In the past couple of months, Ethereum and Bitcoin prices have decorrelated considerably. With the Ethereum merge to proof-of-stake coming in September, there’s a lot of upside potential for the #1 smart contract platform to regain some of the lost value in the bear market.
On the other hand, Bitcoin remains a solid store of value and the most popular cryptocurrency among both mainstream and institutional investors. As Ethereum price rises versus Bitcoin, it’s a great opportunity to “stack some sats” and increase your BTC portfolio size.
However, converting ETH to BTC is never an easy decision. This article will help you get the most out of your Ethereum to Bitcoin trades.
5 Recommendations to Get the Most out of a Trade
Being successful at trading cryptocurrencies requires knowledge and discipline. Remaining patient and doing your own research will provide great long-term results. These five major principles should help you benefit from each trade.
1. Research Crypto Market and Read News About Coins
The crypto market is an ever-evolving ecosystem, where new technologies are unveiled every day. To understand the price movements, you will need to learn about the major players in the business. You’ll need to research the tech that drives them and the micro and macroeconomic factors that influence them.
It will take time to start getting acquainted with all the nooks and crannies of the blockchain world. However, if you are methodical in your approach, you can cut this time by half and start acquiring useful knowledge from the get-go.
Make sure that you understand key concepts:
- Blockchain technology
- Digital distributed ledger and networks
- Smart contracts
- Consensus mechanisms
- Coins vs Tokens vs Stablecoins
Once you’ve assimilated the basics of blockchain tech and crypto, you can start researching projects one by one and understand their technology. This should allow you to be able to detect major price movements when looking at the news and detect trading opportunities.
2. Decide on Your Investment Strategy
Your next step will be to decide upon your investment strategy. To do this, you should draw out a detailed investment plan that will include:
- Capital invested
- The ratio of the percentage of your portfolio in altcoins/Bitcoin
- Take profit levels
- Stop loss levels
Then, pick one or several investments or trading strategies, depending on your risk-taking appetite. If you wish to take it slow, you can simply average into the market by buying at regular intervals or swing trading.
On the other hand, if you believe you are up for it, you can choose a more daring trading strategy. Day trading and scalping, for example, will provide smaller but more frequent profits.
3. Find Balance Between Security and Anonymity of a Platform
Make sure you are aware of the security risks when investing and trading cryptocurrencies. Choosing a reliable exchange that has a good security track record devoid of hacks and data breaches should be a priority.
Additionally, you might want to ensure that you don’t share too much of your private data with trading platforms. Remaining anonymous in the crypto space is a great advantage, especially if you are the sole custodian of your funds. Finding a good balance of security and anonymity should be of the essence when selecting your crypto exchange.
4. Look for Affordable Exchange Rates
Trading fees can quickly pile up if you aren’t careful. This is especially true if you have opted for a higher frequency trading strategy. Fees can impact your profit margin considerably in a bear market where every fraction of a percent counts.
Consequently, ensure that you cross-check trading and withdrawal fees when comparing exchanges. Having fixed trading fees is a decent advantage, as you know exactly how much you will be paying, regardless of market conditions.
5. Choose the Suitable Exchange Platform Type
Finally, you will need to pull the trigger on the type of exchange you want to use. For instance, if you need a fiat currency on-ramp, a centralized exchange should be your go-to solution. Note that you will need to provide a full list of personal details in this case, as centralized exchanges need to comply with AML laws.
On the other hand, if your goal is to swap BTC to USDT, you can use an anonymous exchange like Godex.io. It provides a streamlined interface and doesn’t require an extensive identification procedure.
Hopefully, our list of tips on how to succeed in the crypto market and find the best way to convert ETH to BTC was helpful. Just remember that cryptocurrencies are highly volatile and risky investments, and you should approach each trade with caution.