Let’s get one thing straight right away – getting rich overnight when trading Bitcoin is not possible anymore.
It was possible a couple of years ago when Bitcoin wasn’t big yet.
But even then, those who managed to get rich invested a lot of time and energy into research and made money by making the right decision.
Only the minority were lucky enough to buy Bitcoin out of curiosity and forget about it only to get a pleasant surprise in December 2017 when the cryptocurrency reached its peak value.
But there’s a catch. Although overnight wealth is not possible, Bitcoin certainly does provide you with more chances to get rich quicker compared to many other investment opportunities. How so?
Bitcoin is still highly volatile
Volatility has always been the key aspect of not only Bitcoin but many other cryptocurrencies.
A volatile currency is not a stable one, meaning its price changes often.
In case of Bitcoin – perhaps too often (we’re not talking days – we’re talking hours or even minutes and seconds).
The reason why BTC is so volatile is not a subject of this article, but make sure to check this Investopedia text here for more info.
Experienced traders know how to get ahead of this phenomenon and use it to gain an advantage when trading.
At this point, there’s only one rule that you need to follow in order to profit, and that is – buy when low and sell when high.
In other words, you need to study crypto price changes and act when the time is right.
The time is usually right when the Bitcoin price hits the floor. Buying at the moment when the price is just about to go up again is perfect.
On the other hand, you need to sell your cryptos when the price hits the ceiling and you feel that it will not go up anymore (meaning that it will start going down pretty soon).
That’s the only catch that you need to know when trading cryptocurrencies, and Bitcoin in particular.
However, in order to do that, you need to pay attention to several things. Read on!
Choosing the right cryptocurrency exchange
In order to trade Bitcoin successfully, you need to find a cryptocurrency exchange that is legal, fully-functional, available in your country, accepting fiat currencies, and many other things.
This is not an easy task, meaning that you need to find the one that is not only great but also meets your needs in every aspect.
If you are new to crypto trading, you should definitely start with CEX.IO, which is an online crypto exchange suitable for complete beginners.
It also comes with a set of more sophisticated trading tools that you can use once you learn more about BTC trading.
Apart from Bitcoin, it also offers several other popular cryptos.
However, choosing a great exchange is just the first step.
Trading BTC may seem easy on the surface, but it is actually much more complicated than that once you get familiar with all the available trading options.
If we stick to the “buy when low – sell when high” system, we need to somehow anticipate what affects the price of BTC!
What affects Bitcoin’s price?
One of the main reasons why BTC was so popular, to begin with, is that it has limited supply.
Unlike fiat currency, which can be printed out if there’s not enough of them, there’s a finite number of Bitcoins in circulation, so the simple supply and demand rule definitely plays a very important role here.
Therefore, you need to monitor the overall popularity, supply, and demand for BTC.
The second important thing that affects the price is other cryptocurrencies. Although Bitcoin is still the most popular one, there are other cryptos that can affect its price.
Therefore, you need to monitor other popular cryptos and watch for any sudden changes in their prices as well.
The number of cryptocurrency exchanges that allow BTC trades is also important and affect the overall price of “digital gold.”
Another vital thing to pay attention to is the legal approach to BTC and how it is regulated in various countries, including yours.
Bitcoin price can change when a country decides to change its legal attitude towards it or brings new regulations that affect this cryptocurrency (or any other crypto for that matter).
Finally, one of the most essential aspects that can affect the price is news and overall hype, which usually go hand-in-hand with each other.
Simply put, when people create hype about something, it is usually followed by news creating even bigger hype about that and vice versa.
This is present nowadays more than ever, thanks to social media where news travels with the speed of lighting.
Whenever hype is created, it would make an impact on the price and it can be either positive or negative.
News can affect the price of Bitcoin on their own. One of the most popular examples is that Bitcoin changed its price after the Brexit referendum results were announced.
Simply put, BTC and other cryptocurrencies have become an integral part of the world’s economy, and it can be affected by things that usually affect fiat currencies or the overall stability of a country or region.
Conclusion: So, where’s the catch?
The catch is to know when to buy and when to sell. That is the magic formula from which numerous other equations are derived for trading BTC.
Once you accept that, you need to start looking at the broader picture and include all the factors that influence the price and drive the market.
Although the element of luck is still very much present in crypto trading, you can improve your chances of getting rich by learning about this activity, studying the industry, following the news, and more.
In other words, you need to immerse yourself in the world of cryptocurrencies and stay updated about the latest changes in it.