Who knew that an obscure paper Bitcoin: A Peer-to-Peer Electronic Cash System published online would lead to a whole new industry and economics? Leading the cryptocurrency revolution, there are hundreds of trading apps today that allow people to trade Bitcoin (BTC). Users often find it difficult to shortlist the ideal app for trading Bitcoin. This guide will list some of the best Bitcoin trading apps in 2021 in terms of several parameters such as ease of use, security and user interface so that you can select an app to trade Bitcoin.
Our List of The Top Bitcoin Trading Apps
Scroll down to see our list of the best Bitcoin trading apps in 2021 along with various features and advantages.
What is a Bitcoin Trading App?
As a decentralised financial system, Bitcoin offers numerous benefits over traditional fiat and its meteoric rise makes it a very attractive asset to trade and increase wealth.
There are complete apps created around this phenomenon that enable users to buy Bitcoin and sell it. Typically, users buy when they feel the price is low and sell it when high, pocketing the profits. These apps also work as secure Bitcoin wallets, letting users store their crypto wealth for longer terms.
How do Bitcoin Trading Apps Work?
Bitcoin trading apps are pieces of software that create a front-end user interface for people to buy, sell and trade Bitcoin, while all the complex tasks associated with the different order books, balancing and trade matching goes on in the background.
To start, people should first go to the preferred Bitcoin trading app website and download the latest version. People using Android or Apple devices can use their relevant app stores to search for the apps.
Getting registered on the app is the next step. This typically involves creating usernames and deciding on the passwords. Depending on the app, more information might be required by the application, such as a mobile number and an email address. This extra information is used to verify the user not only at the registration level but in compliance with KYC and AML regulations.
Although KYC and AML checks are mandatory by some apps, the level of details required varies from one to another. Bitcoin trading apps can also ask for documentation related to the checks during registration or after. A few even create different levels of KYCs, asking for more financial and personal data as the trader’s volume expands. The different types of KYCs are dependant on local laws and regulations.
Some Bitcoin trading apps require no KYC/AML checks at all. Since the checks can be a bit time taking and create delays in the ability to trade while the submission is verified, the option of using a Bitcoin trading app that requires no regulatory checks can be appealing. There is a major downside to it though. Unregistered trading apps can be frauds as there is no legal existence of the app developing firm and the team behind it is usually untraceable.
When you are registered and able to trade, you should first fund your trading app account. The funding process varies from app to app, but the basic method is to navigate to your wallet in your app. There should be a deposit option that you can select. The app will give you a string of characters that is your public key. This is like your account number for the Bitcoin wallet on the app. The apps may also present you with a QR code as an easy option to scan with your other Bitcoin wallet. Go to the wallet that holds your Bitcoins and either enter the public address or scan the QR code and enter the amount of Bitcoin you want to send over to the trading app.
Be careful in selecting the wallet. Bitcoin trading apps may support multiple cryptocurrencies and each crypto will have its dedicated wallet with a unique public key. Sending Bitcoin to another crypto wallet may result in your cryptocurrency being lost forever.
With the Bitcoin trading app wallet funded, users can begin purchasing Bitcoin as well as selling. Each app is designed for a specific target market and there might be more than one buy/sell order type.
Every input has an output and funding your Bitcoin trading apps means you can withdraw your funds too. Just like funding, you will need to go to your wallet settings in the trading app and select a withdraw option. Users will be presented with two fields of data to enter: the address of the recipient wallet and the quantity of Bitcoin to be sent. Again, we must stress that users should be careful in entering the right wallet address as sending to the wrong one means permanent loss of assets.
Some Bitcoin trading apps also support fiat transfers, meaning traders can deposit and withdraw fiat currencies. This is subject to the app being registered according to banking laws and supporting the local bank of the user.
Key Things to Consider when Choosing the Best Bitcoin Trading App
With so many choices in the market, it can be very difficult to decide which Bitcoin trading app to use for buying and selling. The selection boils down to a few key parameters that have to be kept in mind:
- Security and Reliability: With its immense value rise over the years, Bitcoin is not only the preferred choice of crypto traders but also hackers and digital thieves too. Make sure that the trading app you select has robust security and the team is reliable.
- Trading Pairs: To trade Bitcoin, there has to be an alternative asset. More trading pair options would give users more chances to trade and increase profits. Furthermore, if the app supports crypto to stablecoins or fiat trading pairs, this can be a bonus as it helps in hedging investments in case of a price plunge.
- Liquidity: Good trading pairs mean nothing if a trader cannot get his or her order executed. Lack of liquidity can result in the order remaining unexecuted while Bitcoin keeps falling or rising, robbing the trader of the opportunity to make profits or mitigate losses.
- Fee Structure: Bitcoin trading apps make money by charging different kinds of fees. These are in the shape of deposit/withdrawal and trading charges. The amount and frequency of your trading will determine if the fees are worth it or not.
- KYC/AML: Any well-regulated Bitcoin trading app will most definitely ask for KYC documentation in one form or another. This can be as easy as sending a scanned copy of proof of residence to as complex as asking for an income source. Though the developers do strive to strike a balance, this can be very cumbersome for light traders.
Pros and Cons of Using Bitcoin Trading Apps
Bitcoin trading apps give people the perfect option to buy and sell the largest cryptocurrency in the world easily. As such, selecting a reliable and trustworthy app that has ease of trading, yet offers good services can make all the difference. With the app’s operations explained in this guide, along with their functions, features, and points of consideration detailed, users should be able to shortlist the best Bitcoin trading apps in 2021.
Frequently Asked Questions
Anyone can trade bitcoins. If you find your trading app too complex, try switching over to another with an easier interface.
Bitcoin trading apps have dedicated wallets that need to be funded to trade.
Your trading app is a decentralised trading app (dApp) and uses smart contracts to connect with your wallet directly.
Every trading app has a minimum amount of withdrawal limit. Try withdrawing a greater amount.
Your requested price for Bitcoin is not available in the order book. Try waiting or changing your quoted price.
Try to contact the app customer services. This can be due to a variety of reasons such as outdated or invalid documents or your locality may not be supported.
Your KYC verification is in process. This can take anywhere from a few hours to days.
Trading apps always keep a small number of cryptocurrencies in the users’ wallets to cover any fee or charges for trading or withdrawals/deposits.