In this guide, we show you how to get into bitcoin trading by providing information on latest market developments. We investigate platforms that offer trading services, tools, instruments & softwares available, as well as supported regions. Lastly, we provide a brief guide on how to short BTC as well as regulations regarding its trading. We also have guides for other cryptocurrencies, such as Ethereum trading, NEO trading and Ripple trading among others.
Available Trading Tools
This section concerns available tools used for BTC trading, them being API, price & volume charts, bots, and apps. We also have a complete article about crypto trading tools.
Concerning API, bitcoin enjoys the most support about of all cryptocurrencies in the market. The most famous examples of external APIs are Crypto World Evolution (CWE), Gekko, and Haasbot.
Crypto World Evolution (CWE) takes control over your money and the flow of funds in different trading platforms. Apart from money transfer, it also provides numerous small trading bots that can do the trading instead of you. They take into account market trends and post short or long positions depending on results it got from blockchain’s data.
Gekko shows strength as an open source platform, where you can create your own API using the company’s base. Thus, instead of using the API through the browser, you download it and run it manually. It extracts data from exchanges, creates its own database, and makes moves based on results.
Haasbot is probably one of the most famous API platforms currently in the market. The Haas provider offers large choice in its API and bot products. As an example, for bitcoin trading, you can use APIs like StochRSI, MACD-Histogram, PPO, and Ultimate Oscillator.
As for the charts and chart apps, the ones that should be interesting for you are CoinMarketCap, Bitcoincharts, and Cryptowatch.
CoinMarketCap is probably the most used platform when it comes to information regarding different currencies, BTC included. It updates its charts on daily basis, providing data regarding bitcoin trading volume, market caps, the value of the coin, etc.
Bitcoincharts and Cryptowatch are similar but go additional step from CoinMarketCap. These two platforms offer chart apps that you can use and design according to your needs. They provide indicators and you choose how you want the chart to look like and what to track. You can see Bitocinchart’s app in a picture below to get the idea.
On the side of mobile and regular apps, you have Blockfolio and Bitcoin Price Watch.
Blockfolio comes as a mobile platform that you can download on your iOS or Android device. Moreover, it works with a large number of cryptos, bitcoin included. It uses data from different exchanges and creates market trends for you to analyze.
Bitcoin Price Watch is a mobile app that provides simple analysis tools and charts for traders to use. You get to choose which platform you want to follow and how price/volume charts should be organized.
Now that you have got the basics of tools, next in line are softwares that can be very handy when trading bitcoins.
Haasonline is a trading software platform that offers several plans at your disposal. What we wrote before about Haasbot, it is only for a part of the platform. In truth, the entire software has the management of your balances, strategies, databases, bots, and APIs. There are three plans to choose from, Simple, Beginner and Advanced plans.
Cryptotrader operates as a cloud-based bot platform. Traders from around the world can purchase plans and use different tools necessary for their strategies. Overall, there are 5 plans from which investors can choose, each having its own set of tools and price tags. These are Basic, Regular, Pro, VIP, and Premium differentiated in terms of services and equity limit and support.
Binance serves as a crypto-to-crypto platform, though its margin trading capabilities are not as complex as Bitfinex’s. Nevertheless, it has a large number of digital coins, while bitcoin has the biggest supply in terms of volume. It offers regular limit, market and stop-limit functions, price/volume charts, and indicators. To know more about it, visit our in-depth Binance review through this.
Bitfinex is considered a heavyweight player in the cryptocurrency arena, what with its $1.8 billion worth of daily BTC/USD trade. There are numerous functions available for traders to use, including exchange and margin trading as seen in the picture below this text. You also have leverage available, as well as lending/funding markets. To know more about the platform, visit our Bitfinex review.
BitMEX is somewhat a mixture between Binance and Bitfinex. It supports cryptos only but it retains the complexity of the market that Bitfinex has. You have numerous functions available, leveraging included as well. Bitcoin is the largest pair of all in this platform, offering futures and swaps. You can find out more in our BitMEX review.
eToro does not offer margin trading as previously-mentioned platforms but something else entirely. It is a social trading network from which you can copy leaders in the industry regarding the crypto trade. Bitcoin trading is thus powered up by successful investors helping beginners. To know more, simply check out our eToro review to our in-depth analysis of the platform. eToro is a famous platform for social trading and we have an article about crypto social trading.
When it comes to trading, instruments such as futures and swap contracts play a vital role. They serve as a mean to make a profit from fluctuations in the market.
Bitcoin futures are most dominantly found in margin trading platforms, such as Bitfinex and BitMex. These contracts allow you to purchase the coin at an agreed-on price sometime in the future. Both platforms offer highly customizable charts and indicators that would help traders decipher the future and make good calls.
Swaps allow traders to exchange two cryptos (or any other asset) according to the values that both assets hold. Crypto-to-crypto platforms like Binance and Bittrex use this as well as Bitfinex, where you can exchange altcoins with BTC. Check out our article Crypto Trading Instruments for further reading.
Trading Regions & Regulations
Bitcoin Trading US
Since 2013, bitcoin and all other virtual currencies are classified as online commodities. The policy was brought by the Commodity Futures Trading Commission (CFTC) as an attempt to control the market. Unlike fiats, BTC is not seen as legal tender. You pay taxes only if the said currency involves itself with fiat money, like USD or EUR. It is worthy to note that, although the general course is same, each State has its own trading license to consider.
Bitcoin Trading Canada
Canada applies many similar regulations for cryptos like the USA as you are subject to income and capital gain taxes. Moreover, in February 2018, the Bank of Montreal (BMO) banned its users from using credit cards for trading digital coins. It is expected for more specific regulation policy to take place this year as well.
Although the country itself did not ban it, Central Bank of India did prohibit its banks to conduct activities that are even remotely connected with cryptos. This means that payment methods such as credit cards and bank transfers would be unusable when funding your account. Crypto-to-crypto is still not prohibited though it does a lower spectrum of choice when it comes to bitcoin trade.
Now, we will show you how to short bitcoin using several exchanges as an example. We go over four major strategies of shorting bitcoin:
- Margin trading
- Futures/Swaps Market
- Binary Options (call and put)
- Prediction Markets
For margin shorting, we propose using Bitfinex as a trading platform. Head over to “Trading” tab and choose your pair of choice. Before ordering, you should check out chart results and pair it up with softwares and tools mentioned in previous sections. Now, choose functions & price limits, clicking Margin Sell or Buy once your order form is ready, as seen below.
Futures and swaps markets are available at BitMEX, where verification and fiats are not needed for trade to take place. It is important to note that using leverage function, you stand to gain but also lose a lot more than if you use your balance only. Simply fill out the trade form on the left and click “Short/Sell” button to start the process, as seen in the picture below.
Other two strategies can be used in a number of trading platforms, as these are merely trading strategies. With binary options, you make a call and then put on the same day, betting on the value fluctuations.
Prediction markets are similar to futures, though it is short-term. You try to guess what might happen within a day or up to a week and seek others to take up your offer. eToro offers such service, through its social network, where you can copy leader’s orders and earn a profit. You can check out such presentations in the picture below.
In this guide about bitcoin trading, we established a basis upon which you can work with BTC. Suffice to say, in terms of support, bitcoin has an upper hand over all other cryptocurrencies. It has the biggest number of platforms, tools, and instruments used.
On the other hand, regulations and strategies are quite the same for all cryptos. Still, BTC does lead the pack, often even influencing other digital coins in terms of their value.