Bitcoin’s been making headlines nearly every day over the past few months. Its fast-moving prices and booming cryptocurrency trades have been a hot topic among the media – to the point that even those unfamiliar with cryptocurrencies have embraced the trend for quite some time now. But those looking into buying and selling digital currencies for the very first time tend to become quickly overwhelmed – this is because Bitcoin & Co. work differently than traditional currencies. Below, we’ve listed out 10 tips to summarize how you can still (despite being a newbie) make your way into crypto trading successfully.
Table of Contents
#1: The Dilemma of Choices – Trading platform, Wallet, & Co.
If you want to buy and sell cryptocurrencies, you’ll first need to choose a trading platform and, if necessary, create a wallet. A wallet is essentially a digital wallet where you can store and manage your coins.
The easiest way to do this is to use a trading app, like BISON: The registration and verification process usually only takes a short time and, afterward, you can simply go ahead and start trading. Even the complex process of creating a wallet isn’t necessary; BISON takes care of that step for you.
#2: A Completely Cost- and Risk-Free Setup in Demo Mode
The demo mode offered by trading platforms like BISON is particularly convenient for first-time crypto traders. This allows you to test the platform’s functions in a relaxed way, as well as acquire your first cryptocurrencies through a simulation using play money before moving on to the real thing with real money. With BISON, you’ll be able to use the demo account immediately after completing the registration process.
#3: Avoid Fee Traps
Each time you buy and sell coins, you will incur fees. Some trading platforms also charge fees for maintaining an account or safekeeping your cryptocurrencies. If you’re not careful in choosing a platform, you could quickly fall into a fee trap. With BISON, on the other hand, you’re always in the clear and never have to worry about extra costs – here, you trade without any fees whatsoever and only pay a spread of 0.75% for purchases and sales.
#4: Don’t Forget Taxes
The tax authorities do not treat cryptocurrencies as traditional currencies, but instead as valuables. Profits gained from selling coins may be subject to tax in the amount of your personal tax rate. With BISON’s handy Info-Report, you can easily see – at any time – which transactions you’ve made and which profits and losses have been realized for which holding period, which is relevant for when you’re filing your taxes. This way, you avoid any unpleasant surprises and have all the necessary documents for your tax return at hand.
Good news: According to the current legal system in Germany, no tax is levied on cryptocurrencies that you sell at least one year after purchase. Even if you buy and sell coins within twelve months, gains of up to EUR 600.00 are tax-free.
#5: Keep an Overview
Much like shares, cryptocurrencies are also subject to periodic price fluctuations. It is difficult to make any predictions, and they are often based on what crypto experts state on social media. But don’t worry: You don’t have to follow thousands of experts to get a feeling for the current market sentiment. As a BISON user, you can enjoy the benefits of the BISON Sentiment tool; it evaluates the crypto community’s chatter for you.
#6: Track Price Movements
Looking at past price fluctuations isn’t only worthwhile for experienced traders, but also for those just starting out in the crypto market. By doing so, you’ll be able to develop a good sense of the ups and downs of the crypto market in no time. With its Twitter sentiment barometer as well as various other analyses, BISON helps you keep an eye on current developments and observe trends over a longer period of time prior to making a decision on buying or selling a currency.
#7: Don't Lose Your Cool
Strong and frequent price fluctuations come with the territory of the crypto market. So don’t get carried away and start panic buying or selling. Instead, set up automatic notifications alerting you when the price of your chosen coins changes – these are referred to as price alerts. This allows you to easily determine the optimal time to buy or sell certain cryptocurrencies. The price alert feature is also available on BISON.
#8: Avoid Fallacies
The risk is high, especially for first-time crypto traders, that you might choose a currency that only has a low trading volume or whose underlying project is of no real value (these are known as “shitcoins”). This is because, alongside the better-known currencies, like Bitcoin, there also exist spin-offs and parallel networks of lesser value. There are also hundreds of coins whose prices rise rapidly for a short time and then fall again just as quickly. With BISON, you always invest directly in cryptocurrencies that have a sufficient market capitalization.
#9: Find a Reputable Platform
When choosing a trading platform, several factors need to be taken into consideration. However, you should first verify how reliable the provider is. BISON is the first trading platform to be backed by a traditional stock exchange –the Stuttgart Stock Exchange. The high requirements and security standards that apply to traditional stock exchange services are also implemented at BISON.
#10: “Made in Germany” Security
Digital currencies are a hot target for cybercriminals and, as such, require innovative measures of protection against hackers. Crypto trading venues are also, for the most part, not as strictly regulated or monitored as traditional financial markets. This makes the security precautions of a given trading platform all the more important. BISON – the first platform made in Germany – features a thorough and multi-layered security concept.
Regardless of which trading platform you ultimately choose, just make sure it meets your needs as a first-time crypto trader. Some platforms like BISON take care of the legal requirements and the technical setup for you, ensuring that you get started as quickly and as easily as possible. After all – in the end, you should be able to focus on the essentials and not lose sight of the fun.