How do I start a Bitcoin trade
Well, first things first. Bitcoin refers to an exchange of digital information that you buy or sell goods and services. In other terms, it is a decentralized digital currency. Bitcoin has made a name to itself since it was launched. Bitcoin is the most popular and respected form of cryptocurrency in the world. If you want to jump into the world of cryptocurrencies such as Bitcoin, this article has got you covered. You should be always aware of the price of cryptocurrencies when trading.
Trading Bitcoin may seem easy for beginners who have shallow knowledge about the market. Well, like any other market, while trading Bitcoin, you have to be aware of what you want to venture in. Learn the processes involved in trading bitcoin as a cryptocurrency. You also need to find out the fees and costs that may be interested in it. Trading Bitcoins comes with a lot of unavoidable expenses. The cost of sending a transaction in the Bitcoin network has risen the past month. If you wish to start Bitcoin trading, the following are some of the standard fees that you may incur. That happens every time you make a cryptocurrency transaction.
Trading fee refers to fees incurred when for buying and selling on the cryptocurrency exchange. Every trade involves two parties. Person 1 who is the one whose order exists in the order book and person two places order which matches with (persons 1) order. Person 1 is usually referred to as a maker. That is because they make orders that are to be executed. It is the makers’ orders that have liquidity in the market. Yet, takers are the ones who remove this liquidity by matching makers’ orders with their own. The difference between the two is that makers receive a discount for providing liquidity in the market. Usually, as a percentage of the order value, exchanges charge taker fee and a maker fee. Maker fee is a type of payment incurred when placing a cryptocurrency order that does not have a limit. In this case, you can only make the sale if the cryptocurrency drops below a chosen price limit. Taker fee applies when placing a cryptocurrency order that fulfils right away. This type of order includes a market order. In a market order, you only buy bitcoin immediately regardless of the price. , this kind of fees is charged. Takers pay higher fees than makers. When it comes to the industry average, takers fee centralized crypto exchanges, in general, is about 0.25%. Makers have several advantages as compared to takers. For example, some deals in the world tend to pay makers for helping trades happen. Depending on the type exchange, trading fees charges differ. Other exchanges charge trading fees for every transaction you make. Other businesses charge the maker or taker fee according to the type of transaction.
The flat fee is also known as a flat rate. It refers to a pricing structure which usually charges a fixed rate for a service, regardless of the usage. This type of fee is favourable for the investors who prefer to pick existing orders from the order book. For exchanges that use this fee model, they do not have to charge different fees between makers and takers. That stands added advantages to those exchanges. Some of the businesses that use this model include; Huobi, Binance, to mention a few. You should also note that many deals have trading fees that reduce as volumes increase. This meaning that you are incentivized to trade in higher volumes. If you’re a high-roller crypto trader, the costs listed at the respective business websites might be a bit higher. That is unlike the ones you will have to pay when you trade.
When you deposit your cryptocurrency in exchanges, they don’t charge any amount of fee at all. That sounds interesting right. Indeed it is. But, that is not the case when you deposit fiat currencies. In fiat currencies, the deposit fee is charged. This kind of price usually depends on the mode of payment that you use. You ought to be careful when choosing your method of payment depending on the costs that they charge a deposit fee. For instance, when you use bank transfer deposits, its deposit fee is lower, unlike the credit or debit card deposit. That is because the exchanges themselves have to pay banks a particular payment processing fees. Not all cryptocurrency exchanges charge the same amount of deposit fee. But, there is no apparent industry average on deposit fees.
In the withdrawal fees, the exchange charges you a particular amount after trading with them, and you need to withdraw your funds or profit. But, the good news is, the withdrawal fees remain fixed at a certain level. So, you don’t need to worry if you have to withdraw a considerable amount from exchanges. That is made possible by the blockchain network. Blockchain network charges a network fee per transaction and not per Bitcoin(BTC). This network fee is usually mandatory for every transaction that you make as well as pocket friendly. Apart from that, there are individual chances where the cryptocurrency exchanges can pay the network fee for you. How good is that?
Miner fee This is the last, but not least type of standard fee charged when trading Bitcoin. Here, you pay for the cost that is taken to pay the people or computers that mine the cryptocurrencies.
There are several trading platforms and online exchanges that enable you to trade Bitcoin. But, you need to be aware of the platform security and trading costs before you think of diving in. There is no limit to starting trading Bitcoins. To start trading bitcoins, look for the right and relevant knowledge rather than money to start selling. When choosing the best exchange with different fees charges, be careful. Make sure you analyze their pros and cons before deciding to take them. Also, beware of the scams in the Bitcoin market. Having said that, have good luck in your Bitcoin trading journey.