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November 5, 2020

Is Bitcoin Trading Really Worth It? 

Bitcoin trading is an entirely different game from the more usual Bitcoin buying, selling, and holding (which is sometimes deliberately misspelled as “hodl”). In practice, they may look pretty similar to each other. With trading Bitcoins, however, you are actively waiting to purchase Bitcoins at lower prices and then sell them when the prices go higher. If you are familiar with online trading, you’d get the hang of it immediately. 

When you trade Bitcoin through an automated trading platform, you can make profits out of its price movements––even without owning any Bitcoin at all. The platform will take care of all the necessary legwork. All you have to do is to make the right educated guess about the prices, and your initial investment is bound to profit. 

Should You Consider Trading Bitcoins? 

Bitcoin has only been around since 2008, but it has already managed to get past multiple roadblocks. So far, it has shown that it has what it takes to survive in a competitive financial environment against gold, silver, and long-established currencies such as the US Dollar. If you are thinking about trading Bitcoins, here are some reasons why it might just be worth it: 

1. More Stores Are Accepting Bitcoin as Payment 

Bitcoin is starting to be widely used as a payment method all around the world. Many stores and vendors are now offering users the option to pay using Bitcoin. Additionally, there has also been a significant boost in Bitcoin-related services. 

Nowadays, the general public is becoming more and more aware of the existence of Bitcoin, thanks to the media and the many content creators who publish about it in great detail. Bitcoin is clearly becoming more valuable to market traders, as the worth of one Bitcoin can range anywhere from $4,000 to $10,000. It might even go higher as the demand for it grows.

2. Bitcoin Allows You to Spread the Risk of Your Portfolio 

If you are worried about the fluctuating value of fiat currencies and government debt, cryptocurrency trading has a way of spreading the risk of your fund portfolio. Like the other trading platforms that you’re used to, Bitcoin trading also offers hedge funds and portfolio diversification. 

It is worth noting, however, that hedge funds shouldn’t be considered as an insurance. It is merely a strategy that can help you manage the financial risks of an economic recession, which lowers the value of most assets. 

3. Trading Platforms Have the Auto-Trade Feature 

Once you’ve set up an account and linked it to a trusted Bitcoin broker, you can now take advantage of the auto-trade feature. This will allow the platform to perform trades on your behalf. 

If you aren’t confident with your trading skills yet, you can set up a demo account to get a feel for it. Trying out the trading robot with a demo account allows you to determine which settings would be the best match for your preferred trading strategies and activities. 

Once you’re done playing around with the demo account, you can then begin modifying the settings to get the most out of your trades. Given the volatile nature of cryptocurrencies, you should still watch out for the price projections to ensure that you are cutting your losses as much as possible. 

4. They Also Allow You to Start with Minimal Investments 

You can start trading Bitcoins for as low as $250. It may not be much if you’re already familiar with online trading, but this relatively small deposit is enough to give you the right feel for the platform and earn a profit before you start putting in larger sums of money. 

Besides, it’s quite easy to reinvest once you start making money from your small initial investment. Once you make profits, it is recommended to withdraw a part of it for yourself and then reinvest another part for more trades. This strategy works better than just leaving your earnings intact within the system. 

5. You Don’t Need Actual Bitcoins to Trade 

Bitcoin trading platforms were developed so that users can profit off Bitcoin trades even without having Bitcoin themselves. This makes trading accessible because you don’t need to buy and hold any Bitcoins to enjoy the perks of performing trades with it. 

You just need to make a deposit, enable the trading robot to auto-trade, and monitor all the transactions during and after the trade. All trading activities will be managed for you, and the only thing you have to do is make educated decisions. 

Bitcoin Trading Based on Time Frames

Based on the points above, Bitcoin trading can be a worthwhile endeavor, provided that you make the right financial choices when you plan to do a trade. Its value will also depend on your trading strategies and risk appetite. For instance, here are the time frames where Bitcoin trading is generally good for: 

  • Short-Term Trading

    Good. The chances that the cryptocurrency market will collapse in the next few days or weeks is very slim. Hence, doing short-term Bitcoin trades that lasts for a few days to a few weeks is generally fine. 

  • Buy and Hodl

    Good. Investing in cryptocurrencies is relatively okay as long as it isn’t a big part of your overall fund portfolio. 

  • Medium or Long-Term Trading

    Not recommended. Currently, analysts and financial experts don’t have the full capacity to make solid long-term trading strategies. Cryptocurrency still faces many risks that can keep making its market value volatile. 

Conclusion 

To be successful in Bitcoin trading, you will need to do your research thoroughly and practice your trading skills consistently. The trading arena is filled with large, competent players who mostly profit from amateur traders who throw away their funds mindlessly. 

The cryptocurrency market still faces a lot of risks and like any other investment, making profits isn’t always guaranteed. Once you let go of your money, you should regard it as lost. However, if you carefully study the market and make informed decisions along the way, Bitcoin trading can be a profitable hobby that can help you grow your funds wisely. 

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