Last updated on January 2nd, 2018 at 12:00 am
If you want to avoid buying Bitcoins with Paypal and do it in a more “standard” way you can always use Bitcoins exchanges. Bitcoin exchanges are basically like any other stock market exchange. They pair up individuals who wish to buy with those who wish to sell through a trading platform. There are a few things you need to keep in mind regarding Bitcoin exchanges:
1. Not all exchanges were created equal. Beware of newly formed exchanges, they may not have the financial strength to backup the money getting transferred through them. The most reputable exchanges today are Kraken and BitStamp.
2. Recently AvaTrade has started to allow Bitcoin trading in the Forex market. This allows you to trade Bitcoins in a cheaper and more liquidated manner.
2. Most exchanges (except AvaTrade) don’t allow you to buy Bitcoins with Paypal or deposit money through Paypal because of the issue explained here. Therefor you must wire money to the exchange’s bank account in most case. This is an issue because first of all it takes time (between 2-5 business days usually) and second it is a much more complicated process. But if you want to invest large amounts of money this is probably the best way to go.
3. Since Bitcoin trading is still in its early days, these Bitcoin exchanges are subject to many attacks from hackers, system overloads and other issues that often bring down their website. Although the situation is improving with time, it is sometimes impossible to buy / sell Bitcoins because the market is “panicing” and the exchange can’t handle the requests it’s getting.
4. Another issue that arrises because of the fact that Bitcoin trading is still developing is the fact that different exchanges can have a significantly different exchange rate – these can add up sometimes up to $20! Today MT. Gox is said to be handling around 80% of all Bitcoin trading on the web and so is considered to be the authority on the actual exchange rate. It would be wise to check the rate on MT. Gox before trading Bitcoins anywhere else.
5. Trading Bitcoins is just like trading any other currency so make sure that you are well versed in all the tips and techniques. A lot of people enter the trading business without proper research and lose all of their money – make sure you’re not one of them.