Bitcoin (and other cryptocurrencies) is unlike any other asset class for a number of reasons. From a traders perspective, one of the most notable being that it just never stops. While chatting with a friend of mine the other day, it got me thinking about how crazy my world has become. It’s better now that I’m a little more seasoned, but when I first started watching the price of Bitcoin I quickly like many others got completely enveloped into crypto time where things just never seem to stop. Everywhere you look within the space, you quickly realize that Bitcoin is an unstoppable force that just keeps moving. That’s not to say it is always on the up and up, for just like everything else there are good days and bad, bull cycles and bear, rekt tears and moon run tears. That said, despite it all, as time passes so too does the novelty and acceptance for the craziness of wrapping your mind around just how does Bitcoin trade twenty-four seven …
Just as there are all kinds of coins in the market, so too are there all kinds of preferences and strategies for how to trade bitcoin. This post then is intended to give more of a beginner level approach on common ways in which people go about trading Bitcoin on various platforms. By no means is this meant to be an extensive ‘how to make a killing trading Bitcoin’ or ‘jump on board the Bitcoin to the moon express as easy as your love for grandpa’s apple pie’ post, but rather, meant to aid anyone looking for a little reprise from the bombardment of TA and charts and in search of varying possibilities to continue exploring ways to trade another way.
When it comes to trading Bitcoin, on the macro level there are really only two potential ways – trading Bitcoin for fiat and trading Bitcoin for other cryptocurrencies. Within those however, there are various ways that one can trade, and these are completely tied to ones objective. Although I guess it is possible to just love trading so much that you just can’t get enough or stop, without a game plan this is likely to end in disaster. Probably then, it would be good before you get too heavy into trading that you define your end game beyond the point of wanting to drive a lambo on the moon. I mean honestly, at the very least it would be helpful to know whether that lambo is something you will buy with traditional currencies or a crypto currency, for how else could you ever possibly decide upon the best way for you to trade if you haven’t even sussed out that?!? Seriously though, in considering places to trade Bitcoin this is most likely as important a deciding factor as any. These then are just some of the random things that have over time crossed my mind and, for better or for worse, filled my preferences of my Bitcoin manifesto trading plays.
In terms of trading bitcoin for cash, there are a number of factors that one could examine. Having already examined How to Get Bitcoins in a previous post, I will forgo the initial buying of Bitcoin with fiat currencies even though in a very real sense of the term that entails a small part of trading. That noted then, here I will mainly be talking about cash deposits or equivalent stable currencies as Bitcoin trade pairings – of course the most prominent of which involves the trading of Bitcoin for USD. In saying this, please understand that I am by no means insinuating that you cannot trade in your Bitcoins for cash, but rather, although people may have the need to convert Bitcoin to USD or other fiat, doing so repeatedly just doesn’t seem to make much logical sense to me. Remember, buying Bitcoin and other cryptocurrencies is not necessarily the easiest thing to do at present, meaning that in order to get money into or out of the market, some means of middle exchange will for most be necessary – a process which more often than not incur a fee of some sort or another. Hence, after a while even for those still calculating in fiat prices, what they are usually referring to is not that cold hard cash buried under the rose bed in the back 50, but rather, cash held on an exchange or some pseudo fiat currency that is somehow perceived as having a stable valuation with it’s real world counterpart.
For those looking to trade Bitcoin for American Dollars directly, Kraken, Gemeni, Bitmex, Bitstamp, and Bittrex are all options that have proven their relative trust over time at least enough to generate a steady base cryptocurrency community traders.
In terms of a broader trade Bitcoin for cash scope, possibly the best options seem to be eToro (Euro, British Pound, Japanese Yen, New Zealand Dollar, Canadian Dollar, Australian Dollar, and Swiss Franc BTC pairings), CEX.IO (Russian Ruble, Euro, British Pound, and USD Bitcoin pairings), BitFlyer (Japanese Yen), Coinbase Pro (Euro, British Pound, USD), CoinMetro (Euro), Bitfinex (USD, Euro, British Pound, Japanese Yen), Changelly (USD, Euro, British Pound), and Coinmamma (USD).
