BTC passed the $60,000 mark in early 2021, according to cryptocurrency market analysts, this is not the limit for the 'first digital'. The rate hike forecast is based on statistics from major investment firms. More than 30% of Fidelity Investments' clients have added cryptocurrency to their investment portfolios, a move that doesn't look like a crazy risk for a company with $2.5 trillion in assets. Assets under management at analyst firm MicroStrategy are approaching 100,000 BTC.
Large institutional players are entering the digital currency market. After halving, bitcoin mining has declined, the number of new market entrants is growing exponentially, and the situation is encouraging the price of popular cryptocurrencies, especially BTC bitcoin, to rise.
Bitcoin is settling into a new "corridor" rate, in the range of $45,000 to $60,000, there is time to understand the methods of bitcoin trading.
The best place to trade bitcoins is a cryptocurrency exchange and investment platforms with similar functionality.
Cryptocurrency exchanges provide two options for bitcoin trading:
- Bitcoin trading at a fixed rate with payment at the time of the transaction, this trading option is called spot trading.
- Margin trading in bitcoin, this trading option allows the trader to take credit from the exchange to trade and thereby increase their earnings. Margin trading allows traders to profit from both increases and decreases in bitcoin exchange rates.
Buying and selling bitcoins at a fixed rate at the time of the transaction is technically the easiest trading option. A user needs to register on a trading platform, fund the account with euros, dollars or cryptocurrency. Choose the right moment for the transaction, sometimes exchange players use orders - an order to buy or sell when the asset reaches the right level, and execute the transaction.
The balance of some exchanges cannot be filled with an ordinary currency - dollars or euros. Users of such exchanges have to find a convenient platform to buy cryptocurrency to enter and a suitable digital currency.
Chinese traders buy Tether stable coins to start bitcoin transactions on exchanges. A novice investor in the EU and North America does not need to look for intermediate links to buy bitcoin.
With margin trading, a trader can make trades for many times the amount of his or her funds on a cryptocurrency exchange deposit. Trading is done with funds from the exchange, and the trader receives bitcoins from the exchange as a loan. The exchange receives a commission from the trader for using the cryptocurrency.
Leveraged trading is done from a separate account. Crypto exchanges determine the amount of the minimum deposit and the amount of leverage.
There are two possible outcomes for leveraged transactions: the transaction closes with a profit, the trader returns the credit to the exchange, pays the commission for use, and the margin from the transaction remains in the trader's account or, if the transaction is unprofitable, the exchange deducts all funds from the client's account to compensate for the loss. Crypto exchanges require traders to keep a certain amount on the general exchange balance for the duration of the credit support.
Trading cryptocurrency on margin is expensive, before taking credit from a cryptocurrency exchange, you need to calculate the transaction carefully. Deviations from the calculation during trading are a signal to stop the trade and return the credit to the cryptocurrency exchange.
HOW TO START MARGIN TRADING ON A CRYPTOCURRENCY EXCHANGE
The terms and conditions of user credit for margin trading are similar. Margin trading for a user starts with a KYC procedure.
Cryptocurrency exchange with billions in turnover, even at interest, will not give an anonymous user a single satoshi.
After the KYC procedure, the user will be able to create an account for margin trading. Before accessing the wallet, the user will have to confirm through a special agreement form that they are aware of the rules of margin trading and understand what the consequences will be in the event of failure.
Once a margin account is activated, bitcoins can be transferred to it from the main account for trading.
An average marketplace charges between 0.02 and 0.03% per day for the use of the exchange's funds. In a month, the client will have to pay the exchange from 6 to 9% of the credit amount. The funds in the margin trading account sent from the client's primary crypto wallet are used by the exchange to secure the loan. It is common practice to establish a 3x or 5x leverage for all clients at the start.
The customer's crypto wallet page for margin trading has a margin indicator, which also serves as a scale for measuring the level of risk.
The level of risk varies depending on the state of the market. When the margin is above 1.5, the level of risk is considered acceptable. If the margin level drops to 1.3, the client receives a margin call, a reminder to either increase the collateral or repay the borrowed funds. At a margin level of 1.1, the platform will sell the client's assets at the current price to repay the debt.
Margin trading, if successful, will increase your client's profits by leveraging and if negative, the loss on the trade may also increase.
HOW TO DO SPOT TRADING
Many exchanges do not require KYC to begin spot trading. Obligatory verification is required to increase the amount of funds withdrawn from the exchange. In some cases, without verification user can withdraw not more than 2 BTC per day, after passing the procedure the limit will increase to 100 BTC.
An alternative to spot trading is long-term investments. The Broex platform is present in this direction, offering clients some advantages:
A focus on long-term investments. Clients are protected from short-term volatility, which can be detrimental to them
Mandatory verification. Customers are shielded from fraudsters - only identified visitors and assets with an untainted reputation in corrupt schemes are present on the platform.
Easy operations. Registration takes no more than 5 minutes, just an email address. Transactions are done in a couple of clicks.
Purchase by card. Every Broex user can buy BTCs for USD or EUR with his bank card.
Necessary tools. Cryptocurrency wallet with balance indication, selection of digital currencies from three dozens of well-known ones, rate change graphs available to customers.
A focus on English-speaking users. A website with full English language support and English speaking support team ready to help 24/7.
BITCOIN EXCHANGE RATE FORECAST FOR 2021-2022
Every day in the cryptocommunity news there are predictions prospects of bitcoin. Cryptocurrency industry leaders believe that bitcoin will experience explosive growth soon. That is the opinion of Galaxy Digital cryptocurrency bank head Mike Novogratz, Bitcoin Foundation board member Bobby Lee, Morgan Creek Digital co-founder Anthony Pompliano, and venture capitalist Tim Draper, head of Draper Associates. Pompliano is sure that bitcoin will cost $100 thousand by the end of 2021, Draper thinks that in 2022 the price of 1 BTC will reach $250 thousand.
Time will tell if the market leaders are right or not.
There are several methods to make money trading bitcoin. Given the predictions of market leaders, all methods will be effective in the growth of the rate.
When choosing a method, you should remember the main thing - bitcoin margin trading promises a high level of income, but has a high level of risk. Before you start trading, to get access to borrowed funds you will have to pass KYC procedure, transfer personal data to exchange administration. Is the prospect of high earnings worth the same high risk?
Bitcoin spot trading has a lower level of risk. The success of trading depends on the choice of partner, the trading floor for transactions.
The easiest and least risky way is long-term investments. In the cryptocurrency investment segment, Broex is the undisputed leader.
Bitcoin has a short history; as the 'first digital' grows in prominence, the exchange rate will certainly rise. As the experience grows, a participant can try his or her hand at the margin or spot trading Bitcoin, but for a beginner, investing is the way to go.