After seeing gains of over 400% over the past year, Bitcoin currency has passed over $50,000 mark. It’s an incredible story for a coin that just four years ago was trading below $1,000.
Recently the coin was named the best performing asset of the past decade, and there is no doubt it can be the best performer in the coming decade. Since 2013, Bitcoin has registered an ROI of over 72245%. That is an incredible number, and there isn’t any other asset class that comes close.
As crazy as these numbers seem, it’s only the beginning for Bitcoin and other crypto-assets. The onset of Covid-19 and inflation within various economies have conspired to show people why crypto-assets can offer better value and security on their wealth. Many people are looking to enter the Bitcoin market to ensure they don’t miss out on the opportunities it offers.
There are many ways to make money using Bitcoin. You can buy and hold for the long term waiting for the price to rise and sell for profit. Or you can interact with financial instruments linked to BTC on platforms such as PrimeXBT and profit whenever the price rises or falls.
The latter compared to the former is easier since you don’t have to own the actual asset and can profit many times within a short period. If you decide to go with this option, then the first question you need to ask yourself is how to trade Bitcoin with PrimeXBT? Understanding how to go about the platform is crucial if you are to make the most of the opportunity.
Mitigating Risks
Whichever way you opt to enter the Bitcoin market, you need to understand a few things that will help you mitigate risks that come with interacting with Bitcoin.
For example, if you opt to own the actual asset by joining an exchange that allows you to buy/sell the asset, then you need to protect yourself from counterparty risk. Most exchanges that allow users to buy Bitcoin are centralized and typically hold private keys for the user. This means the owner of the coins doesn’t have control over them. In case the platform is breached like it has been the case so many times since the crypto market came around, you will lose your coins. Ideally, once you buy your Bitcoin, you should send it to a private wallet that allows you to hold your private keys, which means you are in control of your tokens.
Also, you need to understand that Bitcoin transactions are irreversible. Therefore when sending coins from one platform to another, you have to be extra careful.
Tips to Follow
When it comes to trading the actual asset, remember not to leave your coins on the exchange if you are not actively trading. Trade with only 20-30% of your portfolio. Diversify your coins in several exchanges and do your due diligence on the platform you opt to use.
As mentioned before, some platforms will allow you to trade Bitcoin without owning the actual asset. They have many perks, including not having to find a crypto wallet to store your coins. Also, the ability to profit from the positive and negative price movement of the actual asset. This is possible by trading CFDs attached to Bitcoin, and all you need is to signup on the platform, fund it, and you are good to go. One such platform is PrimeXBT. Here the trader can use inbuilt tools to increase their exposure within a given market. But you need to avoid being too greedy since the greater the margin you choose, the higher the risk of getting liquidated due to small price movements that wipe your principle in no time.
The best thing you can do in such platforms is going for healthy margins, which give you breathing space and time to get out of a bad trade. If utilized well, platforms offering crypto derivatives offer opportunities to profit greatly and more often than buying the actual asset and holding it for a period as you wait for the price to rise to cash out.
Another super tip is avoiding hype. And there is plenty of it within the crypto market. Avoid FOMO and FUD and base your investments on solid facts.
Featured image credit: Photo by Karolina Grabowska from Pexels