At present the best places to trade Bitcoin overall in regards to centralized exchange stable coin markets seems to be Binance (USDT, PAX, TUSD, USDC, USDS), KuCoin (USDT, PAX, TUSD, USDC, NUSD, DAI), Huobi Global (USDT, HUSD) and Changelly (DAI, PAX, USDT, TUSD, USDC). That’s not to say that there are not other options, but these exchanges seem to have a good combination of good natural volume, high liquidity, community trust, and a dedicated stable coin variety.
Those looking to trade Bitcoin to increase Satoshi’s (aka amount of Bitcoin) have all of the above options as well as many more. Because Bitcoin is the big daddy of the crypto realm, beyond the niche exchanges dedicated to other chains such as Newdex for EOS explained here, there is not an exchange in existence that does not have a BTC trading market. A word of caution though, as exchanges these days seem to be a dime a dozen, and unlike traditional markets where regulations hold bad actors somewhat in check, no such safeguard presently exists in cryptocurrency making it imperative to tread lightly. As I have mentioned in just about every article that I have written discussing crypto, and particularly in depth in Best Places for Trading Bitcoin and Cryptocurrencies and Where to Trade Cryptocurrency, for the most part there are very few centralized exchanges that have proven themselves to be on my list of regulars. That’s not to say that there are not more, but for me the ones that strike out as being the best of the best when talking strictly Bitcoin trading due to but not limited to amount of pairings, liquidity, and security are as follows.
- Although I mentioned this previously, I cannot stress the amazingness of Binance enough. Not only does Binance have one of the largest markets of all the centralized crypto exchanges, but they just keep adding more to their exchange and growing. At present Binance offers BTC trading pairs with almost 150 other coins as well as BTC margin trading BNB, USDT, ETH, TRX, and USDT pairing options. Add to this the previously mentioned stable coin options, the ability to purchase Bitcoin with credit card, the SAFU hack ‘insurance’ fund, IEO token launch pad for new project listings, professionalism in which they deal with the unexpected (that in this market when it comes to security should always be expected), and the discounted trading fees for those holding even a small amount of the native BNB token on exchange, and it’s clear to see just how and why Binancehas become a fan favorite and the kind of place it’s good to be for various types of crypto trading.
- With about 190 BTC trading pairs, Kucoin is another exchange I cannot say enough good things about. In terms of customer service and usability, Kucoin seems with the exception of a few seems miles ahead of the majority of the go to exchanges I see people gravitate towards. Kucoin also has some very unique BTC pairings that are hard to find on other exchanges which makes it a nice balance for those interested in trading smaller cap coins that may not be listed on other major exchanges as of yet. Kucoin also seems to have continual ongoing trading competitions which could potentially profitable for those that are worthy allowing for another incentive for those that are going to be trading regardless. Finally, just as Binance has the BNB token, Kucoin has the KCS (KuCoin Shares) which allows their users to receive the benefit of reduced trading fees and enjoy some exchange fee profit dividends for holding this coin on their platform. If you have not checked it out yet, I strongly suggest you drop on in and at the very least have a gander, as I’m almost sure once your there you’ll continue to meander.
- As some of you might already be aware from my recent CoinMetro: Redefining Banking in the Digital Age post, “CoinMetro is a fast, easy, fully licensed and compliant platform that provides a link between traditional finance and the digital asset economy.” Although relatively new on the exchange scene, one nice thing about CoinMetro is the variety of trading platforms available all in once place. Traders have the options to choose between the simple, intermediate, exchange, and margin platforms with BTC pairings including Bitcoin Cash (BCH), Ethereum(ETH), Ripple (XRP), Litecoin (LTC), OMG, ChainLink (LINK), XCM, and the EURO. As in the case of the previous exchanges mentioned, the XCM CoinMetro exchange coin will offer incentives to traders of all the platforms and pay out dividends to it’s holders. Despite the smaller number of offerings and necessity to KYC for compliance reasons, CoinMetro seems to be well on track to become competitive with the best as they work toward adding new coins, continue implementing their vision, and building up a user base as big as the rest.
- Another exchange that is quite good for trading is Huobi Global. Much like Binance and KuCoin, Huboi Global is one of the more popular exchanges and offers some good liquidity and decent trading pairs for Bitcoin (BTC) as well as more advanced traders the option for leverage or margin trading. Huobi Dm also offers weekly, bi-weekly, and quarterly contracts trading for Bitcoin (BTC), Ethereum (ETH), EOS, Litecoin (LTC), Ripple (XRP), Bitcoin Cash (BCH), and Tron (TRX) using leverage options of 1x, 5x, 10x, and 20x. Essentially this allows users to make potential of profit from ‘the rising/falling of digital currencies prices by going long or selling short based on their own judgement’ in a ‘kind of digital currency derivatives trading’. Huobi token holders also get a say on which coins get listed through their listing process which may be good for Bitcoin crypto traders as these have the potential to be well sought after for those that voted to have them listed.
- CoinSwitch allows users to swap over 300 other crypto currencies and fiat/stable coins. This exchange is more of a gateway to swap just about every pairing imaginable utilizing the exchanges listed above and others they are partnered with. Think of it more along the lines of utilizing bookings.com or cheapflights.com whereby CoinSwitch acts as a 3rd party finding the best real time rate to get into or out of the coins and pairings you choose. This however can prove to be beneficial to Bitcoin traders as it will go through a plethora of exchanges for the best possible price without the need to register for and keep track of all the individual locations, logins, and other necessary issues ones.
- Image: Bloomberg
- “BitMEX, a peer-to-peer trading platform, offers traders the ability to buy and sell contracts on up to 100x leverage on perpetual and futures contracts. During the last bear market BitMEX being one of the only exchanges dedicated entirely to contract trading was the place those seeking to profit during the drop wound up. Offering a high source of contract liquidity and a range of order types for opening and closing positions, ask just about anyone that is active in crypto trading the question ‘where can I short cryptocurrencies?’ and BitMEX is sure to be top of the list. “BitMEX only handles Bitcoin. All profit and loss is in Bitcoin, even if you are buying and selling alt-coin contracts.” Tradable assets include Bitcoin (XBT), Cardano (ADA), Bitcoin Cash (BCH), EOS Token, Ethereum (ETH), Litecoin (LTC), TRON (TRX), and Ripple (XRP). An array of order types (market, limit, stop, stop limit, trailing stop, take profit, and more) and other available features are present allowing traders to better customize their trading style much more than straight up mainstream exchanges with a whole host of perpetual and future contract options.” (Source)
- “Deribit is a Bitcoin and Ethereum futures and options platform which allows users some advantages, especially pertained to account management and options trading, over other common competitors in the space. Traders “can set up different sub accounts, cross margin between accounts as well as get a comprehensive breakdown of your trading statistics… [and participate in] what is called a ‘perpetual futures’. These are essentially just contracts that do not have an expiry date. You can think of them as a rolling futures contract and they are equivalent CFD’s (Contracts for Differences) and spread betting derivatives. When you move on over to the options exchange, you will be presented with all of the option markets. This is probably a bit more complicated to the uninitiated trader when they first take a glance at it. They present you with the different expiries, option type and strike on the platform… [and] give you other important data like the volatility, Delta, open interest… [alongside] extensive documentation and content to help you get started trading. These include overviews of their trading instruments as well as more general information about the exchange itself.” (Source)
- “ByBit ‘is a cryptocurrency derivatives trading platform … registered in the BVI… headquartered in Singapore and has offices in Hong Kong and Taiwan. [With] users from all over the world … provid[ing] 24/7 multi-language online customer service … committed to creating a fair, transparent and efficient trading environment.’ The platform presently offers BTC/USD, ETH/USD, EOS/USD, XRP/USD perpetual swap trading contracts with up to 100x leverage.” (Source)
- *Please be aware that margin and leverage trading are much more risky than both regular exchange trading and traditional markets. As BitBrain, one of the many prominent technical analysts contributing to Trybe noted recently in the comments of CoinMetro: Redefining Banking in the Digital Age, ‘the markets are highly volatile, fickle and things could go wrong very fast.’ For those that do give decide to give margin and/or leverage trading a go, I would suggest that you start small and go slow. Just about every trader I know has at some point been liquidated or had their account as we say in crypto rekt. As the old adage goes, don’t let the potential upside blind you to the risk of possible, and more than likely for a beginner, immanent failure. That’s not to say it isn’t worth a play, but going in blind when it come to high risk high reward just isn’t the way. Get first things first out of the way and make sure that you have a solid game and exit plan before you dabble a little in margin or leverage play.
