Hundreds of my readers join me every Monday at 11 a.m. ET for my free Markets Live stream presentation. We go over the markets' setup for the week - stocks, debt, oil, currencies - and talk about different low-risk, high-reward ways to use rules-based trades to profit.
We've only got about 30, maybe 40 minutes a week to talk on the stream, but I always make time for two things: to check for questions from folks in the live chat... and to talk about Bitcoin and microcurrencies.
They're just that important.
I recently got a question from Renee T. It was a simple question, but a big one. The answer could help so many people out that I'm going to share it with everyone here, right now.
She asked, "How do I trade Bitcoin?" Let's jump right in...[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Time to Get Started
Just like you need a brokerage account to trade stocks, you need a platform called a "digital wallet" to buy and sell Bitcoin.
There are a ton to choose from, but I like Coinbase; it's a digital asset exchange company widely recognized as one of the most credible platforms used to buy and sell Bitcoin and other microcurrencies.
Once you settle on a wallet, you'll need to hop on your Apple/iOS or Android device and download what's called an authenticator. This lets you verify your identity when trading, and it's a critical security step.
One you could use is "Authy," from Authy Inc. It's free to use, and it should be available in your device's "app store." Follow its directions to get set up.
Then it's time to sign up for and create a Coinbase account at Coinbase.com. Again, you'll want to follow its step-by-step instructions. It will send a text message or e-mail to verify it's really you, and then you can add funds from a bank account, credit or debit card, PayPal account, or wire transfer. It's up to you, but Coinbase recommends using a bank account.
That's your digital wallet, all set up. Now comes the fun part - buying and selling!
How to Buy and Sell (It Couldn't Be Easier)
Different exchanges trade different offerings, but Coinbase Exchange offers the "biggies." There's Bitcoin, of course, and Bitcoin Cash, Ethereum, Litecoin - around 17 different microcurrencies. Coinbase will display the going rates for buying and selling different coins.
Now that it's time to buy, it's time to tackle one of the biggest misconceptions about Bitcoin and other microcurrencies; I run into this one all the time...
You do not have to buy entire coins.
Right now, just one Bitcoin is trading for north of $9,000. I understand that'd be a big, maybe even impossible outlay for folks, especially beginners. After all, you're talking to a guy who refuses to pay more than 500 bucks for a single trade.
You can absolutely buy decimal fractions of coins. Consider your risk tolerance; how much you're comfortable losing.
Let's say you feel comfortable with $100. You can take that $100 and, on the exchange at today's prices, buy 0.0096774 of a Bitcoin! It's all yours. It can take up to a week for the coins to hit your wallet, but you'll see right away if your purchase was successful.
Now it's time to trade...
How to Get Set Up to Trade
Now that you've got some Bitcoin in your digital wallet, it's time to hit the global exchange, Binance.
Binance is the biggest microcurrency exchange on the planet, and in order to use it, you need to own Bitcoin (which is why we started at Coinbase). It's worth repeating here that you have to be aware of your risk tolerance.
So, if you're in the United States, go to binance.us. Outside the United States, binance.com will work. Click on "register" to begin.
Create an account with all the information you're asked for. You'll then be prompted to solve a very simple puzzle to prove you're a human being (and not a malicious bot). Binance will ask to verify your e-mail and set up two-factor authentication (2FA). I use 2FA for lots of things, and I encourage everyone to take advantage. You'll be sent an authentication code to your e-mail or phone, which you then input into the site.
This might seem like a lot of security, but trust me: You'll be glad it's there.
Now it's time to deposit your Bitcoin. Binance doesn't take credit cards, bank accounts, wire transfers, or PayPal - only digital currencies. That's why we used Coinbase to buy Bitcoin.
Select "funds" from the menu, copy your Bitcoin wallet address, and send however much Bitcoin you like from Coinbase to Binance. You'll be asked to authenticate at least once during the process. This is to keep your hard-earned money as safe as possible.
Again, you don't have to deal in whole Bitcoins; fractions are just fine.
Now You're Ready to Make Money on Bitcoin
Now, I have to keep my best Bitcoin trading strategies for my Microcurrency Trader subscribers; it's only fair.
But I'm happy to share a basic strategy to get started. It's really simple.
Now, there are three ways to make money with Bitcoin or any digital currency.
One way is to mine them, though this is nowhere near as easy as it used to be - and, as I've said here, it wasn't all that easy to begin with. Mining Bitcoin involves gathering massive computing power - entire buildings full of dedicated processors - and putting them to work hashing data to "mine" fractions of a Bitcoin.
When I started out, I had a spare room full of computers, so I could make one Bitcoin a week, give or take, but the further we go along into mining Bitcoin, the more power is needed.
Mining's generally a non-starter for most beginners these days, though if you can get your hands on a 3,000-square-foot building packed to the roof with sophisticated, expensive computing chips, more power to you.
The second moneymaking method is... buy and hold. Just like it says: You buy at a lower price, wait until Bitcoin moves higher, and then sell. I like it because it works. Some of the biggest profits I've ever made have been from doing this.
Back in late 2017, Bitcoin was experiencing a kind of craze. It ended up peaking at nearly $20,000, up from around $1,000 at the beginning of the year. The profit potential is obvious.
Now, I do think Bitcoin could return, slowly, to those highs - this time to actually stay there. But the thing is, there are more digital currencies out there now. Some will be a flash in the pan, others will have real staying power. Understanding the forces that drive digital currencies, like market or fiat currency volatility, or scarcity, is the key to making money using the good old buy-and-hold method. As my Microcurrency Trader readers might tell you, research is important.
The third and most active way of profiting on Bitcoin is trading. I happen to think it's the best way. It's not buy-and-hold, but buy-and-sell-soon-after, according to what I call "currency waves."
I can't reveal much about this particular trading strategy, but a currency wave is a way to trade digital currencies according to rules - not emotions - using bullish and bearish trends. It has the potential to unlock some huge profits.
You can go right here to learn how to get much, much more about currency waves in my Microcurrency Trader research.
Plus, don't forget to check out my presentation on this opportunity that could be your ticket to a lifetime of wealth...
You see, you could've already turned $900 into over $11,709 - in just 30 days - by following this little-known method.
That's because big shippers like Amazon rely on this tiny currency to deliver millions of packages around the world. Make no mistake: The potential fortune to be made here is huge...
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About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.