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Bitcoin Trading: How to Buy, Sell, and Trade Bitcoin

Date Modified: 10/02/2025

Bitcoin (BTCUSD)* was developed by a software developer under the pseudonym Satoshi Nakamoto in 2008.

It was first made available on the market in 2009, and since then, it has undergone remarkable development. For example, on Thursday, 21 November 2024, it almost hit $100,000 on trader optimism following the presidential re-election of Donald Trump, who is known for his crypto-friendly approach. This popular cryptocurrency depends on a feature called a blockchain, which is a public register that records all transactions carried out within the Bitcoin network.

While this cryptocurrency is only produced and traded electronically, you can still gain exposure and experience trading it through a registered and licensed CFD provider. But before you decide whether to trade it or not, it would help to understand its origins, unique features, and what affects Bitcoin's prices.

Let's take a closer look at Bitcoin and how you can buy, sell, and trade it:

Golden Bitcoins on Black background.

TL;DR

  • Bitcoin can be traded on CFDs and cryptocurrency exchanges.
  • Trading Bitcoin on crypto exchanges requires storing it in a crypto wallet, away from hacking attempts and paying storage fees.
  • For traders seeking exposure to rising and falling Bitcoin prices without having to own the underlying crypto or worry about storing it, Plus500's Bitcoin Contracts for Difference (CFDs) can be an option.
  • Bitcoin CFDs provide leveraged trading on Bitcoin prices, meaning that gains and losses get amplified.

How Does Bitcoin Work?

Unlike fiat currencies, such as euros or US dollars, which are supervised by a central bank like the Federal Reserve, Bitcoin isn't controlled by a single body. Instead, Bitcoin relies on a peer-to-peer network, which is a system composed of the computers of all users participating in the network (also known as nodes). This can be compared, for example, with the networks on which file-sharing systems are based.

Moreover, Bitcoins are created automatically when the computers on the network perform complex numerical tasks. This process is known as Bitcoin mining. Mining is planned in such a way that, over time, it becomes more and more difficult for users to mine Bitcoins. Additionally, the total number of Bitcoins that can ever be mined is limited to 21 million units. Because of these limitations, Bitcoin is often considered to be reasonably inflation-proof. It is not possible, for instance, for a central bank to issue new bitcoins, which means that the coins that are already in circulation won't be devalued. Bitcoin production is also cut in half every four years, which is known as the Bitcoin Halving. This event also affects Bitcoin's value as it becomes more rare. Nonetheless, traders may want to note that, in recent years, as Bitcoin reaches maturity, evidence shows that its presumable safe-haven status is becoming less plausible as it, too, can be affected by the broader market movement.

Within the Bitcoin network, transactions are sent quickly and confirmed in a few minutes. Because they are completed on a worldwide network, they are not dependent on their physical location. So it doesn't matter whether someone sends Bitcoins to the nearest city or across the world. Anyone can use Bitcoin because the software can be downloaded and used free of charge.

Furthermore, cryptocurrencies are secured in an encryption system with two "keys", the public key and the private key. The public key is a unique personal Bitcoin address, which all network participants can view. The private key functions as a type of PIN code that only the respective Bitcoin address owner knows. This key should not be passed on to anyone else and must be kept in a safe place.

Bitcoins are sent to other Bitcoin addresses using seemingly random chains of around 30 characters. While every network participant can see other users' public addresses, it is not necessarily possible to associate an address with a specific person. It is important to note that a transaction cannot be reversed once it has been verified. After the recipient has accepted the money, it's gone. So, if you accidentally sent it to the wrong address, you usually cannot undo it.

An infographic of how the Bitcoin system works

Trade Bitcoin: How to Buy Bitcoin

There is a variety of Bitcoin-buying methods available for those who want to do so. Here are the main ones:

  • Trading Bitcoin on crypto exchanges: Crypto market exchange platforms let you trade fiat currencies such as euros or US dollars for bitcoins or satoshis, the smallest units of Bitcoin (Bitcoin's equivalent to cents). You can also exchange bitcoins for other cryptocurrencies. Since the exchanges' fees can vary widely, it helps to compare the providers' terms in advance. You can also look at the exchange's regulation and its deposit and withdrawal options.
  • Buying and selling on online marketplaces: Investors can also buy and sell Bitcoins on online marketplaces. In contrast to the crypto exchanges, marketplace users have to enter and search for offers or trades independently. There are now also various physical Bitcoin exchange machines worldwide where users can exchange Bitcoins for another digital currency or fiat.
  • Purchasing from individuals: It is also an option to purchase bitcoins from private individuals. However, it should be noted that this route is not associated with a high level of security.
  • Bitcoin mining: Another way to obtain Bitcoins is through Bitcoin Mining, a process that demands special computers and an inexpensive energy source since this process is extremely energy-consuming.
    A Bitcoin miner who has found the correct hash receives a reward in the form of bitcoins. However, mining has become very difficult for individuals because it requires a lot of computing power and correspondingly high power consumption. One alternative to personal mining is a mining pool in which several users bundle their computing power.
Laptop with Bitcoin instrument details on Plus500 trade screen.

