Over the past couple of years, Bitcoin has grown in popularity substantially. As a matter of fact, Bitcoin is the leading cryptocurrency in the crypto market as of this moment. Despite the emergence of many other tokens, not one other cryptocurrency can seem to dethrone Bitcoin. How long will it reign supreme? To be honest, nobody knows. However, the near future looks safe for Bitcoin. In fact, after attracting all the attention from Wall Street and further, it could be a great time to buy in. Bitcoin is still developing and has still many layers to iron out but one thing for sure, it’s not going anywhere. Although one question remains, is it still possible to make millions off a cryptocurrency investment? All you have to do is look around you to answer that question. Every day there are self-made millionaires from crypto investments.
If I were to go out on a limb and hazard a guess, the reason you’re reading this article is that you seek the fortune that comes from Bitcoin trading. Many of us crypto enthusiasts/investors are wondering the same thing. Is the bubble over? Is it still possible to make millions from Bitcoin trading? Well, the Winklevoss twins seem to think so. They’ve tied up a large sum of their capital in Bitcoin. Not many individuals are willing to risk there own capital on such a hazardous bet.
Furthermore, these are the same individuals that came up with the original concept for Facebook. They could be onto something. Regardless, we need to do our research and justify our own investment decisions when it comes to investing in Bitcoin. In the following article, will take you through how you can, directly and indirectly, make money from Bitcoin trading.
The History Of Bitcoin Trading
As any reasonable investor will tell you, it’s important to know the history of your investment.
Established during the recession in August 2008, Bitcoin.org was registered. Just a couple of months later, on 3rd of January 2009, after a paper was published on peer to peer trading, the Bitcoin network went live. During the early days, Bitcoin traded at low of .06c a coin. Reason being many people had never heard of it or understood it’s actual application. However, it wasn’t until 2013 when the price of Bitcoin started to rally, reaching a high at that moment of $1000. Four years later, in 2017, it reached a new profound high of $17500. Surpassing the infamous tulip as the greatest bubble ever in financial history. During the 2017 price surge, all of the popularity and hype surround Bitcoin drove the price through the ceiling. Despite what many other analysts say, every investment comes down to one thing; Is there a buyer and is there a seller?
If you get a lot of both than you have a very liquid base. In return, you’ll get insane prices. Everyone from your average Joe to skeptical accountant wanted in on Bitcoin. Despite the fact they knew nothing about it. Forget all the hypothetical theories analyst were pedaling. They were nothing more than high hopes and conspiracy theories. Basic economics never lies. When a bubble occurs, everyone gets in for a short while, and then it pops. However, sooner or later the cycle starts all over again. As of this moment, Bitcoin currently stands at a price of $8000. Are you ready to ride the second wave?
Things To Do & Consider Before Starting To Trade Bitcoin
If you’re new to this, you’re probably a bit lost but don’t worry. Firstly, you’re going to need to set up an account with an exchange, assuming you’re not interested in mining Bitcoin. Using an exchange is the easiest way to gain access to buying and selling. Ensure that you choose a reputable exchange for Bitcoin trading such as Coinbase or CEX.
Once your account is set up, you’re good to go. However, as we mentioned earlier it’s important to understand what you’re buying and can you afford to buy. With that said, it’s important to do your research. Understand how the blockchain network works, Bitcoins future developments, how does it stand out from competitors, your current financial position, your future cash outlays, your contractual financial obligations, etc. It’s vital that you know what you own and why you own it. Never get into an investment blindfolded. Make rational decisions and ignore everyone rushing you into it. It’s essential you separate emotion from logic when investing.
Establish A Profitable Bitcoin Trading Strategy
In this world, there are two types of traders; long-term trader and short-term traders. In all honesty, I do not believe there is a buy and hold strategy when it comes to Bitcoin. When it comes to Bitcoin trading, to make profitable returns, you have to be an excellent short-term trader. If you want to make profitable trades, you’re going to need to study up on technical analysis which is the study of price patterns.
To profit off trading Bitcoin, you need to implement a plan. For instance, you need a daily routine, and as part of this daily routine you need to know;
- Your price patterns off by heart
- What times of the day is the market most volatile and for how long
- How quick is your internet to help you execute transactions on time
- Have all the latest Bitcoin news at your disposal 24/7 and be ready to profit off any irregular price movements
- Don’t get greedy. Walk away when you’ve made a sufficient return and knew when to cut your losses. The key to earning a profitable return is knowing when to walk away
- Don’t put all your cash on one trade. Diversify across different coins
- Never, ever spend money you can’t afford to lose
If you stick to these principles, you should have a very profitable time trading Bitcoin. On a closing note, it’s also crucial that you consider your taxes, commissions, and others which you occurred when trading Bitcoin. Only after all these things are considered, then you can establish how much profit you made.