How To Buy, Sell & Trade Bitcoin
Technology has revolutionised all aspects of our lives. Even our assets have become digital in recent times. One prime example of this is cryptocurrency, which is a virtual currency that uses cryptography for security and is based on blockchain technology.
The first and by far the most popular cryptocurrency is Bitcoin. You need to check how much one Bitcoin is currently worth in your local currency and then you can see how much you can invest before then making a purchase.
How to buy Bitcoin
The world of cryptocurrency is an unpredictable one. The price of Bitcoin is often described as being ‘volatile’. Prices keep on either skyrocketing or taking huge dips.
There is a risk factor involved with this digital cash, and before doing anything else you need to know where to purchase it from and how to store it.
Step 1: Install an offline Bitcoin wallet
Bitcoins are stored in digital wallets. The most user friendly wallet for exchange is Coinbase.
Coinbase is great for trading and having a ready pot of crypto assets to trade with, but your larger holdings should always be kept offline. Ensure that you use an offline wallet so your Bitcoins are secured properly.
Step 2: Pick the right trading platform
If it is your first time purchasing Bitcoin, then it is better to do it on an exchange platform. Do your research and due diligence upfront, as some exchanges are not as trustworthy as others. If you are just starting out, use Coinbase or Binance.
Setting up an account on Coinbase is easy. You will have to authenticate your identification by sending a photo ID or maybe even sending a live image of yourself through your webcam.
Once your identity is verified, you will be provisioned and account, and a cryptocurrency wallet. This wallet will help you in buying and selling Bitcoin and other cryptocurrencies. You can also use it to transfer your various funds and cryptocurrencies between exchanges.
Step 3: Confirm your deposit payment method
Bitcoin exchanges accept many methods of payment for depositing funds into your account.
Coinbase allows credit/debit card transfers and the payment method must be linked to your account. One method that is not currently supported by Coinbase is PayPal. You can’t use PayPal to buy cryptocurrencies on Coinbase or deposit funds into your account, however you can withdraw funds to a PayPal account.
Step 4: Buy that Bitcoin!
Now that you have setup everything, you can easily make your first Bitcoin purchase.
All you need to do is enter the amount of Bitcoin which you want to buy in the provided field and click “buy”.
It’s worth noting here that you’ll likely be buying fractions of a Bitcoin (since 1 Bitcoin is currently valued at tens of thousands of dollars). So don’t be surprised to see your purchase amounts denoted in decimals (e.g. “Buy 0.15 Bitcoin”).
Bitcoin pricing is volatile in nature so it might be prudent to not make a hefty purchase the first time. Instead, slowly work your way up and build out your portfolio as your confidence and familiarity grows.
You are now ready to trade your Bitcoin!
With Bitcoin, the options are vast. You can hold onto it, watch it appreciate in value and then sell it back to the market for a higher price in $USD, €EUR or whatever your local currency might be. Alternatively, you can also trade it for other cryptocurrencies, or ‘Altcoins’ (Alternative Coins), and make a hobby of trading.
How to sell Bitcoin
Once you have bought and stored your Bitcoin, you can use the Coinbase Wallet app to sell your Bitcoins. Enter your Coinbase login information and connect it to the Coinbase app to get started.
Now that your bank account is linked and exchange account is set up, you can deposit your Bitcoin on the exchange to make a sale. You can do this easily by selecting buy/sell from the top menu and then moving onto the sell section. After that choose Bitcoin as your currency and then deposit the funds to the correct destination.
Check the amount of Bitcoin you have and then choose the amount you are willing to sell. Before the sale is completed, there will be a short holding period. After that your Bitcoin will be ready to sell on the exchange.
Trading Bitcoins is easy to do in terms of the steps involved on an exchange such as Coinbase, but getting it right and consistently turning a profit is not an easy task.
This article is intended as a short guide to getting started with buying and exchanging cryptocurrency. You should always do your own research thoroughly. Read up, watch for market trends and then make the decision of investing in Bitcoin.