Bitcoin Trading Guide

Bitcoin is a phenomenon that is taking the financial world by storm and everyone from amateurs to seasoned professionals is scrabbling to try and understand it. Since its initial launch in 2010, it has grown at an exponential rate, rising from just $0.39 dollars a coin, to its current value of $7300. Clearly, anyone with an insight into how to trade them stands to make colossal amounts of money. However, they are complicated and trading with the wrong companies or in the wrong way, could lead to dramatic losses. Our team of experts has examined everything to do with bitcoins, from trading software to how you store it, to allow you to take advantage of the colossal profits that are potentially on offer. There are a number of potential bitcoin trading websites, with IQ Option being an example of the very best bitcoin trading on the market.

What is Bitcoin?

  • Bitcoin is a digital currency, which is created and stored electronically.
  • It was the first ‘cryptocurrency’.
  • It is decentralized, so no government or organization controls it.
  • It functions by storing records on a digital ledger, known as a blockchain, these encryptions are almost impossible to change, making Bitcoins very secure.
  • They are completely unregulated.

Why is everyone so interested in them?

Price

  • When Bitcoin was launched in 2010, 1 bitcoin was worth $0.39
  • In December 2011 that had increased to $2
  • In December 2012 that had risen to $13
  • By December 2013 1 bitcoin was worth between $500-$800
  • This had fallen to between $400-500 in November 2015
  • This had risen to $1150 in January 2017
  • The price of 1 Bitcoin reached a remarkable $7300 in November 2017

Bitcoin Price
Graphic illustration of bitcoin’s price

Traders are interested in Bitcoin because of the incredible potential rewards: someone who had spent just $100 dollars on bitcoins in 2010, would now have a fortune of more than $75 million dollars.

Price fluctuation

  • The price of the Dollar, Sterling and the Euro, generally change by percentage points, which means that investors scope for profit is normally between 1-10%.
  • The price of Bitcoin moves by tens to hundreds of percentage points, each day, these dramatic shifts in price offer traders the chance to make huge profits.
  • Thus, Bitcoin is a high-risk, high-reward investment, lucky traders who invested in Bitcoins during the September price crash ($5000 to $2900) would have seen their investment grow to $7300 in just two months. Why not take a look at IQ Option, our recommended bitcoin trading platform.
  • However, it also offers the opportunity for huge losses, investors who bought in August at $5000, would have lost half their money in a single day when the price crashed to $2900 in September.

Bitcoin Price
Bitcoin price this year

Anonymity

  • One of the most appealing features of Bitcoin is that they are completely anonymous, nobody can see who owns them.
  • This is because, Bitcoin does not require the owner to link their address to their Bitcoin wallet.

Blockchain

  • The blockchain is effectively a digital ledger that records all bitcoin transactions.
  • It does this by spreading coded records over a large number of computers, which means that it is almost impossible to alter retrospectively.
  • This makes Bitcoins completely secure, which is another reason that traders are very excited by them.

Bitcoin facts

  • 1
  • There will never be more than 21,000,000 Bitcoins
  • 2
  • They have no inherent value; thus, their value fluctuates depending on how much people are willing to pay
  • 3
  • It is impossible to reverse a Bitcoin transaction
  • 4
  • There are no fees associated with Bitcoin transactions, making sending and receiving them free.
  • 5
  • You can see every Bitcoin transaction that has ever been made

bitcoin-vs-currency

  • 6
  • There are currently 16.5 million Bitcoins in circulation, so, there are 4.5 million more to come.
  • 7
  • Bitcoin is now a legal payment method in Japan.
  • 8
  • They were created by an anonymous internet user, using the alias Satoshi Nakamoto.
  • 9
  • He is now rumored to possess over $5 billion dollars’ worth of Bitcoins.
  • 10
  • Bitcoin has been more valuable than gold since

bitcopin-inventer

Bitcoin basics

How to get a bitcoin address

Getting a bitcoin address couldn’t be easier: you simply need to download the bitcoin customer or open an online wallet.

IQ Option is probably the most famous bitcoin trading site and we wholeheartedly recommend investigating all the incredible features that they offer.

Digital wallets.

Bitcoins are stored in digital wallets, which are essentially a secure series of codes and passwords, which are kept online.

If you lose your bitcoin wallet then they disappear forever.

For example, James Howell destroyed his hard drive, by accident, losing 7,500 bitcoins which amount to over $5 million dollars in the process!

So, we recommend making a copy of the details of your wallet, just in case!

digital-wallet

What Bitcoin Trader to use

The potential value of bitcoin, means that both serious and amateur traders should seek to take advantage of this amazing trading opportunity, having analyzed the potential websites and trading platforms, we are proud to recommend that our readers use IQ Option for all their bitcoin needs.

IQ Option

IQ Option, was founded in 2014 and has experienced remarkable growth ever since, with a membership base of 20 million that continues to expand. Based upon our research, we are confident that it is the best bitcoin trading platform on the market.

cyprus-security
Regulation

IQ Option is licensed and regulated by an impressive list of regulators, demonstrating an impressive commitment to honesty, allowing you to buy bitcoins, sell bitcoins and trade bitcoins with total confidence.

Cypress Securities and Exchange Committee (CySEC)

CySEC is renowned for being one of the best financial regulators in the World, meaning that the fact that IQ Option is regulated by them, allows you to trade bitcoins with total confidence that you are doing so safely.