When it comes to trading then, my strategy is actually quite basic – that being don’t get rekt. Seriously though, the strategy that I use personally or that of any other trader that you might find value from is simply a rough guide at best. Far too often do I see people writing or speaking online that it’s painfully obvious that blind mice followers are being completely destroyed by following the herd mentality of what is plastered over the mainstream charts as legit TA or trading techniques that ‘make you thousands the easy way’. That’s not to say that there are not some good people out there focused on trading cryptocurrencies that have informative value, but rather be cautious of who you follow and educate yourself on the basics before you delve into any kind of trading.
“Fundamental analysis studies everything from the overall economy to industry conditions to the financial condition and management of companies…. [whereas] technical analysis… involves studying statistics generated by market activity, such as past prices and volume… to identify patterns and trends that may suggest… move[s] in the future” (Source). Although dependent upon who you talk to fundamental analysis may have some merit in regards to cryptocurrency, the general consensus from what I can gather seems to be any merit it may have has more to do with long term investing or HODL trading. For this reason as the purpose of this article is focused on trading Bitcoin, I will forego for the most part the fundamental analysis in favor of a more TA centric discussion.
First off then, for those interested in TA its important to understand the terms associated with the the process. What Bitcoin Traders Should Know About Technical Analysis offers a really nice overview on TA when it comes to Bitcoin. In addition, recently TRYBE.ONE has been lucky enough to have a great series of introductory posts outlining and explaining this terminology, so anyone new to trading or just wanting a quick refresher would be good to check out KingKlauz. Once you’ve begun to wrap your mind around the terminology from there, it would be worth it to keep an eye on the main feed and pop in and out of some of the other analysts that that make regular appearances. All have differing tones in relaying their analysis and styles in how they trade meaning there is a lot of information to absorb for those that so choose to. Do bear in mind that although I quite enjoy reading what others surmise from charts, it is not recommended to follow blindly. This is not a marriage contract to instant wealth so anyone telling you now to buy now or forever loose your piece should be treated with the utmost caution. Solid fundamental or technical analysis is a far cry from shill anything to make a buck, and the majority of those I follow will tell you continual that they are not financial advisors and caution you against following them or anyone else blindly. For me, it’s kind of the difference between using a dictionary to check the meaning of a single word in another language as opposed to a google translate copy and paste paragraph into a report; the first will enable you to command a better understanding through guidance of practice towards linguistic fluency, where as the second will end about as well as that Japanese kanji tattoo whose meaning you thought you knew but turns out, makes absolutely no sense to anyone but the drunk parlor maid that picked it out for you to enable their paycheck from a someone else’s drunken mistake.
As for strategies, well as any trader will soon find out there a plethora of TA based strategies for any given scenario, situation, experience level, and individualistic trading preferred bias imaginable. In the end it’s best to experiment small with a variety until you learn just what suits your style and needs best. Although in the the game of trading nothing is certain, especially with an asset class as volatile as Bitcoin and other cryptocurrencies, one thing that I can honestly convey beyond a shadow of a doubt is that you’ll never win them all. In fact, it’s more than probable that at times you will feel like you must be the worst possible trader that has ever existed, but bear in mind that it is the mistakes that traders make, usually those born solely out of emotion that is the impetus for getting rekt. All traders have lost, it’s part of the game. And like anything, it takes time to find your niche and match what you understand about your character to the particular style of trading that suits you best. Although this is by no means comprehensive, here is a basic rundown of some of the most common strategies and other relevant beginner level information to what traders commonly employ in their Bitcoin to fiat, Bitcoin to stable coins, or Bitcoin to alt coin trading arsenals.
In the end, ask any established trader out there how they trade Bitcoin and the answers will be as infinite as there are stars in the sky. Different traders will find scalping, range trading, day trading, swing trading, position trading, and arbitrage suits them and their goals in varying ways. Some will use one consistently more than others while others will change it up depending upon the state of the markets and real life time and responsibilities. For some devising a winning strategy for day trading Bitcoin will consume every moment of every day, while for others, longer term ranges based off of signals such as the daily, weekly, and monthly EMA will be a better fit for the busy lifestyle they already lead. Basically as I’ve said countless times, start small and go slow. Find the methods and strategies that work with your strengths and weakness the best while taking your time to improve and grow. Practice as you progress and get some added exposure from those out there that have experience, preferably those whom are open and honest with verifying their trades in order to both keep and prove themselves accountable. For those that may not be familiar for how such a thing appears or works, I strongly suggest you check out the daily video and live stream analysis of Workin2005 and Krown’s Crypto Cave. Not only do they showcase this very well, but from an overall educative TA perspective at least in my humble opinion, literally two of the best.
No matter how you slice it, learning at least a bare minimum of trading skills is likely a worthwhile endeavor. Although this piece is primarily focused on the trading of Bitcoin, the general process in regards to trading Bitcoin Cash, Ethereum, EOS, Stellar, Ripple, Tron, NEO, ChainLink, and other top coins will remain from a TA perspective quite similar. Beginning with Bitcoin though does offer more options, especially compared to other alts, as well as more liquidity, and considering the state of how everything seems to pretty much remain for the most part coupled to Bitcoin price action, likely the most logical place to start. Add to this the number of people looking at moving into investing and holding Bitcoin either individually or through various institutional avenues such as Bakkt, Fidelity, and E*Trade, the ability to understand price action and movements of Bitcoin I believe will become all the more imperative. In fact as blockchain technology advances and exposure from individuals and corporations alike begins to filter more into the mainstream of both media and everyday life, I expect more traditional investors to begin questioning the validity of the false media claims about Bitcoins shortfalls and potential for long term success.
When can you buy Bitcoins on ETrade, TD AmeriTrade, or Fidelity, and how will the ability to do so impact crypto?
With the recent price serge in Bitcoin there has been a lot of questioning just where this ‘new capital’ is coming from. Recent announcements have hinted that it will soon be possible to buy Bitcoin through institutional means.
- “As Bitcoin price surges once again, interest has returned to the crypto market in a major way. Not only are crypto powerhouse mainstays like Coinbase and Binance doing more than ever to cater to the growing demand across the crypto market, traditional asset managers like Fidelity have begun to enter the emerging market in hopes of bridging the gap between the asset class and institutional investors. The latest major, traditional Wall Street investment firm to be rumored to be launching a cryptocurrency-focused trading desk, is E*Trade. And according to reports from around the web, the firm may have started targeting crypto traders via search term advertising, lending credence that the rumored trading desk may be closer to launch than expected.” (Source)
For those wondering can I buy Bitcoins on etrade this comes as good news as despite Fidelity only offering this service to institutional investors, E-Trade Financial will allow investment by retail investors (Source). However, in regards to the general sentiment, “the new institutional players that are entering the sector have not specified if they will enable consumers and traders to have access to the private keys of the cryptocurrencies they trade” (Source).
As for how the overall markets will react in real time to the masses being enabled to purchase Bitcoin through mega corporate institutions, on that I have no idea. Until that day I guess, best to just ride the uptrend trade wave and tread lightly as normal putting aside questions regarding buying Bitcoins through ETrade and other institutional organizations for those that hopefully aid via default logic of supply and demand in the ease of continuing over the long haul to trade a rising asset class on a scale never before seen.
And on that note ladies and gentlemen, my not so brief introductory guide when considering how to trade Bitcoin lock, stock, and two smoking guns has come to an end. As always, thanks for droppin’ on by and do enjoy all that life in safu crypto trading and beyond has to offer until next we have the pleasure to cross paths again.
Your Trybalist in creative arms, Jimmy D
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- Please note: Although I have to the best of my ability done my due diligence in researching this piece, I am not a financial advisor and assume no responsibility for any losses incurred on the readers part for any investments or products supported obtained from this post. Please understand that it is the readers responsibility to look after and maintain their own finances and perform all due diligence on their own part for their personal and financial well being and safety and not rely on myself or others in this space to keep them safe.
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Jimmy D is a verified member of CryptoPilots, a community devoted to Quality Content in Crypto. Find me also on TRYBE.ONE, Minds.com, PublishOx, Twitter, Jimmy D Presents Facebook Group, and Murmur (kansaikrypto).
