As the crazy Bitcoin price action appears to continue unabated, there is a lot of momentum to take advantage of. Many traders are looking to go either long or short on Bitcoin, albeit doing so is not as simple as following one specific strategy. For those who are willing to long Bitcoin, the following options can be considered. Do keep in mind every financial action undertaken will incur risks, and one should never “gamble” with money they cannot afford to lose.
Buy and Hold for the Long Haul
The most straightforward option to long Bitcoin these days is to simply buy BTC from a trading platform or broker and hold the balance in a wallet somewhere. Although this is a very simple process first and foremost, one also has to keep in mind this is a major mental battle. With such wild Bitcoin price fluctuations going on right now, it is very difficult to not pull the trigger and sell Bitcoin for a small profit. After all, there are numerous $100+ spreads every single day to take advantage of, but one has to hold down the fort if one wants to go long on BTC these days.
Leveraged Trading (Very High Financial Risk)
Traders who have some knowledge of how cryptocurrency markets work will often try to leverage trade Bitcoin and other currencies when the time is right. As there is a lot of good money to be made by doing so, one also has to keep in mind this strategy can easily cause financial harm upon inexperienced traders. Several exchanges and trading platforms allow users to long Bitcoin – or go short – through a convenient interface. One platform which comes to mind is BitMEX, which is perhaps the most popular among cryptocurrency enthusiasts and traders as of right now.
Other trading platforms offering very similar functionality include Trading212, Plus500, and several others. Bitcoin and other major cryptocurrencies have gotten a lot of exposure on such platforms in recent years, as speculators show an increasing interest in these volatile markets. With a leverage position, users are capable of going long or short with more money, but they will also dig themselves a much bigger hole if the trade goes awry. It is an option worth exploring, but one that should be considered carefully.
Put Options (Advanced Trading Tool)
Another interesting way to long Bitcoin comes in the form of put options. Albeit this trading instrument is not available as commonly as one might think, there are numerous platforms which specialize in offering such a trading option. The main advantage of a put option is how users can trade at a specific price by a certain date, but they are not obligated to do so. With their greater flexibility and higher leverage options, it is not hard to see why put options can be a great tool for Bitcoin traders. Novice users may want to look for other options, however, as this is not a trading vehicle to be taken lightly.
Bitcoin Futures Trading (CBOE/CME)
Ever since Bitcoin futures trading was introduced by bigger financial players, the concept has gotten some decent attention. While the trading volumes of both CBOE and CME are not as spectacular as most people would have liked to see by now, one has to keep in mind these products are still relatively new. Additionally, they were introduced during a time when Bitcoin showed signs of a price reversal, thus it is only normal this option hasn’t seen any spectacular trading volume just yet.
Now that the Bitcoin price is moving up by leaps and bounds, it is expected Bitcoin futures trading will become more popular. This trading vehicle can also be used to long Bitcoin, albeit it is still up to individual traders to make their own decisions along the way. One also has to keep in mind the Bitcoin futures longs versus shorts offered by the likes of CBOE and CME are not visible on coin tracking sites such as CoinMarketCap. Their impact on the actual Bitcoin value may be minimal, but it is still an option to look into under the current market circumstances.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency.