Buying and Trading Bitcoin in 2023 – Essential Aspects to Consider

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Last Updated: December 30, 2022

Written by: Ivan Potocki

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As 2022 ends, a common question among crypto traders and beginners alike is whether digital currencies will be on their side in the coming year.

Cryptocurrency is undoubtedly here to stay, and this has repeatedly been proven in the last couple of years. So, if you’re looking to buy and trade virtual currency in 2023, learn that it’s still a feasible investment asset.

Bitcoin, in particular, the largest cryptocurrency by market cap at the time being, is one of the most profitable investments, along with altcoins such as Ethereum, Calvaria, and Tamadoge.

But, as it’s only normal, 2023 will come with favorable circumstances and challenges. That’s because the crypto space is rapidly changing, with price fluctuations as a common particularity.

Thus, before rushing to buy Bitcoin, you should learn the basics of trading and work on a robust strategy to make the most of the Bitcoin price. You’ll hence make pertinent decisions during the process and stay ahead of the curve.

Trading Bitcoin in 2023 is certainly risky, but it’s only up to you whether there’ll be more gains than losses. To make your job easier, we’ve developed some practical tips to consider on your journey.

Bitcoin Trading vs. Investing

One of the most common mistakes people make is that they don’t document enough about crypto trading and often confuse it with investing. So, let’s shed some light on the two concepts.

Investing refers to the process of purchasing cryptocurrency and holding it for the long term. Investors’ reason for buying for the long run is obviously to earn profits, but just because they think the crypto’s price will come to a meteoric rise – regardless of the peaks and troughs that may occur along the road.

Typically, individuals invest in virtual currency because they believe in the developers behind it, the ideology, and the technology underlying it.

On the other hand, Bitcoin trading means purchasing and selling Bitcoin in the short term. Traders often buy whenever they think the crypto’s price is advantageous enough to bring them considerable returns and don’t plan to HODL (“hold on for dear life”) the currency for too long.

Since many cryptocurrencies, especially Bitcoin, have surged in popularity lately, more and more people are interested in trading; thus, they’re pinning their hopes on the crypto’s price fluctuations – volatility.

Volatility can indeed make or break your earning potential, but if you learn to anticipate the market correctly, you’re likely to succeed.

Be Mindful of Bitcoin Trading Basics

Before moving on to crypto exchanges and trading methods, let’s talk a bit about trading basics. Advisably, you should research blockchain, the technology underlying cryptocurrency.

Due to its high-security potential, it has been adopted in various industries, including healthcare and FinTech. Studying decentralized ledgers can give you an important clue on how to trade crypto for the most returns.

Apart from this fascinating technology, it’s also recommended to delve into the storage methods out there. Basically, there are two types of crypto wallets – hot and cold.

Based on the various levels of security provided by these wallets, you’ll decide on a trading strategy. For example, hot storage relies on an Internet connection, so you’ll store your crypto online. This means you shouldn’t hold the coins for too long, as online storage is not exactly the safest one.

It’s also not advisable to depend on a hot wallet to store your Bitcoin, as this currency is currently the most valuable one.

So, if an unexpected hack takes place, you’ll suffer considerable losses. Focus instead on a cold storage method, such as hardware and paper wallets, to keep your assets far from the curious eyes of bad actors.

Don’t Trade Blindly

Even if you’re purchasing for the short run, ensure you have a sensible perspective about this action. Trading without much attention is unlikely to take you too far, so be mindful of aspects such as:

• Don’t buy it simply because the price is cheap. The decision to trade virtual currency shouldn’t have so much to do with its cheapness but with its market cap. Bitcoin is the largest crypto by market cap, so be sure you analyze factors such as trading volume, price history, and global adoption, and not just the actual price, before taking the leap.
• Avoid FOMO – fear of missing out. It’s common to get absorbed in your emotions in this process, but you should avoid such a situation as often as possible. Ensure thus you have great expectations, but don’t expect to make meteoric gains within minutes of buying your first crypto. This takes time, research, and dedication, as well as risk-taking.
• Establish a clear stop-loss level and a profit target
• Have a purpose for entering each trade

Research Bitcoin Exchange Platforms

There are a bunch of crypto exchanges out there, but this doesn’t mean you should go for whatever crosses your path. Ensure you take into account factors such as the platform’s features, fees, ease of use, and, most importantly, security.

Not all exchange platforms have clear security protocols, and that’s mainly because of the lack of regulations in this sense. As for the charges, ensure you look for platforms having little to no fees per transaction.

Most exchanges allow for Bitcoin trading, but if you’re also interested in buying and selling altcoins, you should choose a platform that provides traders with many currency options.

Develop Trading Strategies

Your goal as a trader is to minimize losses and maximize gains, but unfortunately, this is rarely possible without a fruitful strategy in place. That’s why developing a robust trading plan before learning the basics is crucial.

Luckily, you have plenty of options, so you can adopt a tactic based on your lifestyle, needs, expertise, and, last but not least, risk appetite.

If you’re a beginner, consider starting your adventure with a go-to procedure like dollar-cost averaging or day trading, and only after gaining some experience in this art, orient yourself toward more complex strategies such as range trading, scalping, event-driven trading, and RSI (relative strength index) trading.

Don’t forget to secure your information trading crypto by never sharing account credentials and relying on a top-notch storage option.