The cryptocurrency world is a fascinating one and its potential to help people in reaping great rewards has made it a popular one. Therefore, it is not surprising that a large number of people are interested in entering this dynamic market and the first and most basic step into this digital currency world is knowing how to purchase Bitcoin. How can you be part of the market unless you buy a cryptocurrency? Bitcoin is the pioneer cryptocurrency and last year alone, helped thousands of investors in earning huge returns, due to which most people are focused on investing their money in it. Again, the only way you can get the same benefits is when you actually buy it.
How can you buy Bitcoin? You need to have a reliable and recommended broker such as 4XFX tradingwhen you wish to purchase a cryptocurrency. Having a trustworthy can make all the difference because scams are rampant in the crypto space and you don’t want to end up as a victim. If you are a newbie trader who is buying Bitcoin for the first time, you have to look at a variety of factors in order to know that you are making the right choice for your needs. Sure, you can easily find a list of brokers on the internet that are recommended for trading Bitcoin, but not all of them are a good it.
The choice of broker can depend on your own set of preferences and goals, but this doesn’t mean that you don’t have to consider anything else. There are a number of factors that need to be taken into consideration in order to ensure that you end up trading Bitcoin with a recommended broker. Some of these factors that deserve your attention are highlighted below:
- Information about the broker
The first step to choosing a broker for Bitcoin broker is getting some basic information about them such as the name of the founder, the location of the brokerage and the market they tend to focus on. In a number of countries, Bitcoin still remains a relatively unregulated currency, but times are changing. In a few years, the situation is going to improve drastically and be very different from today. As the use of Bitcoin becomes widespread, the governments all over the world are trying to exercise a degree of control over the cryptocurrency transactions. Illegal drug smuggling, money laundering and terrorism are just some of the reasons why the authorities have an express interest in controlling and monitoring the Bitcoin network.
Due to all these factors, it is essential to know the geographic location of the Bitcoin broker you are considering before you make a decision. The location of the broker dictates the laws and regulations that they have to comply with. Even though most of the countries don’t have any strict rules that are related to this digital currency, but if and when they do impose them, they can have a very significant impact on your ability to buy and trade Bitcoins. For instance, opting for a broker in China is not a good option for traders in the West as it is difficult to get verified, there is additional fees involved and they don’t offer good English support.
In addition, when you obtain information about the founders of the Bitcoin brokerage, it also enables you to get some insight into its reputation. If the founders have chosen to stay anonymous and have not provided any proof of reserve, you need to be very careful.
- The currencies that are supported
Yes, you have made up your mind about trading Bitcoin and so you are searching for a broker who can enable you to do so. However, it is also a good idea to take a look at the other cryptocurrencies that the broker supports. While there is no harm in trading Bitcoin, it is recommended that you diversify your investment and also buy some other crypto coins that have become popular in the last couple of years. You should take a look at the trading pairs offered by the brokers you are considering and ensure that they will be able to meet your needs if you do decide to spread your investment.
- Look at the liquidity
It is vital to check the amount of liquidity that the broker has to offer because Bitcoin is traded on a market where people are interested in buying as well as selling it. Liquidity refers to the ability of people to sell the cryptocurrency without being affected significantly, which leads to a drop in price. The more the number of buyers and sellers on a brokerage, the higher liquidity can be enjoyed by investors. One of the easiest ways for you to determine the liquidity of the broker is through the trading volume.
- The trading fee applicable
Whether you are trading Bitcoin or any other cryptocurrency for that matter, it is a given that there will be costs involved. You cannot do anything for free and it is the reason why brokers are able to stay in business. Usually, brokers are known to charge a small percentage of the amount that’s being traded. In most cases, this percentage is less than 1% because anything higher makes it impractical.
Moreover, a large number of brokers are known to have a sliding scale, which means that the fee they charge decline as the monthly trading volume of a trader goes up. In this way, the broker is able to make a lot of money so it is not likely that there will be any changes in the fee model any time soon. When you are making your decision, it is necessary for you to ensure that the charges are not exorbitant and are in accordance with the rest of the market. But, you should also bear in mind that some brokers might charge some additional fee on top of the Bitcoin trading fee.
- The purchase options available
The methods offered by the broker for making purchases can also have an impact on your decision. There are some brokers out there that only support a few and limited methods of buying Bitcoin and other cryptocurrencies and these restrictions can be a problem for some traders. A recommended broker is one who will provide you with the option of paying with cash, wire transfer, credit cards, PayPal and other online payment services in order to make the process as convenient for you as possible.
Furthermore, you should also pay attention to the privacy levels as credit cards are the least private method that can be used as compared to making a cash transaction.
- The time taken in processing transactions
A lot of traders want to know exactly h
ow long it will take for the Bitcoin to reach them once they have made a purchase and it is a very good question. It is crucial for investors to ensure that the broker they are dealing with offers them ‘locked’ in pricing. This means that the price you have purchased the Bitcoin at is the one that will be charged even if it takes a few days for the crypto currency to reach you. There have been scams where people bought Bitcoin at a low price, but were charged more when they finally got the crypto.
- Consider the transparency
Brokers that are transparent will not hesitate in publishing audit information or the cold storage addresses for that matter, which can aid traders in verifying their Bitcoin reserves. This is a way of confirming that you are not signing up with scammers who are only after your money. Apart from that, Bitcoin audits are an excellent way for brokers to prove to their clients that they have the liquidity that’s required for covering all the Bitcoin exchange sales made through their platform and are not operating a scam.
- Think about the anonymity
Even though it is immensely difficult for traders to stay completely anonymous when they are trading Bitcoin. The only way they can make it happen is when they choose to make a cash transaction via a person-to-person marketplace. Nonetheless, using a Bitcoin broker can offer you anonymity to a certain degree. But, if the broker you have selected follows an Anti-Money Laundering (AML) and Know Your Customer (KYC) policy then some identity information has to be disclosed. In this case, the broker can provide you with added security.
- The security measures implemented
One of the biggest risks in the cryptocurrency world is that the brokers and exchanges can be hacked. As a matter of fact, there have been such incidents that ended up wiping out a lot of cryptocurrency and led to losses for a lot of people. Therefore, security has become paramount for all investors, whether new or experienced. Thus, when you are looking at the different brokerage options that are available in the market, you need to take a look at their security measures. No one wants an attack because these digital currencies are quite volatile and the price can drop drastically. Malicious users will benefit, but traders will lose.
A safe and recommended broker is one that opts for cold storage for most of the funds, boasts two-factor authentication, provides SMS and email alerts, gives proof of reserve, has 24/7 wallet monitoring and also PGP encrypted emails. The broker should also have a secure protocol in place such as HTTPS. In this way, they can assure clients that they do everything to keep their information safe. Make sure the broker you want has all these features if security is important to you.
- Don’t ignore ease-of-use and mobile support
Before you decide to sign up with a broker, make sure you take a look at their platform. Most of them are willing to provide their clients with demo accounts that can be used for getting an idea of the kind of experience they will have during trading. You can use this option to judge how user-friendly the brokerage really is. It is recommended that you look for a broker that can offer you a simple interface as it can be used with ease. In addition, it also promotes quick loading, which means there are no lags or any other similar hassles when you are trying to execute your trades.
Other than that, mobile support is also an important feature that you should look for in a broker. These days, a variety of brokers are offering Android and iOS support to users because this gives them the freedom and flexibility to trade Bitcoins even when they are on the move and can also save a lot of time. You can easily find a broker that offers you this unique feature that can be immensely useful in the long run.
- Assess the customer support offered
One of the most crucial factors that can have a strong impact on your choice of broker is the kind of support being offered. Why is customer support important? It plays a very important role in your overall trading experience. If the broker is not supportive, you could end up with a problem during trading and not be able to resolve it in time to capitalize on your profit. Even a minor problem could lead to losses and this is something everyone wishes to avoid. Hence, a recommended broker is one that offers reliable and prompt customer support.
- The tools and perks
Last, but definitely not the least, a recommended broker will give you access to a plethora of tools and features that will help in Bitcoin trading. Some brokers also give their customers access to a complete education center where they can enroll in courses related to crypto trading. These courses can teach you various strategies that can be useful during trading and can be used effectively for enjoying high profits.
As long as you consider the aforementioned factors, you will be able to trade Bitcoin with a recommended broker.
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