Financial Conduct Authority (FCA)

FCA

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Free Test Account

Moreover, IQ Option offer you the opportunity to open a free trading account with them, allowing you to see for yourself just how potentially profitable it could be for you. The practice account operates in exactly the same way as a real account, with life market information, meaning that you will be able to see exactly how much you would have made or lost over the course of a day, week or even month: depending on how long you decide to practice, before starting to trade for real.
Security and Trust

IQ Option scored extremely highly in our analysis on the crucial question of security and trust, because:

  • It accepts payments from several reputable payment sites.
  • Its own site is well designed and easy to navigate.
  • Customer Service was easy to contact and helped us with our queries.
  • The analytic tools work well.
  • The technology is easy to use.
  • It has an informative and helpful blog.
  • It is well regulated.
  • It is transparent and honest

Blog

Another great feature of IQ Option, is the helpful and informative blog, which keeps you informed about a wide range of different subjects. This is a great place for novice traders to learn more about what they are trading and experienced traders to bounce ideas off their peers and the other experts on the site.
We were impressed by this feature of IQ Option’s website and it unquestionably raised their trust rating for us.

The Future of Bitcoin

The Masterluc Prediction

Masterluc is a Bitcoin trader and expert who predicted the current surge in bitcoin’s value, predicting the end of the first bitcoin bubble in 2013 and then the subsequent rise from $132 to $1000. This has made him a bit of a legend within the bitcoin community, with people taking notice whenever he speaks.

In August 2017, when the Bitcoin price was hovering around $2500 he predicted that bitcoins would be worth $15,000 by the end of 2017 (current value as of November is $7900, making it not beyond the realms of possibility). He proceeded to argue that the price would continue to rise in 2018 and 2019 reaching a high point of between $40,000 and $100,000 per coin.

If this is the case, then obviously it is the ideal time to enter the bitcoin market: investing now, before selling somewhere in late 2018, early 2019 dependent on how much risk you want to take.

If you agree with the Masterluc prediction, then you don’t have a second to lose: sign up with IQ Option, because the value of bitcoin is due to explode over the coming years, every second you wait is eating into your profits!

Graph-showing-Masterluc-Prediction

Traditional Wisdom

Goldman Sachs prediction

Other analysts and traders are slightly less bullish about, bitcoin’s prospects, envisaging a slightly slower growth, with company’s such as Goldman Sachs, predicting that bitcoin will consolidate around $8000, before rising further and peaking at $20,000 per coin.

This would again suggest that now was a great time to invest, the only difference being that traders should exit the market earlier that with the Masterluc Prediction.

This slightly more conservative appraisal of bitcoin, still suggests that there are vast sums to be made in the next couple of years, sign up with our preferred bitcoin partner IQ option today, before the price of bitcoin rises even further.

Goldman-Sachs-prediction

Graph showing the Goldman Sachs prediction

The Bitcoin replacing gold theory

One of the most optimistic bitcoin predictions comes from hedge fund manager Mark Yusko, who believes that Bitcoin could partially replace gold, as the principal financial instrument of trade within the economy.

This leads him to predict that Bitcoin may reach $500,000 dollars a coin within two decades, a staggering number, by anyone’s standards. For this to become a reality, bitcoin will need to move from being used by people, to being used by institutions and governments.

Anybody who considers, Mark Yusko’s predictions as remotely likely, should invest in bitcoin immediately: we are proud to recommend IQ Option to our readers, which we believe is by far and away the best cryptocurrency trading platform.

Mark-Yusko

Mark Yusko, who believes bitcoin will hit $500,000

Bitcoin, the risks

The Bubble Factor

Almost all the risks surrounding trading bitcoins, come back to whether you believe bitcoin is a bubble or not. The theory is that nobody actually uses bitcoins for anything other than making money: the only reason that any of us trade in bitcoins or buy bitcoins, is to make money. Thus, it is a classic bubble waiting to burst: I buy bitcoins, because I think there is another trader out there who is stupider than me, meaning that I can sell them to him at a profit. However eventually this stream of ‘fools’ will run out and people will lose confidence in Bitcoin: the bubble bursts, the value of the commodity collapses and anyone who owns bitcoins at that point will lose a lot of money.

bitcoin-bubble

Governmental regulations

Another fear is that changes in legislation, could catastrophically damage bitcoin. These fears essentially arise from two sources separate sources:

China

The vast majority of bitcoins are bought and sold in China, which means that changes to the law surrounding bitcoins, has the potential to really alter the value of bitcoins. If the Chinese government were to crackdown on bitcoins or make them illegal, it could precipitate a large drop in value, as Chinese owners of bitcoins attempt to sell them quickly.

bitcoin-bubble

America

Bitcoin’s anonymity means that they are ideal for people doing illegal things, American law enforcement has often threatened crackdowns on such activity, which could again damage the value of bitcoin.

Market Risk

Bitcoin’s price fluctuates wildly, thus it is crucial that you only ever invest an amount of money that you can afford to lose. If you buy $1000 dollars’ worth of bitcoin then you have to be able to hold onto it, otherwise you run the risk of the price having fluctuated downwards when you are looking to sell them.

Bitcoin sites we recommend looking at, for further information

There is a wealth of additional information out there, to help you understand how to trade bitcoins better, here is a selection of websites, which will help you to better understand how to buy bitcoins, sell bitcoins and trade bitcoins.

  • Bitcoincharts – Is one of the most famous of all the bitcoin websites in the world, offering detailed financial information
  • Bitcointalk.org – Is a great place to speak to other bitcoin traders and gain new ideas and insights into bitcoins.
  • Weusecoins.com – The perfect guide for any beginner with plenty of useful articles and tips, to help you invest in bitcoins
  • The Bitcoin Wiki – A wonderful website, crammed full of useful information regarding bitcoins and how to trade them successfully.
  • Bitcoinity.org – A great place to track the price of bitcoins in real time, along with plenty of helpful analytics.
  • CoinDesk.com – The best place to get the latest news and analysis on bitcoin, a crucial tool for any successful trader.
Bit Coin