Trading vs. Investing in Bitcoins: Which is Better?

There is a broad difference between trading and investing, albeit many of us often use both terms simultaneously. So, by the end of this article, you will have a clear understanding of what is the difference between trading and investing with respect to Bitcoin.

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Bitcoin Key Comparison Table:  

Bitcoin Trading


Bitcoin Investing

Can keep an eye on the price fluctuations of Bitcoin without needing to invest in it Outright ownership by investing in Bitcoin 
Can trade for long-term or short-term  Only long-term 
Easily trade the volatile price movements in both directions  Invest, hold, or close only long-term positions 
Utilize any trading strategy for short or long-term Only allows the long-term purchase and hold
Use leverage and margin to use the account equity at its maximum  Upfront requirement of the upright value of Bitcoin purchase 
Allow entry order, profit-limit orders, prevent losses and employ overall risk management procedures Close or buy long-term positions manually only

Bitcoin Trading

The most prominent difference between Bitcoin trading and investing is that while trading, it can be a long-term or short-term trade based on your point of view. If you purchase Bitcoin entirely, it will only be a long-term process, where you have to stay through the ups and downs of Bitcoin’s market value.

Traders will try to leverage these potential opportunities of volatility in Bitcoin’s price.

There are two divisions under which the Bitcoin analysts are categorized, based on: whether this crypto will rise or decline sharply in its value. 

Being a Bitcoin trader, you are winning either way: irrespective of whether the value goes up or down. You can make money in both directions, taking directional trading opportunities, whenever the need arises.

Owing to the above lines, you can do short-term Bitcoin trading when its market price keeps swinging up-and-down, rather than doing a long-term investment in this crypto at a certain value, hoping that its price will shoot up further.

Leverage and margin are two other ways in which you can do Bitcoin trading as they are more flexible than owning this crypto outright.   Considering the price of a Bitcoin at a given time period, owning even a Bitcoin could be unaffordably expensive; a bad idea. 

Conversely, Bitcoin trading with leverage lets you position your existence in the Bitcoin market even with minimal capital. But, it is also important to note that: with increased leverage, the risk of intense volatility also increases.

Lastly, Bitcoin trading actively stops losses, lets the trader use entry orders, profit-limit orders, and allows risk management procedures that are, otherwise, not possible in Bitcoin investment.

Long Term Bitcoin Investment 

Bitcoin, being one of the leading cryptocurrencies across the globe, benefits from the network of more people wanting to invest in it. Today, the worth of Bitcoin is no less than gold chunks on the digital platform.    In fact, now you can use it in the form of digital cash payment in online/offline marketplaces that accept Bitcoin payment. 

Many Bitcoin investors believe that this crypto will shoot up its value over long-term investment because of its fixed supply, unlike what it is with fiat currencies such as the Japanese yen or the U.S. dollar. While Bitcoin supply is capped under just 21 million coins, the central-bank-regulated fiat currencies are printed at the leading government’s will. Many investors are hopeful that Bitcoin value will appreciate as the value of fiat currencies depreciates.

People are optimistic that Bitcoin will be widely  used as digital cash in the long run and has the possibility to be the first-ever truly global cryptocurrency


You can do Bitcoin trading and investing side by side, but you should have a clear concept of both. The current market of Bitcoin cryptocurrency is the traders’ market. So, if you want to be an investor, be careful with building a favorable position with time, to avoid frequent price fluctuations.

Both trading and investing need perseverance and control over the emotional swings as both  are difficult. However, mastering any of the two, could be indeed rewarding and that’s for sure.

If you are hassling between whether to become a trader or investor, give a try to both. You can always convert your untimed short-term trade into long-term investment. Just remember that crypto trading is literally more difficult compared to investing. The latter is emotionally patience-testing as cryptocurrencies can and do lose their value by 25%, 50%, 80%, or sometimes up to 90% or above, on paper.

Bradley Wood is a freelance writer who lives in Pomona, Los Angeles. He is pursuing graduation from the University of California (UC). Bradley frequently contributes his high-quality articles in Academics and Education to our site to help students in their day-to-day life.