Best Platforms for Bitcoin Trading in Sri Lanka
Bitcoin is the first cryptocurrency. Its price has experienced exponential growth since its inception in 2008 [do not miss the section on the evolution of Bitcoin’s value in this article. It is fascinating to see the price change]. It is one of the most sought after financial assets by international investors. In this article, we write about a few aspects to consider when buying Bitcoin in Sri Lanka.
As an introduction, what can we say about Bitcoin that was not said already? We will only introduce the main features of this cryptocurrency:
Bitcoin is independent because no country, bank, or financial institution can control or manipulate the network containing Bitcoin. In other words, investors can buy, sell, send to external e-wallets, and receive bitcoins without having to rely on anyone.
Bitcoin is decentralised because it allows anyone to send money quickly and cheaply, at any time and to anyone in the world. No one can impose restrictions on who can participate and who cannot.
Bitcoin is public because everyone can see the transactions in the ledger (similar to a log), but at the same time, it is anonymous because it is not possible to link the transactions to the people who made them.
How to Buy Bitcoin in Sri Lanka? [in 5 steps]
Sign up with an Application that offers the ability to exchange Bitcoin. These applications are called Brokers, which are neither more nor less than intermediaries between buyers and sellers. In the following paragraphs, we will discuss some options for local investors.
Open an investment account with the chosen broker. The process of opening an account at the broker will be online, and you only need to upload your ID or passport and proof of address through the App.
After opening the account, you deposit money. You may use a credit card, prepaid card, or e-wallet to fulfil this.
Choose the exact time you want to buy Bitcoin, open the App, seek Bitcoin within it, and click on Buy. We say 'the moment you want to buy because Bitcoin is extremely volatile, meaning that prices vary greatly. Brokers Apps usually have well-designed user interfaces developed specifically to facilitate the process.
Once the purchase is fulfilled, the broker issues proof of purchase and collects a commission. Brokers charge commissions through the spread, which is the difference between the buying and selling prices. That is why it's key to check the spreads offered by the application and that they are low.
2 (Very Different) Ways to Buy and Trade Bitcoin
There are two general ways to invest in Bitcoin: buy real Bitcoin or invest in Bitcoin through CFDs (a financial derivative product). The main difference between these two options is that you own the real cryptocurrency in the first case, while in the second case, you do not own it, but instead, you use a financial derivative to speculate on Bitcoin's short-term price. Before investing, you should thoroughly analyse the different Brokers' differences, choose the one that best suits your objectives, and explore their commission structure and security measures. At the top, we have displayed the best ones available to local clients.
PrimeXBT: Top Bitcoin-based Platform
PrimeXBT (www.primexbt.com) is a Bitcoin-based platform that has drawn attention from the business world since it allows trading crypto, stock indices, commodities, and currencies on a single Bitcoin-based platform. Important media, for example, Business Insider, emphasises its Turbo platform. PrimeXBT is regulated in Seychelles and Saint Vincent & Grenadines and has many security measures (key points for trading cryptocurrencies). PrimeXBT provides reliable trading for beginners and professional traders who need real-time performance and market data systems. In terms of security, assets are stored in an offline storage system to protect assets from external threats.
The most exciting features of PrimeXBT in Sri Lanka are:
Quick registration without documents (i.e., step 2 was simplified in our 5-step process).
Shallow minimum deposit (equivalent to 0.001 Bitcoin)
Simplified Deposits and withdrawals (Allowing you to deposit via Bitcoin and Credit Cards)
24/7 customer service
In short, the account opening process is speedy, and the minimum credit card deposit is about $1 [You may also deposit from your current Bitcoin wallet]. If 1 dollar seems to be a lot of money to test the platform, it allows you to use its simulator. Besides, the interesting point is that through its referral program, PrimeXBT enables users to invite their contacts and get up to 50% in commissions to the referrer.
Following, we display a view of PrimeXBT's trading platform.
CFD Platforms That Allow Bitcoin Trading
As mentioned previously, although CFD platforms allow you to speculate on the price of Bitcoin, that is, to buy derivatives and wait for the price to rise to liquidate the position for profit, investors do not own the cryptocurrency. On the top list of platforms, you may find some of the best ones available to locals.
What is Bitcoin's price?
Bitcoin's price has grown exponentially since its inception in 2008. Here is a list of some significant milestones:
Before March 2010: Bitcoin was worthless, there were no markets to trade in, and virtually no demand from the general public. There was a German user called “SmokeTooMuch”, offering 10,000 Bitcoin at $ 50… There were no buyers. As of October 2020 (~ USD 11,400), that amount of Bitcoins is worth 114 million dollars!
