There is far more than one type ofBTC trading. You can try the spot market, futures, and margin trading. If you are not interested in wasting your time on finding out what is better, you can rely on an automated platform such as https://stoic.ai/. It is very easy and understandable, as the robot will do everything instead of you.
A spot market is characterized by trading financial instruments (particularly cryptocurrencies) with the condition that the asset is immediately transferred to the buyer. The exchange of funds is called a delivery, and transactions and prices in such a market are also referred to as spot prices.
Bitcoin futures is a derivative financial instrument that can be described as a contract with the following conditions: the asset will be sold on a certain date in the future, but at a price that is currently available. At the time the contract is created, the price of the coin is fixed.
Margin trading is the conclusion of exchange transactions using borrowed funds. Not entirely at their expense, but only using them, which means that to use this function, the trader must have a certain minimum amount in his account and provide it as collateral.
The risks of investing in Bitcoin
Despite all the buzz around cryptocurrencies, some experts hold the conservative view that Bitcoin is a bubble and a mirage. To form an opinion, it’s worth at least considering certain risks you need to be aware of, before investing in Bitcoin:
- The experimental phase. The concept of cryptocurrencies is innovative, it is only 10 years old. That’s too short of a time frame to assess how much trust can be placed in it. Something unexpected can always happen. It is true that Bitcoin is already less of an experimental phase than newer cryptocurrencies.
- Technological risks. The cryptocurrency world is developing at a rapid pace, and there is a possibility that a currency more economically and technically advanced than Bitcoin will soon emerge or has already emerged. As a result, it could lose its value.
- Price volatility. The value of BTC in the short term is completely unpredictable. It is virtually impossible to predict exactly how much it will be valued tomorrow.
- Lack of consumer protection. A completed transaction cannot be reversed; the only thing left is to convince the recipient to voluntarily return the funds, if they have been transferred in error. The investor should also be aware of this danger, although it is in the investment area that the irreversibility of transactions is less significant.
- The possibility of theft or loss. All an intruder needs to do is gain access to a private key. As practice shows not everybody treats safekeeping with due care.
- Problems with the law. Different countries have different approaches to regulating BTC. There is no unified system, so it is unclear what the future holds for cryptocurrency.
Investing in Bitcoin is a risky business with virtually no guarantees. You must be aware of all possible risks, keep your finger on the pulse of events and keep in mind that technical and fundamental analyses are the only ways to make any assumptions about the currency’s future price. However, with due diligence, you can make a very good profit.