Bitcoin for Beginners: Things You Need to Know Before Trading

Bitcoin is a decentralised digital currency operating on a blockchain network. It has been around since 2009 and has been through significant price fluctuations. Experienced traders consider it as a safe investment, while others consider it a highly speculative and risky one. Bitcoin surpassed AUD 1 Trillion in market capital in February 2021. One out of four people in Australia invests or plans to invest in crypto. The current bitcoin price in AUD is about $32,000 ( January 2023). Despite several controversies, this cryptocurrency continued to trend in the market over the years, benefitting millions of investors.

Is It a Safe Investment?

1. Bitcoin's value can be highly volatile and fluctuate significantly in a short period. It means you risk losing a significant portion of your investment if you buy at the wrong time.
2. Any government or institution does not back it, so it is not subject to the same regulations as traditional investments. Hence, it is essential to protect your investment from fraud or hacking.
3. Bitcoin transactions have a record on a public digital ledger called a blockchain, which makes them secure and transparent. However, digital wallets and exchanges that hold these virtual currencies can be vulnerable to hacking, so remember to be careful.
4. It is a highly liquid asset that can be easily bought and sold. It makes it easier to enter and exit a position.
5. Bitcoin's adoption is growing as more merchants and individuals accept it as a form of payment. It increases its utility and potential value. The currency has a limited supply of 21 million Bitcoins which can create scarcity and drive demand.

How to Choose the Right Platform?

The platform should have robust security measures to protect your Bitcoin from theft or hacking. Look for features such as two-factor authentication and cold storage. Research the platform's reputation and read online reviews to get an idea of the experiences of other users. Look for platforms with a proven track record of security and reliability. Make sure the platform accepts your preferred payment method, such as credit card, bank transfer, or PayPal.

Factors to Consider While Choosing a Platform

• Compare the fee charges by different platforms for buying and selling Bitcoin. Some platforms may charge higher fees than others, affecting your profits.
• The platform should have a user-friendly interface that is easy to navigate. This will make it easier for you to manage your trades and track your performance.
• Check the jurisdiction where the platform is based. Some countries have different regulations and laws regarding crypto trading and exchanges.
• The platform should have a significant trading volume, ensuring that there are always buyers and sellers to match your trades.
• Some platforms offer a built-in digital wallet to store your coins, while others require your wallet. Make sure you are comfortable with the platform's wallet options before making a purchase.
• Some platforms limit the number of such currencies you can buy or sell at one time, while others have no limits. Make sure the boundaries are in line with your investment goals.
•  Some platforms are insured against losing or stealing their clients' assets. This can provide an extra layer of security for your investment.

Bottom Line

Check the current bitcoin price in AUD or the currency of the nation you live in before you make the purchase. It's essential to conduct your research, understand the risks involved and have a well-thought-out investment strategy before making any investment decisions.