Continuous changes in prices allow investors to make a profit by trading in Bitcoins, either in an analytical and formularized short-term pattern or as a long-term stake.
photo credit: David McBee / Pexels
There’s always been a lingering debate about the actual identification of Bitcoin, whether it should be looked upon as a commodity or a currency. Because there’s been an equal number of supporters on both sides of the debate, a large portion of the community have come to an opinion that Bitcoin should be considered both as a commodity as well as currency.
No matter what definition gets attached to Bitcoin, its continually changing value offers the investors an opportunity to trade in it and make a profit out of it, either through long-term investment or through a short-term analytical pattern. For more information visit bitpal app.
The bitcoin market has two preeminent kinds of traders- “long term traders” and “short term traders”. These groups are classified based on how long they hold onto their bitcoins for trading and making a profit out of it.
The long term traders tend to study the price trends for an extended period. This helps them in making decisions about buying or holding Bitcoin over a certain period in an ambition of making a profit by selling them at a higher price than the buying price. Because bitcoin is considered to be in the developmental stage still, many users suggest that this is the best time to buy.
Au contraire, the short-term traders evaluate and interpret in the intra-day behavior of the prices and look to take advantage of the fluctuations in prices. Short-term traders rely highly on market volatility, which is a prominent characteristic of Bitcoin.
Rules of Trading in Bitcoin
If you’re playing your cards right, trading in bitcoin can prove to be profitable for you. A lot depends on the market movement pattern. Because the value of Bitcoin rises and falls very dramatically in intra-day, it can be a hazardous phenomenon if you misjudge the movement.
There are some critical things that you need to consider before you decide to cash out your bitcoins-
- Number of Bitcoins that you want to sell.
- The way you’d want to get your fiat money.
- Whether you want to receive the money in your bank account, or credit card, or PayPal account or in physical cash
- The country that you belong to
Here are some beneficial tips for the beginners who want to make a profit from trading in the Bitcoin market:
- Never keep all your capital invested at the same price level. Have it distributed in small lots for different positions at different prices.
- Because the bitcoin market is highly uncertain, it would be foolish to invest your life savings or the money that, if lost, would change your life drastically.
- Earn profit as possible with utmost the use of advanced technology.
- It’s a constant process to learn how the market works. It is very time-consuming and requires a lot of efforts and concentration. You must do your researches and keep yourself up-to-date with all the new trends.
- Always stay unemotional, professional and focused. Understand when the right time to cash in is.
- Accept as a trader that losing is equally essential as winning. It’s only the accruing profits that count.
photo credit: Andrey Danilovich / Flickr
You can also loan money with your bitcoin as a monetary deposit.
In case you’re in an emergency, and you need money but also don’t wish to sell your precious bitcoins, you may opt to get a loan with your Bitcoin at reasonably low-interest rates.
More and more companies are emerging as a platform where you can take out the loans without selling your bitcoins. You need to use your cryptocurrency holdings and bitcoins as collateral.
Essentially, you’re just loaning money from your bank.
Here’s How it Works
- You send your bitcoin into a smart agreement, and it is held there.
- Then you get your fiat currency in your bank account.
- You then pay back the loan at your convenience.
- After the pay-off, you get your bitcoins back.
So, you can essentially get real-money without even selling your bitcoin. Not only this, you don’t even have to pay any tax on the money that you get from this loan.
In case bitcoin prices go up within the next year, which is very much the possibility, you won’t be missing out on your profit because you’re still the owner of your Bitcoin.