The bitcoin exchange business is very competitive in nature, and every platform is looking to attract as many customers as possible. In order to do so, each bitcoin exchange has to come up with its own business model to cater to as many people as possible. In most cases, the novice users are the largest untapped market, and efforts are focused on making bitcoin more accessible.
To get the best exchange rates for yourself, follow these tips:
- Whenever you're looking to exchange bitcoin for physical currency or vice versa, make sure to check the current bitcoin price first. Over the past few years, bitcoin exchanges have started offering a "fixed" price per bitcoin, assuming you complete the transaction within a certain time frame. For example, when converting BTC into local currency, a user must complete the transfer within the next 15 minutes in order to get the current price. Failure to do so may result in a different price at the time of transaction, which can be either higher or lower.
- Keep a close eye on the bitcoin exchange rate for your local currency at all times, to maximize your profits and reduce your losses. Although Bitcoinwisdom.com is undoubtedly a favorite source of data, there are other similar sources such as Cryptrader.com and Coinmarketcap.com. Whichever tools you choose to use, they can aid you by giving you charts such as you would expect to see in regular fiat currency conversions, or just a flat BTC/local currency rate in digits.
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Keep in mind that there will usually be an exchange fee at some point during the transaction, so be sure to understand how much that will be. Some bitcoin exchange platforms take a small cut when your buy or sell order has been executed, whereas others will simply charge you more or pay you less overall. Plus, additional fees may be applicable when withdrawing your physical currency to a bank account or other payment method.
Exchange rates on bitcoin exchanges fluctuate constantly, in part attributable to free market supply and demand. In recent years, the overall trading volume of bitcoin has increased exponentially, with most of the trading taking place in China and the United States. Despite all of that, other local exchange rates around the world may go up when the major bitcoin markets are going down, or the other way around.