Illustrative prices.

Holding Bitcoin and What Is a Bitcoin Wallet?

The most crucial tool for buying and selling Bitcoin is called a "wallet." A digital wallet works similarly to a bank account, and you can use it to receive, manage and send Bitcoins. Some crypto platforms offer the option of storing bitcoins online. However, it is much safer to transfer purchased coins to your own wallet which you back up regularly.

The buyer copies and pastes the Bitcoin address into his wallet for payment to exchange Bitcoins or use them for purchases. Sometimes, a clickable Bitcoin address or a QR code is given instead, which the user scans with his mobile phone. Bitcoin owners have to keep in mind the risks that come with Bitcoin wallets.

Still, it is important to note that this type of storage is still susceptible to hacking attempts. As such, some may choose to go for cryptocurrency cold storage, which is essentially removing one's cryptocurrency keys from their connected wallets to make the storage more secure.

Bitcoin Trading Against USD

Unlike fiat currencies, Bitcoin is run through peer-to-peer technology. This means that there is no Central Bank or other authority to set the value of how much Bitcoin is worth. The value of the cryptocurrency is reflected entirely by how much buyers are willing to pay for Bitcoin and at what price sellers are willing to part with it.

As USD is the world's most widely used currency, some traders use the Bitcoin / USD pair (BTC/USD) extensively. Traders may refer to the Bitcoin chart for USD to see how the crypto is performing.

Charts are one way to see the price history of Bitcoin which can be used as part of the decision-making process during trading. There are several different kinds of charts that each offer different benefits to traders.

Buy & Sell Bitcoin: Trading Bitcoin CFDs with Plus500

Plus500 does not offer Bitcoins for sale. However, if you do not wish to own any Bitcoin but want to trade on the digital currency's price movements, you may consider Bitcoin CFDs. CFDs allow you to go long or short on Bitcoin. The abbreviation CFD stands for Contract for Difference. With CFDs, the trader does not become the owner of an underlying asset such as Bitcoin. Instead, the trader speculates on the price movement of the underlying asset and can trade on upward and falling crypto prices.

Steps to Trade Bitcoin CFDs

  • Log into the Plus500 platform
  • Search for "Bitcoin" in the search bar
  • Open a long or short position based on your trading strategy
  • Consider risk management tools such as "Close at Profit" or "Close at Loss" to manage your risk
  • Start trading!

Alternatively, if you want to test CFDs trading with Plus500 without committing your capital from the beginning, you can trade through Plus500's free-of-charge and unlimited Demo Account mode until you feel ready and confident enough to trade CFDs with real money.

iPhone with Bitcoin price chart

Illustrative prices.

Bitcoin Charts

Bitcoin Rate Chart

A Bitcoin rate chart lists BTC/USD prices for specific dates. Bitcoin's first price increase occurred in 2010 when the price for a single coin went from $0.0008 to $0.08.

Since then, there have been numerous price fluctuations for traders to measure, like for example, when Bitcoin neared $100k on 21 November 2024.

Traders can use Bitcoin rate charts to see historical rates for the cryptocurrency. This is one way to create forecasts and see historical data and trends.

Bitcoin Live Chart

Because Bitcoin is decentralized, it goes through periods of high volatility. To trade Bitcoin well, it's important to keep on top of how prices are moving. Many traders keep track of Bitcoin prices in real-time using live Bitcoin charts. This type of chart can also be used for detailed trading analysis.

Conclusion

In conclusion, Bitcoin has a colourful background as the world's first cryptocurrency. Trading Bitcoin by using CFDs is one way to potentially take advantage of the crypto's price movements without having to purchase the asset directly. Nevertheless, you should be aware that the value of Bitcoin CFDs is vulnerable to sharp changes due to unexpected events or changes in market sentiments. Therefore, you should ensure that you fully understand the risks before you start trading. In addition, you can refer to Plus500's Trading Academy, which includes Beginner's Guides, FAQs, a free eBook, and free how-to trading video guides and Webinars to sharpen your trading knowledge and utilise Plus500's free risk management tools to minimise potential losses.

Now that you know more about Bitcoin trading, it might be time to start trading Bitcoin CFDs with Plus500.

*Subject to operator availability.

FAQs

Bitcoin trading can be done on regular cryptocurrency exchanges or with Contracts for Difference (CFDs).

Trading Bitcoin CFDs can be done on platforms such as Plus500, offering leveraged trading on Bitcoin prices.

Politics such as cryptocurrency regulation, traders' sentiment, supply and demand, among other factors can shift Bitcoin prices.

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