Bitcoin Market: All You Need to Know

/Bitcoin Market: All You Need to Know

What is the Bitcoin trading and investing journey like? The simplest breakdown...

Bitcoin Market: All You Need to Know 2018-04-11T13:57:34+00:00
Bitcoin Market: All You Need to Know

Quick inner navigation:

  1. What is the bitcoin market?
  2. Who controls the bitcoin market?
  3. What can affect the bitcoin market?
  4. How does the bitcoin market work?
  5. Top bitcoin exchanges in the market
  6. How to trade in the bitcoin market?

No single currency or commodity in the world could match the price action or attraction of bitcoin. The world’s leading cryptocurrency has increased almost 20 times in value this year alone, making it an interesting case for most people.

We are welcoming you into the exciting world of crypto as in this article, we will take a look at bitcoin and everything concerning its market.

What is the bitcoin market?

Our curiosity will lead us to ask what bitcoin market represents. It is one of the most interesting ones in the world at the moment. The cryptocurrency which was created after the global economic meltdown back in 2008 currently has a market cap of $236 billion. Bitcoin accounts for around 40% of the total market cap of cryptocurrencies which stands at roughly $600 billion at the moment.

 Bitcoin price

  • At the beginning of 2017, Bitcoin was trading at around $1,000. In fall 2017, the price of this digital currency has jumped up to $20,000.However, since the beginning of 2018, the price of Bitcoins started fall little by little.
  • Regarding price, bitcoin is way ahead of other cryptocurrencies. Compare to the second largest cryptocurrency – Ethereum is quite behind if as at the moment (4/2/2018) it is worth $392 and Bitcoin is worth $7,035.
  • The creator(s) of Bitcoin – Satoshi Nakamoto, has set the total supply of Bitcoins to 21 million. He/she programmed this using a logarithmic release function. So far, over 15 million bitcoins have been mined, meaning there are just a couple few millions are left for being mined. Once they have all been mined, then bitcoin will only circulate, as there will be no more mining.

What is the product behind bitcoin market?

  • Unlike the stock market that has several products and services incorporated in it, the product behind bitcoin market is the digital currency bitcoin itself. Bitcoin has emerged as an alternative form of currency to the traditional FIAT currencies we are used to.
  • The bitcoin market is driven by bitcoin which is a virtual currency. It has, however, gained so much significance over the years that the market now is worth over $200 billion.

Who controls the bitcoin market?

  • This is one of the biggest selling points of bitcoin and other cryptocurrencies; they are not regulated by any central body. The bitcoin market is a decentralized The decentralized bitcoin market is one of the wonders we have in the world.
  • There is no central body or authority controlling it, thus traders aren’t affected by the influence of banks or government.
  • Even though the market is not controlled by any regulatory bodies, it may still be affected by certain factors – primarily the supply and the demand, how do some countries teat bitcoins, what do outstanding people have to say about it and so on.

What can affect the bitcoin market?

  • One of the things that affect virtually all markets is news. News usually affects the price of bitcoin and in fact other cryptocurrencies in the market as well. There has been a debate which ended with the conclusion that positivity or negativity of a news announcement causes a corresponding upward or downward movement in price.
  • A few months ago, governments across the world started to sanction bitcoin, labeling it as a fraud and likely a bubble. This news drove the price of bitcoin to new heights as more investors entered the market despite governments and experts warn.
  • Likewise, the announcement by government licensed exchange platforms CBOE and CME that they will start trading bitcoin futures contracts on their platform surged bitcoin price higher.

How does the bitcoin market work?

  • This is a question that everyone asked at some point. The bitcoin market is a speculative one with its price chart sizeable. The performance of the currency as a market is very spectacular and labels the cryptocurrency as a Super Commodity.
  • Investors and traders follow several exchange platforms. Each platform is unique in that they have their price action and trading volume. As an investor, you will purchase bitcoin from an exchange platform, follow the price action of bitcoin and cash out when you believe you have attained the desired profit or loss level.
  • Exchange transactions of bitcoin vary, some recur daily while others monthly. Their trading volume is small compared to the millions of bitcoin being bought and sold in the speculative Bitcoin market every month

Several investors and traders influence the bitcoin price in the market, and they include;

  • Retail exchange traders
  • Early adopters “cashing out” to fiat
  • Institutional entities such as investment funds and ETFs.

All these steps explain how bitcoin market works.

Which bitcoin market should I choose?

When investors and traders ask this question, what they mean is which exchange platform they should choose. As discussed above, there is several exchange platforms trading bitcoin.

What to look out for before joining an exchange

It is very important that you know what to look for in an exchange platform before you begin trading with them. Here are a few things you should check before making your first trade.

  • Reputation: How popular is the platform amongst traders and investors? You can find that out via reviews.
  • Fees: before you commit to anyone, ensure that you understand their deposit, transaction and withdrawal fees.
  • Payment Methods: Each platform has its payments methods, you will have to find the one that suits you, be it a credit card, debit card, wire transfer or PayPal.
  • Verification Requirements: While joining some exchange platforms you need to verify your identity, thus you need to know the one that suits your current form of ID.
  • Geography: Some platforms are restricted to people of certain regions. For example, after China banned cryptocurrencies, many cryptocurrency exchange platforms stopped supporting the Chinese market.
  • Exchange Rate: Each platform has its exchange rate. Find the rate that is okay for you before you commit.

Top bitcoin exchanges in the market

Coinbase >> (Ratings 4.8)

This is one of the most popular exchange platforms as it is trusted by investors and has millions of customers globally. This platform makes it easy for its users to purchase, sell, trade and store bitcoins and other digital currencies. At the moment, it is available to only those in the US, Europe, UK, Canada, Australia, and Singapore. Payment methods include credit cards, debit cards, SEPA deposits, and bank transfers.

Pros:

  • It has an excellent reputation.
  • Its security is great
  • It charges a reasonable fee.
  • Very easy for beginners to understand.

Cons:

  • It has limited payment methods.
  • Limited to some countries.

cex.io >> (Ratings 4.0)

This platform provides a wide range of services for its bitcoin traders. It makes it possible for users to trade fiat money with bitcoin and vice versa easily. It is user-friendly, thus perfect for beginners. Regarding security, the Cex.io website is secure. Payment methods include credit cards and bank transfers.

Pros:

  • A secure website and user-friendly.
  • Very good reputation.
  • Supports credit cards, with low exchange rates.
  • Supports countries across the globe.

Cons:

  • Tedious verification process.
  • Cost of depositing is expensive

Kraken >> (Ratings 4.5)

This is the largest Bitcoin exchange in euro volume and liquidity. The exchange platform allows its users to purchase, sell and trade between coins. It also supports other cryptocurrencies. Payment methods include EUR SEPA Withdrawal (€0.09) – EEA countries only, USD Bank Wire Withdrawal ($5 USD) – US only, USD Bank Wire Withdrawal ($60 USD) – outside US only, EUR Bank Wire Withdrawal (€60) – outside US only, JPY Bank withdrawal (¥20) – Japan only, CAD EFT Withdrawal ($10 CAD fee, $25K CAD daily max) – Canada only.

Pros:

  • Good reputation across Europe.
  • It offers a decent exchange rate, with the low transaction and deposit fees.
  • It is supported worldwide

Cons:

  • It has limited payment methods.
  • The interface isn’t suitable for beginners.

Bitstamp >> (3.8)

This is another popular bitcoin marketplace in Europe. It is one of the first bitcoin platforms established. It is a very secure and trusted exchange platform, with advanced security features such as two-step authentication, multisig technology for its wallet all available to its users. Payment methods include credit and debit cards.

Pros:

  • A high level of security with a good reputation in Europe.
  • Transactions fees are low

Cons:

  • Not ideal for beginners as it is hard to navigate.
  • It has limited payment methods, with high deposit fees.

CoinMama >> (Ratings 3.8)

This is one of the most reputable bitcoin exchange platforms. Users can purchase bitcoin using their credit card or cash via MoneyGram and the Western Union. It is perfect for those who want to purchase bitcoin using their local currency. This platform is available for traders worldwide. Payment methods include credit and debit cards.

Pros:

  • Excellent reputation
  • Friendly for beginners as it has a great user interface.
  • Has a wide range of payment options.

Cons:

  • High exchange rates
  • It lacks bitcoin sell function
  • It charges a premium fee for credit card

Other highly reputable and secure bitcoin marketplaces include;

How to trade in the bitcoin market?

You can purchase, sell or trade bitcoins on several platforms across the world. Two major websites allow you to do this. Let us have a look at them.

Hitbtc >>

This is one of the biggest exchange platforms in Europe, and it is based in Estonia. The platform is focused on the European market in general and has a daily trading volume of roughly 28,000 BTC.

  • This platform has a limited payment method when acquiring bitcoins. To trade or make other transactions, users must verify their accounts by providing proof of their identity, residence, and ownership over the bank accounts they wish to fund.
  • The verification process takes at least three business days. As a new user, you will have your funding and transaction limit set to 2,000 €/$ per week and 10,000 €/$ per month, though you can contact their customer support if you wish to trade with higher limits.
  • Their transaction fees vary, depending on the amount deposited and the currency used. However, deposit in bitcoin and other cryptocurrencies are unlimited and incur no fees. Hitbtc platform offers varying orders that include; market, good-till-canceled, good-till-date/time, day, immediate-or-cancel and fill-or-kill. They also offer users a wide range of trading pairs and support for EUR, USD.

Pros:

  • Easy for beginners as it has a user-friendly interface.
  • Anonymous accounts.
  • Available in multiple languages.
  • Low transaction fees attached.
  • Very strong security.

Cons:

  • The verification process is difficult and time-consuming.
  • It doesn’t have a mobile app.
  • The withdrawal process is slow.

Binance >>

This exchange platform is solely focused on improving bitcoin trading features like security, efficiency, speed, and scalability. You can decide to trade bitcoin directly on their platform, or you can convert it to their coins Binance Coin (BNB). The platform doesn’t provide fiat to bitcoin exchange; it rather focuses purely on crypto-to-crypto exchanges.

Pros:

  • The execution time is very fast compared to other platforms.
  • It is highly secured and is backed by one of the biggest names in finance, trading, and blockchain technology in Asia.

Cons:

  • Transactions are limited to coins only; fiat currencies cannot be used.
  • Since it is natively Chinese, documentation is often difficult to get oriented in other languages like English.

What time does bitcoin market close?

This is one of the major differences between traditional financial markets like stock and forex with bitcoin market. Since the bitcoin and crypto market is decentralized and isn’t regulated, there is no market closing time. Most beginners in the bitcoin trading world often ask; when does bitcoin market close? When does bitcoin market open? Both questions have a similar answer; there is no closing or opening time. When bitcoin markets open is when you decide to start your day’s trading.

To sum things up

The knowledge gotten from this post will be very useful for your bitcoin trading and investment journey. Bitcoin has over the past few months become a currency that has gotten recognition and approval from each region of the world.

Even though it has experienced a plunge in price action over the past few days, analysts are of the view that bitcoin will soar even higher in 2018.

Make sure you check our website and learn more about various cryptocurrencies.

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