While you may want to hold Bitcoin for the long term, you may also wish to
trade them for other cryptocurrencies or fiat currency. This is the fastest way to
make money with Bitcoin, but also the riskiest. To trade for fiat currency, you
can simply sell them at the current exchange rate on the same exchange you
bought them at, like Coinbase or Kraken.
If you want to trade them for other cryptocurrencies however, it’s best to move
them to Poloniex or another large exchange like Bittrex. Once on here you will
see the exchange rate between Bitcoin and other currencies. It should be noted
that this may differ from the exchange rate for the cryptocurrency to fiat pairing.
For example, the exchange rate for BTC to Litecoin (LTC) may differ from the
rate for BTC/USD and LTC/USD. Fees are usually low for crypto-to-crypto
trades, the maximum fee on Poloniex for example is 0.25%.
Another element you should examine is the liquidity for certain pairings. For
example, you don’t want a trade to be delayed because someone on the exchange
is not selling the volume of the coin you are buying. To check liquidity of certain
coin pairings go to http://coinmarketcap.com
These exchanges also along you to view the historical price charts for the
various pairings as well as the liquidity (ease of making a trade) for each market.
As with any speculative market, trading Bitcoin is risky and you are liable to
lose money. This is especially true if you trade on emotion, and not rationality. It
is advisable to proceed with caution and do your homework before you do any
trading for real. You can practice with virtual money (known as paper trading)
on sites like https://www.whaleclub.co/
Needless to say though, you will make mistakes at first. You’ll learn from these
mistakes, but it’s important that you make them with money you can afford to
If you are going to trade, take intermediate profits for yourself. This way any
gains you have made are in your bank account, and not just on paper. Dollar cost
averaging also applies to trading in addition to investing.