May 2010: Bitcoin starts being accepted in exchange for real-life goods. A user in the US trades 10,000 Bitcoins for two pizzas; each Bitcoin was worth less than 1 cent (Although it's something).
July 2010: 6 days after this, Bitcoin's price rises 900% to settle at 8 cents. In other words, the guy who sold the two pizzas made $ 800 with his Bitcoin. Why did this happen? Because the word spread that you could start buying goods and services with Bitcoin, that is, it had officially become a bargaining chip.
Early 2011: Bitcoin reaches 1 to 1 parity with the US Dollar.
June 2011: First Bitcoin “bubble” reaches $ 31 but falls again to $ 2 towards the end of that year (However, it's price represents 100% growth compared to the value of early 2011).
December 2012: 13 Dollars.
December 2013: Between 600 and 1,000 Dollars.
Beginning of 2014: Begins a period of stability in the price of Bitcoin. Over the next few years, it will range from $ 300 to $ 1200.
May 2017: The price “explosion” of Bitcoin's price starts when it reaches $ 2,000.
September 2017: $ 5,000
December 2017: $ 19,783, reaches its maximum value, being 1,824% more valuable than at the beginning of the year.
2018: Starts to go down and ends the year at the price of $ 3,000.
June 2020: It is close at $ 10,000 again.
January 2021: It raises to $ 40,000.
February 2021: Peaks at $ 57,000.
As you can see, Bitcoin had shown massive volatility with a price close to zero when it was launched and reached high and rising prices if we look at the intertemporal curve. This is why it is essential to stay informed and check the updated price if you want to invest in Bitcoin.
What is the minimum amount to invest in Bitcoin?
Many people ask us about the minimum amount to invest in Bitcoin, and the answer is that it does not require a large amount of capital to get started. Hearing the news of the soaring price of Bitcoin, some people who do not understand the way it works believe that the minimum investment is 1 Bitcoin, which means that it needs tens of thousands of dollars to start. This is incorrect: on a platform like PrimeXBT, it may invest in a fraction of Bitcoin, for example, 0.001 Bitcoin, which is only a few dollars.
10 Tips to Consider when Investing in Bitcoin [Increase your chances of success]
People who were successful in trading Bitcoin use specific 'security' measures to increase the probability of making a profit. Most of the actions revolve around minimising commissions and operating expenses. However, others are a matter of attitude.
Use "Stop Loss" Orders: Rule # 1: Use "Stop Loss" orders. Rule # 2: Use "Stop Loss" orders. Rule # 3: Use "Stop Loss" orders. This is the best recommendation any Bitcoin investor can have; in other words, limit the potential to lose money using these types of orders.
Get started with a DEMO Platform: Before depositing real funds, always try the chosen broker's Demo platform.
Learn about Bitcoin and how its price fluctuates: Understand trading tips, learn, study, both in the basic concepts of Bitcoin; in other words, do not start investing without knowing (at least basic).
Analyse the price movements of Bitcoin and know that past performance does not imply future performance: Make your analysis. Some articles will tell you about the amount of money they’ve earned when trading Bitcoins. This does not mean that the person can repeat his/her past performance.
Develop your Investment Strategy: Make sure you outline a strategy before you start trading Bitcoin. For example, when to buy? When to close it? Make a scenario chart and invest based on it, and, as the strategy is tested against reality, adjust it.
Don't Rush your Profits: It is essential to make sure you do not close positions early. Maintaining your investment strategy is vital. Generally, this occurs when investors let their emotions take over. It's never a good idea, for example, to close a position and make a profit that is only slightly higher than your costs per transaction. Trading in this way (a method known as scalping) will lead to a loss of your total result unless this is justified by the underlying dynamics of a specific market. At the opposite extreme, swing trading attempts to profit in a market over a period that ranges from one overnight hold to several weeks, which minimises the number of times you pay the spread.
Bitcoin’s Leverage Should Work For You: Using a higher level of leverage allows the investor to invest more than what was deposited in the account. This exciting capacity that platforms like PrimeXBT provide, but the investor must take it responsibly because leverage multiplies profits and losses.
There will be ‘Not so Happy’ days: When a person starts trading financial assets, they will have days when making money will seem easy. Keep in mind that there will be days when the investment strategy won’t work.
Choose the broker that offers you good trading execution: From an investor's perspective, poor performance is the equivalent, economically, of the added hidden transaction costs. Suppose your provider offers you low transaction costs but cannot fill your order in a fast and reliable way. In that case, you should consider choosing another one with better liquidity and a more robust execution algorithm.
Have discipline: When you trade with Bitcoin, you must be clear about why you are opening a position, what level of profit do you expect to gain (be realistic), and when will you suffer losses if the price goes the other way (Remember Tip # 1).