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What Are The Pros and Cons of Day Trading Bitcoin?

Bitcoin is the world’s biggest cryptocurrency and an asset primarily seen as a long-term investment, yet day traders are increasingly turning to Bitcoin over traditional assets. High liquidity and volatility, especially in the short-term price, make Bitcoin a day trader’s dream. However, like most things in the investment world, day trading Bitcoin comes with some massive potential upsides but equally as many pitfalls.

There was a time when talk about Bitcoin was confined to internet chat rooms and forums that mathematicians frequented. Bitcoin is far more mainstream these days; colleagues often discuss the currency’s price movements near the office water fountain! Established companies like Microsoft and Starbucks openly accept Bitcoin, and it seems a new Bitcoin sportsbook appears on a monthly basis. Anyone who thought Bitcoin was a flash in the pan was wrongly mistaken.

The Positives of Day Trading Bitcoin

Day traders rely on short-term price fluctuations on the assets they trade. This volatility, combined with the instrument’s liquidity, is something Bitcoin has in abundance. Bitcoin’s infamous volatility often leads to rapid price movements, which, if correctly predicted, results in substantial profits. If you are a trader who thrives in fast-paced, high-risk markets, Bitcoin has your name written all over it.

In addition to the potential for high profits, Bitcoin is one of the most liquid assets globally. Seasoned investors and newcomers alike trade Bitcoin 24 hours per day, seven days per week; the cryptocurrency market never truly sleeps. All of the liquidity Bitcoin enjoys means it is far less likely you will be caught in a position where you cannot buy or sell. Either of those scenarios has the potential to be disastrous to a day trader’s bankroll if they happen.

Unlike some traditional financial markets, there are no shorting restrictions on Bitcoin or other cryptocurrencies. It is easy to take short positions, adding an element of flexibility to a day trader’s strategies.

Those positives make Bitcoin an attractive proposition for a day trader looking to make their mark on the world. However, all successful traders weigh the cons and pros before deciding to put their hard-earned cash on the line.

The Negative of Day Trading Bitcoin

The expression “what goes up must come down” perfectly describes the positives and negatives of Bitcoin day trading. The positives you read about above may have you salivating at the prospect of becoming a Bitcoin day trader, but ensure you arm yourself with the potential downsides to doing so.

Although the potential for life-changing profit exists, day trading Bitcoin carries monumental risks. The exact price volatility can result in huge gains and can also work against you, resulting in steep financial setbacks. Bitcoin’s price is known for swinging dramatically one way and then the other, sometimes over the course of a few minutes. Be on the wrong side of one of those swings, and you can see your profit for the day, week, month, or even year wiped out before your eyes. Losses can be catastrophic if you use leverage while trading; you have been warned.

Regulatory uncertainty is another significant negative attached to Bitcoin day trading and investment as a whole. The recent G20 summit in New Delhi, India, saw several world leaders discuss a global regulation of all cryptocurrencies. Although challenging to adopt, governments could put measures in place that make trading Bitcoin illegal or at least make it not financially viable. Trading traditional assets, instruments, and currencies has happened for decades and is going nowhere.

Day trading can be a stressful endeavour due to the way prices rise and fall throughout the day, but Bitcoin trading amplifies this. Watching your account balance increase and decrease by huge sums can lead to anxiety, so Bitcoin trading is not for the faint-hearted. Any trader will tell you that not having your emotions under control can have a detrimental effect on your decision-making, thus exacerbating the issue. Matters can rapidly spiral out of control, even for the most hardy of traders.

Then there is time consumption to consider. Day traders employ different strategies. Some only spend a couple of hours per day plying their trade before heading off and enjoying some well-deserved time away from their computers. However, Bitcoin trading requires constant supervision and active decision-making throughout the day. It can be tempting to trade for more extended hours because of the wild fluctuations in Bitcoin’s price, leading to long, arduous spells staring at a computer monitor, which is probably not what you got into this industry for!


Day trading Bitcoin has the potential to be one of the most lucrative projects you undertake, and you are all but guaranteed an exhilarating ride whenever you have an open trade, but it is not for everyone.

Ridiculously high risk often leads to stress and has the potential to decimate your bankroll or even leave you in the red to a significant degree. There is also plenty of regulatory uncertainty surrounding not only Bitcoin but the entire cryptocurrency as a whole.

Like any investment of any kind, it is vital that you thoroughly research Bitcoin to the nth degree. You must know every minute detail of what makes this asset tick, what external factors influence its price movement, and have a contingency plan if everything goes spectacularly wrong.

Opening a demo account with an established cryptocurrency exchange is worthwhile, and using “play money” to test your strategies. Test and refine your strategy, experience the fast-paced market, and prove to yourself, without a doubt, that you can be a profitable Bitcoin trader. Then, and only then, should you consider parting with your money and trading Bitcoin for real. Start slow and small, and you just might make it in the cut-throat world of Bitcoin trading.