Bitcoin (BTC) has become widely recognized after over a decade of development. However, many people only know about BTC superficially or have heard that trading it can yield profits similar to stock investments—yet they don’t know how to trade BTC, missing out on lucrative opportunities.
To address these concerns, this guide will cover BTC trading in detail, including selecting cryptocurrency exchanges (platforms), setting up BTC accounts, step-by-step trading instructions, and common FAQs for beginners.
What Are the Different Ways to Trade Bitcoin?
From an on-exchange and off-exchange perspective, BTC trading primarily involves two methods: on-exchange trading and over-the-counter (OTC) trading (also called "counter trading"). Key differences include:
| Trading Type | On-Exchange Trading | OTC Trading |
|---|---|---|
| Venue Name | Exchange | Trading Platform |
| Matching Agent | Exchange | Broker |
| Matching Method | Centralized | Peer-to-Peer |
| Key Instruments | Spot, Futures, Perpetual Contracts, Options | Spot, CFDs (Contracts for Difference) |
Comparison Insights:
- On-exchange trading is transparent but lacks flexibility.
- OTC trading offers customization and liquidity for newer assets, making it ideal for niche cryptocurrencies.
Top Bitcoin & Cryptocurrency Trading Platforms
BTC trading platforms can be categorized into exchanges and OTC platforms. Here’s a breakdown of five leading options:
1. Binance
Overview: The largest global cryptocurrency exchange, founded in 2017, regulated by SFC, FCA, and others.
| Pros | Cons |
|---|---|
| High liquidity ($38B daily volume) | T+1 withdrawal limits for C2C trades |
| Low fees (0.1%), BNB discounts | Security risks (past hacks) |
| 350+ cryptocurrencies & NFTs |
2. Coinbase
Overview: A U.S.-based exchange founded in 2012, regulated by NYDFS and FCA.
| Pros | Cons |
|---|---|
| Strong liquidity ($1.3B daily) | No Chinese/TWD support |
| 200+ cryptocurrencies | No derivatives (only spot) |
3. IG Trading
Overview: A U.K.-based CFD platform (est. 1974), regulated by FCA and ASIC.
| Pros | Cons |
|---|---|
| Segregated client funds | Low crypto leverage (1:5) |
| Publicly traded (LSE: IGG) | Few crypto options (12) |
4. OANDA
Overview: A U.S. retail forex broker (est. 1996), regulated by FCA and NFA.
| Pros | Cons |
|---|---|
| Stable trading system | Slow withdrawals (2–7 days) |
| Established brand | Inactivity fees |
5. Mitrade
Overview: An Australia-based OTC platform (est. 2019), regulated by ASIC and CIMA.
| Pros | Cons |
|---|---|
| Zero commission, TWD support | Limited crypto offerings (~40) |
| High-security funds | No spot trading (CFDs only) |
How to Get a Bitcoin Trading Account?
Follow these steps to register (example: Mitrade):
- Click the registration link and select your region.
- Enter your phone/email and verify the code.
- Complete your profile (e.g., name, birthdate).
- Verify identity for higher deposit limits.
How to Trade Bitcoin?
After account setup:
- Deposit funds (or use a demo account for practice).
- Search "BTC" on the trading page.
- Choose "Buy" (long) or "Sell" (short).
- Set parameters (lot size, leverage) and execute.
Note: This applies to BTC and other cryptos like ETH or BNB.
What Affects Bitcoin Trading?
Key factors include:
- External: Macroeconomic trends, regulations, black swan events (e.g., hacks).
- Internal: Risk tolerance, trading skills, strategy, and psychology.
Bitcoin Trading FAQs
1. Which is better: on-exchange or OTC trading?
Depends on liquidity needs. OTC suits niche assets; exchanges offer transparency.
2. Which platform should I choose?
- For owning BTC: Binance/Coinbase.
- For trading profits: Mitrade/IG.
3. How much should I invest?
Limit to 20% of disposable income due to BTC’s volatility.
4. What leverage is safe for beginners?
Stay below 10x to minimize risk while learning.
5. How to manage position sizing?
Start with 10% of capital; scale up to 50% if the trend confirms.
Disclaimer
This content is for educational purposes only. Trading CFDs carries high risk; ensure you understand the terms before investing.