Bitcoin trading is trendy. More and more platforms for trading cryptocurrencies are competing for private investors. We explain how to find a Bitcoin trading platform that suits you.
There are more than 8,000 cryptocurrencies worldwide. These have a total market capitalization of more than 1.5 trillion US dollars (around 1.27 trillion euros, as of mid-August 2021). The largest part is accounted for by the oldest cryptocurrency: Bitcoin. Only twelve years old, the cryptocurrency has already written an impressive success story. No wonder that more and more private investors want to get into Bitcoin trading. But where there are high price gains, price losses are not far away. In fact, Bitcoin has had an eventful year. After the price was just under 10,000 euros at the end of 2020, it quintupled in the following months before falling again to 24,616 euros by the middle of the year. A Bitcoin currently costs around 39,500 euros (August 12).
Even so, Bitcoin is a good introduction to the world of crypto trading. Because of its large market volume, it is liquid and more stable compared to some other cryptocurrencies. To trade bitcoins, you need a clear, secure trading platform. The fact that security plays a major role in crypto trading was shown not least by the spectacular hacking attack on the systems of the Poly Network company in August, in which criminals apparently cryptocurrencies worth up to 600 million US dollars (510 million euros). have stolen. In the following, you will find out where you can buy and sell Bitcoin - and what alternatives there are to direct Bitcoin trading.
What distinguishes a suitable trading platform?
How do you, as a user, know whether a platform is serious and suitable for beginners? The following points are decisive when deciding on a provider:
- Free demo account: Good trading platforms allow you to test the platform and functions in advance without risk with "play money". This may be irrelevant for experienced traders, but this option makes sense for beginners.
- Security: Bitcoin is a lure for cybercriminals. Security, for example against hacker attacks, is, therefore, a particular focus of trading platforms. SSL encryption and two-factor authentication (2FA) are the minima.
- Fees: Check exactly when and which fees are incurred for trading on a platform. Typically, these are collected as a percentage. There are also some differences in the method of payment.
- Minimum budget: Even small investors with a small budget can trade in cryptocurrencies. However, some exchanges have set a minimum amount as an entry barrier.
- Payment methods: You can rarely pay for your Bitcoin trades with a credit card. You cannot buy Bitcoin in Germany with PayPal either. Therefore, make sure that your trading platform offers a payment method that suits you.
- Available cryptocurrencies: Bitcoin can be traded on every crypto platform, but not all of them offer a wide range of other coins. Even if that may not be so interesting at the start of trading, you should think from the start about which cryptocurrencies could be of interest to you in the future and whether you can also trade them on the platform of your choice.
- Regulation: Basically, the idea of cryptocurrencies was or is that they can get by without the (regulatory) control and distribution by and by banks. That is why Bitcoin exchanges are usually not regulated. However, this is also a factor of uncertainty in the event of irregularities. eToro is the only trading platform that is monitored by several financial regulators within the EU, which is why it is particularly recommended for beginners. With all other platforms, you should create an external wallet to secure your Bitcoins there after buying.
- Ease of use: The usability of the platform is less a quality feature and more a question of convenience: The best platforms for Bitcoin trading can not only be used on the desktop but also conveniently via the app.
Which trading platforms are there?
- eToro
- Binance
- Bitpanda
- Coinbase
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