You have probably heard stories of people that have made good money trading Bitcoin. Maybe this has prompted you to consider starting a venture into this industry. But limited finances may prevent you from trading Bitcoin. Therefore, you might wonder whether you can buy and sell this cryptocurrency with fixed capital. Nevertheless, platforms like crypto trader have made trading or investing in Bitcoin straightforward. That is because you can quickly sign up to buy and sell Bitcoin for profit.
Crypto trading or investing has a learning curve. For some people, Bitcoin and its trading are complex concepts. That is because Bitcoin and its underlying technology are relatively new to some people. And this explains the reason for many traders and investors take caution when starting.
What is Bitcoin Trading?
Bitcoin trading refers to the buying and selling this digital asset in the market to make a profit. You buy Bitcoin when the prices are low and sell when they are high. But you can trade Bitcoin indirectly. That’s by investing in companies with Bitcoin as their primary source of income. Some firms mine or trade Bitcoin and have it as part of their core business model.
Can You Trade with a Limited Capital?
Theoretically, you can trade Bitcoin with any amount of money. That’s because most cryptocurrency exchanges allow traders to buy fractions of Bitcoin. Also, the amount of capital you need to start trading Bitcoin depends on various factors. These include your country, the exchanges you want to use, and how frequently you wish to buy and sell.
For instance, if you want to day trade or scalp, you’ll need a higher capital since you’ll be opening and closing transactions frequently. Also, if you wish to trade on margin, you require a higher starting amount since some brokers have a minimum deposit.
However, if you want to swing trade or hold Bitcoin for the long term, you only need a little money to start. You can buy fractions of Bitcoin on most exchanges, meaning you can start trading with a small amount.
But Bitcoin trading requires capital, like most ventures. And that’s where most people end their endeavor to venture into Bitcoin trading. Luckily, you can invest in or trade Bitcoin with limited capital. Here’s how.
Buying Bitcoin-Based Company Stocks
You can start by buying shares of a Bitcoin-based company with your limited capital. For instance, you can buy stocks of the companies that own or manage Bitcoin mining pools and exchanges. You can buy their company stocks to invest in Bitcoin indirectly. That means you won’t purchase and hold or keep Bitcoin. Instead, the company whose stocks you buy will invest on your behalf.
Diversified Index Funds
Another way to invest in Bitcoin with limited capital is through diversified index funds. Index funds are an investment that allows you to buy stocks or assets of different companies together. For instance, you can buy into an index fund that tracks the performance of the top 10 cryptocurrencies. That way, you get exposure to Bitcoin and other digital currencies without putting all your eggs in one basket.
A third way to trade Bitcoin with limited capital is through contracts for differences or CFDs. A CFD is an agreement between a trader and a broker, speculating on the underlying asset’s price movement, in this case, Bitcoin. You can also go long or short on the trade position. Long positions assume that the price of Bitcoin will go up, while short trade positions speculate that it will go down.
These are some ways you can trade Bitcoin with limited capital. You don’t need millions of dollars to start trading cryptocurrency. You can venture into Bitcoin trading with as little as a few hundred dollars and grow your wealth in the digital currency space.