiat include; localbitcoins, Remitano, Coindirect and  Paxful (You can download their Tutorials by clicking on them) .

On these websites, you can buy or sell bitcoins and get paid or pay with Mpesa or other payment options. On the platforms, you trade with other people who could be from your country or even abroad.

The platform links the buyers and the sellers on one platform virtually, just like Olx however they operate differently.

For example, to buy bitcoins on Localbitcoins you will see some sellers and their selling rates. You can open a trade with any and once you send them the money, the bitcoins are credited to your online account.

When the prices go up you can sell the bitcoins you bought on the same platform, and you just find a willing buyer open a trade and once he or she has sent you the money the bitcoins will reduce from your online wallet.

Trading Strategy

A smart trader will always come up with a trading strategy. This will inform you when to trade and when not to trade.

For example, when its anticipated the prices will go up, you should be buying more to sell when the prices go up for profits.

There is more you can learn on bitcoin trading; it’s something that does not require so many technical skills just understand the concept and give a trial. You can take a free online course on bitcoin trading from here

To get a one on one training, you can send us an email or just comment on this article interested we will contact you.