How do you trade in Bitcoin or cryptocurrencies? How do you make safe transactions online or even face to face when dealing or trading with Bitcoin assets? There is a lot of confusion surrounding these questions. The common man has several doubts in his mind regarding the buying and selling of any kind of cryptocurrency.
Let’s face it, the entire concept of cryptocurrencies is a little difficult to understand in the first place. People who have already understood it well enough, want to know how to trade in them to make a profit.
The following section intends to clarify a few concepts and processes that are involved in Bitcoin trading. As a beginner, it is your prerogative to understand them better before you initiate any transactions in cryptocurrencies.
1. Face-To-Face Bitcoin Transactions
Let’s say that you have invested in Bitcoin or any other form of cryptocurrency. You want to sell your investment to another person. A very practical way is to arrange for a transaction/exchange in person. Several Bitcoin investors connect with buyers and sellers without any arbitrators in between. The transaction takes place in person in exchange for cash. For this process to work, you will first have to understand the functioning of a Bitcoin escrow service.
- The seller sends the bitcoins to the escrow service
- The buyer verifies that the bitcoins have been added to the account
- Then the buyer hands over the cash to the seller
- The seller signs off on the escrow
- The buyer gets his bitcoins
You may also use free online platforms to identify the latest price of your Bitcoin to make the exchange faster. Selling or buying it in person is just like conducting any other financial transaction. Assess the value of your Bitcoin asset before you initiate this trade.
2. What Are Bitcoin ATMs?
Contrary to what the name might suggest, Bitcoin ATMs are a facility and not exactly a traditional ATM. These help the users connect to the internet and enable Bitcoin transactions on the spot. Any user can scan their crypto wallet QR code at their nearest Canada bitcoin ATM to sell their Bitcoin asset for cash.
Many of these machines offer both functionalities; purchase, and sale of your cryptocurrency. Some countries may need the ATM to apply for a money transmitter license. Several other nations are still in the process of installing Bitcoin ATMs for easy accessibility.
These machines may also require the user to provide them with their telephone number and government-issued ID. At times a bitcoin ATM provider may ask a user to create an account before they can begin selling or buying their crypto assets. The registration process is very comprehensive and may require a palm scan and submission of a current photo of the user.
3. Verifying Your Bitcoin Purchase
Any user may choose to buy cryptocurrency from an exchange service as well. If you want to buy Bitcoin with your national currency, you are expected to provide your complete identity documents and proof of residence as well.
There are certain guidelines in place that make it necessary for the cryptocurrency provider as well as the exchange platform to keep a record of their customers. It also commands them to take certain measures to prevent any money laundering activities. You have to complete these formalities and procedures to purchase and sell Bitcoin without any hassle.
4. Trading On The Official Website
You may also use your debit card/credit card or any other payment option to trade in Bitcoin on its official website. Payment platforms such as Google Pay, Apple Pay, and Samsung Pay are also allowed on this website.
The process goes as follows:
- Visit the buy Bitcoin page on the official website
- Select Bitcoin, BTC
- The next step is to choose the currency you want to make the payment in Now enter the currency amount
- Click on the buy button
- You will be then prompted to enter your unique wallet address
- You may choose to send the Bitcoin asset to this address
You will be prompted to create an account and provide your payment details. The purchase process is complete.
Note: To know your Bitcoin address, you will have to open the Bitcoin app and tap on the “receive” icon. Select Bitcoin and choose the Bitcoin wallet of your choice. Copy the address to your clipboard and then paste it in the cell on the website.
5. What Are Cryptocurrency Accounts?
Is it necessary to create a cryptocurrency account to buy or sell Bitcoin or any cryptocurrency? Creating a cryptocurrency account is a safe way to trade in Bitcoin and any other crypto assets.
You can easily find several platforms to trade your Bitcoin assets online. Signing up for any such Bitcoin buying and selling platforms is as easy as creating an account on Amazon.
Creating a cryptocurrency account gives you an extra layer of protection and safeguards all your transactions with your details.
6. Bitcoin And Its Price Movements
There are a few factors that affect the price of your Bitcoin asset such as:
- Market Supply
The simple rule of demand and supply applies here as well. A limited supply of Bitcoin is going to increase its price and vice versa.
- Bad Publicity
There are several posts and news feeds that determine the price of your Bitcoin asset as well. Some claims and developments come to the fore every day with regards to the value, security, and longevity of Bitcoin. These factors affect the price of your crypto asset significantly.
- Level Of Integration
Bitcoin, despite its popularity, hasn’t been integrated into any of the mainstream payment systems and banking frameworks on a large scale. Though the demand is rising, there is still a lot of scope for this currency to go mainstream in the future. Wider integration means more demand which translates into a higher price for your Bitcoin asset.
- Other Factors
There are several other factors at play here such as changes in rules and regulations, security breaches, macroeconomic policies, and related government decisions. All of these factors directly impact the price of Bitcoin and other cryptocurrencies in the market.
Conclusion
The value of your cryptocurrency or Bitcoin is going to fluctuate constantly. It is important to know its current price before you start trading in it.
Understand how the entire transaction is going to pan out before you start buying or selling Bitcoin.