Best Bitcoin Trading Platforms & Brokers for 2019
The easiest way to get your hands on some Bitcoins is joining a trading platform – also known as an exchange or broker. Much like traditional brokers, these companies have a stock of Bitcoin and other cryptocurrencies available to purchase. They can also buy cryptocurrencies in exchange for fiat money, or connect you to other people in the network in a peer-to-peer trading system. If you’re a beginner investor on the loo for the perfect trading platform, we’ll give you some useful tips and tricks. Please note: All trading involves risk and losses can exceed deposits.
First and foremost, what is Bitcoin and how does it work?
You might need to do some more detailed research on this, but we’ll sum up the essentials for you. Bitcoin is a decentralized digital currency based on a peer-to-peer protocol. Instead of being approved by a bank or another third party, Bitcoin transactions are approved by each and every person in the network. The approved Bitcoin transactions are known as ‘blocks’ that make up the ‘blockchain’ – a ledger that contains all the information about each Bitcoin transaction ever made. Bitcoin was developed by a certain Satoshi Nakamoto, whose real identity is unknown, but there are thousands of volunteer developer teams working on improving Bitcoin around the world. Bitcoin can be obtained from a trading platform, or ‘mined’ using computing power.
How to choose the best Bitcoin trading platform?
There are several aspects you should consider when choosing a Bitcoin trading platform. Your main concerns should be security and transparency, fees, accepted payment methods, and waiting times. Here are some detailed tips on choosing the best exchange for your needs:
Choose an exchange based in your home country. This will ensure that the platform accepts the currency you’re most likely to use (USD for the US, GBP for the UK, EUR for Europe, etc.) It’s also better to choose an exchange in the same time zone, as that will ensure you get prompt customer support.
That being said, make sure you check what payment methods are accepted before joining a trading platform. You want something that accepts credit cards, bank transfers, PayPal, or whatever other methods you’re most comfortable with.
Customer support is another very important factor. As Bitcoin trading is time-sensitive, you need to ensure that the broker can assist you immediately if something goes wrong. In the best case, they should have a responsive live chat with real people available 24/7, as well as phone support.
Fees are crucial. You should know exactly how much the Bitcoin trading platform charges per transaction and withdrawal of funds. All that information should be available on the exchange’s website – if it’s not, or they require your email address before giving you any information, it’s a red flag for lack of transparency. The fee can be either flat (for instance 1% for all transactions), or proportional (for instance 1-5% depending on the amount you purchase/sell.)
Waiting times are another big factor. Again, as Bitcoin’s price fluctuates every couple of minutes, you want to get your hands on it as soon as possible to minimize the risk of loss. It’s best to go for trading platforms that offer locked-in pricing, meaning you pay for the price of Bitcoin at the moment of purchase rather than at the time they are credited to your wallet. All the information on waiting times should also be available on the exchange’s website.
Security is paramount, and you should only opt for exchanges with https (secure) addresses. If the exchange offers 2FA (two-factor identification), it means your Bitcoins are kept extra safe.
Lastly, you might be wondering about data disclosure on Bitcoin trading platforms. Because of the great interest in cryptocurrencies, most Bitcoin trading platforms have implemented identity verification. They will require your personal information such as name and address, and sometimes even copies of documents proving that the information you provided is correct. If the Bitcoin trading platform does not require identity verification, which is the case of most P2P exchanges, they should at least follow know-your-customer (KYC) laws.
What are some tips and tricks for trading Bitcoin?
First and foremost, never invest more than you can afford to lose. Bitcoin and other cryptocurrencies are extremely volatile, and they can drop to under 50% of their value in just a couple of hours.
Don’t keep all your eggs in one basket – diversify your cryptocurrency portfolio. Bitcoin is the most popular cryptocurrency in the world, but it might be a good idea to do a bit of research on altcoins like Ethereum and Litecoin, and add a few of them to your portfolio.
Patience is a virtue – don’t rush to exchange your Bitcoin for fiat money at the first $20 you’ve earned. If we’ve learned something from the cryptocurrency boom, it’s that the more patience investors had, the higher their profits ended up being.
To sum everything up, a trustworthy Bitcoin trading platform can make a world of a difference to any investor. The exchange will become your main partner in earning money from cryptocurrencies, that’s why it’s crucial to choose the best one you can find.