The cryptocurrency market has been rising in both popularity and adaptability ever since the Bitcoin craze hit in late 2017. In just a few short months, the cryptocurrencies in the market today are over 1,600. Cryptocurrency brokers have been increasing over the same period mainly to afford the crypto investors an opportunity to exchange their crypto coins for other coins or for Fiat money such as USD and EURO.
The crypto market is so active and fluid that it has become the perfect destination for speculative investors. On top of that, the number of cryptocurrency exchanges is increasing hence bringing in new trading opportunities for everyone from around the world. This also means that the number of Bitcoin trading brokers is on the rise.
If you wish to enter the crypto trading business, you will need to have a basic understanding of what cryptocurrency is all about and the benefits that you stand to gain once you enter. At the same time, you need to understand the reason why you should go with a certain broker and not the other. First, let us preview what cryptocurrency is all about.
Why consider Bitcoin trading?
Bitcoin is a digital currency which was launched 9 years ago by an anonymous person or persons. Bitcoin and other cryptos use a distributed public ledger called blockchain and which is not controlled from a central place like fiat currency. The Bitcoin network participants who verify Bitcoin transactions are called the miners.
Bitcoin’s popularity has risen because it allows a no-fee payment system. The crypto can be exchanged for the traditional fiat currency and its transactions are anonymous and safe. The anonymity of crypto transactions means that governments are not able to trace your online activities. The popularity of bitcoin has been such that in countries where national fiat currencies are a bit unstable such as Zimbabwe and Venezuela, it has become a more widely accepted form of currency.
The benefits that Bitcoin comes with are also countered with some disadvantages. Governments around the world have been very tenacious in 2018 with regard to introducing new crypto regulations. In addition to this, Bitcoin transactions are not as fast as those associated with fiat currency. And this is not to forget that Bitcoin is regarded as extremely volatile because one day it could be going for $500 and in a few hours, it shoots to $10,000.
Get a better understanding of cryptocurrency trading
The volatility of Bitcoin and alt-coins makes the crypto market very risky but at the same time, it presents traders with great profit opportunities. In 2017 for example, Bitcoin price started off at a low price of around $900 but touched a high of $20,000 in December. The price then dropped to $6,000 in Feb this year which means that if you had bought BTC in December 2017, you stood to lose $14,000 if you sold in February. The same case goes for a huge majority of cryptocurrencies.
In order to participate in the very hyper cryptocurrency market, you will need to either buy the BTCs through a broker or a crypto exchange. BTC brokers also offer CFD trading which means that you don’t necessarily have to be the owner of Bitcoin. Rather, you will be trading/ predicting on whether the price of BTC will rise or fall. In order to enjoy the full benefits that come with BTC trading, you will need to find the proper broker. It is worth noting that a BTC trading broker can make you have a successful cryptocurrency trading career or not.
Factors to look out for when shopping for a Bitcoin broker
Reliability
A broker, especially one who deals in cryptocurrency must have a reliable trading platform. The broker should be able to offer you reliable and credible trading methods and strategies of trading. The trader should rest easy knowing that the broker’s platform will not hang or fail to respond especially when they need such a platform the most.
The fee structure should be transparent
Every broker is in the market to offer trading services but more importantly, they want to have a piece of the pie. Some Bitcoin trading brokers result in fabricating their platforms while others refuse to display all the charges and fees applicable for doing business using their platform. You should read customer reviews and also ask the broker whether all the charges have been displayed or indicated.
Compatibility
Does the broker’s platform work well with your type of phone? There are some trading platforms which are designed to only work with specific type of phones or those with particular specs. Mobility is another thing that every trader should consider today. You should be able to access your account anytime and from anywhere. A good Bitcoin broker should empower their customers with mobility and this can only be achieved by having a platform or trading app which is compatible with a majority of smartphones and PCs.
Smooth trading experience
Receiving and sending BTCs often depends on the efficiency of third-party wallet services. Most of these wallets are smooth and friendly. It is important that while you are picking a Bitcoin wallet that you check if it is a scam as this may end up siphoning all your funds from your account. On the smoothness of the broker’s platform, look for that broker whose platform affords you a streamlined user-experience all the time. A good number of brokers have cumbersome interfaces which can make your trading experience hectic and frustrating.
Setting up your account should be easy and fast
With the popularity of cryptocurrency, hundreds if not thousands of new clients are signing up with brokers. A broker that has a good platform that is responsive will definitely pull more new customers. The setting up of an account should take a few moments and should be straightforward both for experienced speculators and for a beginner. Ideally, look for a broker that can help you set up an account fast which will then enable you to start trading with minimal downtime. The other thing that a broker’s platform should have is the ability to help the traders make accurate and timely decisions.
A broker that is customer-focused
A good broker should help you leverage the wisdom of popular traders in the market. Such crowd wisdom can help a beginner trader not only learn a few industry tricks but also start a long and fulfilling crypto trading career. Many brokers will let you take a peek at the hottest trading trends of the more successful and experienced traders. With such wisdom, it becomes easy for you to create or pick your own successful trading strategies and methods.
The reputation of the broker
Before you decide to sign up with a Bitcoin trading broker, check what other people are saying about them. It is very easy nowadays to know the reputation of a broker because of the internet. Traders will want to air their experience with their brokers. Even though some reviews are not to be believed especially those posted on the website of the broker, it is good to read widely so as to come up with a more balanced judgment.
Licensing and regulation
Putting your money, whether virtual or fiat, into a broker that is unregulated and unlicensed is like throwing your money by the roadside and hoping to find it the following day. Many trading brokers today that deal with FX and CFDs are also accepting cryptocurrencies. Many of these brokers are licensed by well-known regulatory bodies such as CySEC of Cyprus or MGA of Malta. You should be wary of brokers that hold licenses from tax haven islands where shell companies thrive. A genuine broker will be very proud to display their license details on their website.
Funding, depositing and withdrawing of funds
The reputation of a broker will also be attached to the funding procedures they follow. The funding process should be easy to understand and follow. In addition to this, a broker should avail to you the various types of accounts they have so that you can pick the one that suits your needs. The minimum initial deposit should also be a factor to consider as well as the least amount you can withdraw and the intervals of doing so.
Bonuses offered and demo accounts
Bitcoin brokers will offer you welcoming bonuses and in other cases, they will offer you bonuses for depositing certain amounts. Brokers also offer traders free bets to help them increase their success chances. You should, however, read the terms and conditions relating to bonuses offered to avoid entering into a trap. Some brokers will only allow you to withdraw what you have won only if you have traded with the bonus amount a certain number of times.
In addition to bonuses, check out whether a broker has a demo account which you can use to hone your trading skills. A demo account should not necessarily come attached with a demand to deposit some funds into your account. But still, a good number of brokers will ask you to make an initial deposit before they can allow you to practice with their demo account.