As the Bitcoin market continues to attract more traders, it is crucial to learn the key differences of trading versus owning Bitcoin.
Here are some of the key differences:
Perhaps the most significant difference between trading Bitcoin and purchasing it is that when trading you can be either long or short at any given time depending on your outlook. If you buy Bitcoin outright, you obviously can only be long, and will usually just be compelled to hold through all the volatile ups and downs in Bitcoin’s price.
Traders will attempt to take advantage of all the potential opportunities of Bitcoin’s volatility.
Bitcoin analysts are divided as to whether the cryptocurrency will continue to shoot up in value or if it will drop sharply instead. As a Bitcoin trader, you can nimbly position yourself in either direction or take directional trading opportunities as they arise.
Relatedly, when you trade Bitcoin, you can trade the price swings on a short-term basis instead of purchasing Bitcoin at a certain price and holding long-term, hoping for further price appreciation.
Margin and leverage are another way trading Bitcoin can be more flexible than buying it outright. Depending on the price of each Bitcoin at any given time, owning just one Bitcoin could be prohibitively expensive. Trading Bitcoin with leverage allows you to take a position with less capital but remember, increased leverage increases your risk.
Finally, trading Bitcoin actively allows the use of entry orders, stop losses, profit-limit orders, and risk management techniques that are just not possible when simply purchasing Bitcoins.
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Send us an email. We will get back to you with answers that can cover your questions 100%.
HIGH RISK INVESTMENT WARNING: Before trading, you are strongly advised to read and ensure that you understand the relevant risk disclosures and warnings. There is a substantial risk that you may lose all of your initial investment. We advise you to consider whether trading leveraged products is appropriate for you in light of your own personal circumstances. We recommend that you ensure you fully understand all risks involved before trading. Trading through an online platform carries additional risks.
Restricted Jurisdictions: We do not establish accounts to residents of certain jurisdictions including Japan, Canada and the USA. For further details please see Terms & Conditions.
TRADELAB (PTY) LTD Relgulated with Registration license FSP 52058
Dial up our number and give us a call. We speak multiple languages, we probably speak yours, too.
Send us an email. We will get back to you with answers that can cover your questions 100%.
HIGH RISK INVESTMENT WARNING: Trading CFDs is highly speculative, involves significant risk of loss and is not suitable for all investors. Before trading, you are strongly advised to read and ensure that you understand the relevant risk disclosures and warnings. There is a substantial risk that you may lose all of your initial investment. We advise you to consider whether trading leveraged products is appropriate for you in light of your own personal circumstances. We recommend that you ensure you fully understand all risks involved before trading. Trading through an online platform carries additional risks.
Restricted Jurisdictions: We do not establish accounts to residents of certain jurisdictions including Japan, Canada and the USA. For further details please see Terms & Conditions.
TRADELAB (PTY) LTD Relgulated with Registration license FSP 52058