Bitcoin Ethereum

 

How to trade Bitcoin and Ethereum

Bitcoin and Ethereum are two of the most popular cryptocurrencies on the market, but what’s the difference between the two? There are quite a few key distinctions, but one of the biggest ones has to do with their blockchains. The Bitcoin blockchain is much older than Ethereum’s, with Bitcoin having been released in 2009 and Ethereum coming out in 2015, and it’s also more widely used as both a digital currency and an investment opportunity than Ethereum.

The basics

Before you start trading Bitcoin or Ethereum, it’s useful to understand how each works. Bitcoin is a digital currency that can be traded, bought, sold or invested in through a variety of methods. The way it's bought and sold makes it similar to stock in that you can buy or sell shares of a company (called tokens), but unlike stocks, bitcoins aren't tied to any particular company. Ethereum is another type of cryptocurrency that has grown in popularity over time but was developed separately from Bitcoin; its value also fluctuates with supply and demand. It also differs from Bitcoin as it’s built on its own blockchain technology rather than bitcoin’s blockchain.

Bitcoin vs. Ethereum

Many people get into cryptocurrencies because they want to make a quick buck. And it’s not just new investors. Day traders love trading in crypto because they can rack up huge gains in a relatively short period of time. So, who’s more likely to succeed as an investor in crypto—the day trader or buy-and-hold investor? The answer is simple: both types of investors can succeed if they pick their spots wisely. However, there are differences between Bitcoin and Ethereum, especially when it comes to taxes, security and volatility that could impact your decision about which type of investment strategy suits you best. Before you decide which coin (or coins) will work best for you, here’s what you need to know about each currency.

The different ways to buy coins

The best way to purchase either bitcoin or ether is through an exchange, such as Coinbase, Gemini or GDAX. Coinbase, for example allows users to buy bitcoin with a credit card along with wire transfers and some other methods. The fees are higher for cards but you will save on transaction fees. Some exchanges also allow users access to credit through peer-to-peer lending (though interest rates can be high). Once you have purchased bitcoin or ether from your exchange of choice (there is a list of exchanges in our guide), it's time to get digital tokens onto your wallet. Once again, Coinbase is an easy solution since it accepts both fiat currency (i.e., USD) and cryptocurrencies like bitcoin, which can then be exchanged for ether.

Where to store your coins

It’s important to decide how you will store your cryptocurrency. You can keep your coins on an exchange, but that comes with added risk of theft or losing money in a hack. The best way is to use something called a hardware wallet, which allows you to store your coins offline so they can’t be hacked or stolen. Trezor and Ledger are two common examples of hardware wallets. And if you do choose an exchange, make sure it has insurance against theft and hacking!

Advanced Trading Strategies for Bitcoin and Ethereum

Bitcoin and Ethereum are emerging as powerful tools for day trading. But there’s a difference between simple buying or selling, and short-term, technically driven trading. To help clarify exactly what you need to know—and do—we spoke with Randy Olson ( @randal_olson ), author of Brave The Bitcoin World: Living on Bitcoin in the Real World , an account of his experiment living exclusively on Bitcoin for three months. Here are five tips Olson gave us for beginner traders.