You may have noticed that investing in crypto has become a big trend lately. And with stock markets suffering, many see crypto as the future of investment. Crypto trading comes in many different forms, and there’s a variety of ways that investors can get involved with it.
This article specifically looks at BTC to ETH trading and how a BTC to ETH exchange works.
What is a BTC to ETH Exchange?
BTC to ETH exchanges are platforms that allow users to easily trade between the currency pairs — namely, BTC to ETH. It is important that you select the right exchange when buying cryptocurrency as there are security risks if you choose the wrong one.
Here is an overview of the ways that you can trade crypto.
- Crypto Exchanges. These are large bank-like organizations that allow users to buy and sell crypto. Providing the exchange is reputable and safe, it is a convenient way to trade;
- P2P Exchanges. Not to be confused with a standard exchange, P2P platforms tend to be smaller and take a lot longer to transact because they match buyers and sellers;
- Crypto Vendors. These are like standard exchanges except they typically only sell cryptocurrency and don’t buy back. Fees also tend to be higher as they are smaller operations normally;
- CFD Trading Platforms. That’s the big bad wolf of crypto at the moment. Many new traders use CFDs thinking they are investing in crypto, when in fact, they are just gambling on margins.
There are of course a few other options, but normally, for those starting out, these are your main options. Our recommended choice would be a crypto exchange because they afford investors protection and give great value as well.
Opening a BTC to ETH Exchange Account
When you open a BTC to ETH exchange account you will need to have a few things in advance. Most exchanges will require you to verify your identity to some degree, which is known as KYC (Knowing Your Customer). This is for regulatory purposes and protects users on the exchange from money laundering and fraud.
You may simply be asked to verify yourself by email, or you could be asked for a copy of your photo ID. Some crypto exchanges go further than this. The level of identification needed will depend on how much BTC to ETH trading you’re looking to do.
Aside from that, opening an account is straightforward and no different to registering an account with any online service. The last thing to remember is that although exchanges have wallets, these are collective wallets that pool a lot of user funds together. It is highly advisable you get a crypto wallet before you join an exchange. This is to protect your currency.
How a BTC to ETH Exchange Works
Once on the exchange, you will normally have a dashboard that shows your account information, as well as a list of cryptocurrencies and tokens that the exchange offers. Good exchanges also have calculators, in-depth analysis and graphs to help you make the right crypto trading choices.
By the time you look at trading BTC to ETH, you will most likely have already traded a fiat currency for either BTC or ETH. When trading between a cryptocurrency pair, you will be doing exactly the same thing. It is worth mentioning that crypto is real money and you shouldn’t treat it any differently. Don’t rush to buy it at bad rates because you think it is a novelty.
Tips to Convert BTC to ETH
Tying into that last point, there are a few really good practices that you can employ when you convert BTC to ETH. So, make sure you’re doing it in the best possible way.
Here are three tips to help you convert BTC to ETH:
- Transact only when you need to. Frequent transactions will incur fees, and these add up over time — sometimes, to quite considerable amounts. By transacting only when you need to, you can keep transaction fees down and profit margins intact;
- Use a BTC to ETH calculator if you aren’t sure. Tools provided by crypto exchanges are there to help you. Exchanges want you to transact with them, BTC to ETH calculators allow them to clearly show you what to expect from a trade;
- Always store your crypto in your personal wallet. Hackers love targeting collective wallets because there are huge pots of money in them. Remove your funds to your personal wallet when the transaction completes.
Following these three simple steps will not only ensure a smooth trading experience, but will also keep your investment safe too.
BTC to ETH — What are the Risks?
As mentioned, there are a few risks involved with BTC to ETH trading. Hacking isn’t common but if you leave yourself exposed to it, then you’re more likely to be a victim. Be among those who protect their investment instead.
Next, with BTC to ETH, it is worth mentioning that Ether (ETH) is slightly Bitcoin (BTC) dependent in the marketplace. In other words, if BTC is up, then ETH tends to go up too. Likewise, if BTC goes down then ETH likely follows. This isn’t always the case though. Trading BTC to ETH should be done when the two currencies are moving in different directions.
Using the graphs and a BTC to ETH calculator like the one provided by Godex.io will help you keep track of BTC to ETH and know whether it is the time to buy or sell. Ultimately, crypto trading or using Bitcoin exchanges is all about buying and selling at the right price. Knowing when to do that and using tools provided will help you stay ahead of other traders.