How to Buy and Sell Bitcoins on Bitcoin Exchanges
This article is intended to provide a simple overview on how to buy and sell bitcoins at bitcoin exchanges.
Is buying bitoins difficult? Overall, trading bitcoins is probably not more timely and not more difficult than opening a broker account and buying your first shares in the stockmarket - let alone that the stock market may not be the best place to be right now.
And obviously, bitcoin trading can be a highly speculative investment and is largely something for people with some experience in trading already.
There are many bitcoin trading exchanges. But only a few of them currently provide (i) enough volume to limit the spread gap and hence keep fees low and (ii) a variety of funding options.
Bitcoin Central Gaining Traction
Bitcoin Central is recently gaining traction: It is the first bitcoin trading exchange that has partnered with a registered Payment service provider (PSP).Paymium, the company behind Bitcoin-Central has partnered with Aqoba, which is a registered PSP. This is a big development for a Bitcoin trading exchange to be able to operate legally within the European regulatory framework. Bitcoin-Central is leading the way in this respect.
The Top Three Bitcoin Exchanges (status Dec 2012)
Bitcoin Trading Can Be Worthwhile
Bitcoins started to trade in May 2010 with bitcoinmarket.com. Soon after, in August 2010, mtgox.com was opened for bitcoin trading.
Bitcoins have greatly appreciated in value since the start of bitcoin trading. To date, the exchange rate of BTC vs. USD is up by about +230,000 %, and up on a monthly average of +60%, despite the correction that happened from June 2011 to date. Bitcoins trading prices are far ahead of almost any other financial asset over the past 12-18 months, outperforming Gold, Silver, Stocks, etc.
How To Trade Bitcoins on Exchanges:
In principle, the major exchanges work in a very similar way, in three simple steps:
(1) You open an account . Some exchanges require some paperwork to enable large fund withdrawals to comply with know-your-customer and anti-money-laundering rules, but this is in my opinion a good thing.
(2) You fund your account with currencies, i.e. bank wire, EUR SEPA bank transfer, dwolla, paxum, AurumXchange, Liberty Reserve, etc.
(3) Once your funds have arrived at the exchange, you can start bitcoin trading. In the same way as buying and selling stocks, you put in buy or sell order for the price you want to pay or receive and then wait for the order to be executed or not.
Bitcoin Trading: Time Frames
This is an explanation for bitcoin traders and bitcoin investors about time frames for bitcoin trading: