When it comes to crypto trading, experts usually advise you to commence your trading journey with Bitcoin. Being the #1 crypto, Bitcoin certainly commands the highest price – a major reason why several new crypto traders are apprehensive of investing in or trading with Bitcoin. But what most of them are unaware of is that you don’t necessarily need to purchase 1 BTC to invest in Bitcoin. You can always start your crypto investment journey with a fraction of Bitcoin. And this is where you need to know about Satoshi or Sat in Bitcoin or crypto trading. Read more multibank.io.
For those new to crypto trading must know about Sat or Satoshi – crypto trading doesn’t need to be a highly expensive affair always- rather you could have an affordable start if you know the right strategy.
Satoshi in crypto trading
Satoshi refers to the lowest denomination of Bitcoin cryptocurrency. For example, 1 BTC is equivalent to 100 million Sats or Satoshis. It has been named after the great Satoshi Nakamoto, the legendary and anonymous founder of Bitcoin. It was Nakamoto who was the first to bring the dream of electronic P2P cash to reality. Hence, the denomination of Bitcoin has been named after his name as a homage to the visionary innovator.
So, when you will buy a fraction of BTC, the ideal term is to say that you are buying Sats or Satoshis. It’s because a fraction of Bitcoin is part of it and not a whole Bitcoin. So, unless you are buying 100 million Sats, you cannot technically say that you are buying Bitcoin. As Sats are Bitcoin denominations, the value of Sats is determined by the present price of Bitcoin. As of September 2022, BTC price is around $19,472.60. So, the current value of Sats would be determined based on that price.
Why do you need Sats in trading?
There are various reasons why you would need Sats in crypto trading.
To participate in BTC bandwagon
When you are looking forward to a stellar investment and trading portfolio in the crypto sphere, you should start with BTC investment. Bitcoin is comparatively more stable compared to other coins and tokens and always assures more stability in the crypto trading and investing scene. Besides, being the #1 crypto, BTC is the most popular and most in-demand cryptocurrency. The coin has shown exponential growth over the years and is poised to hit the $100,000 mark by the last lap of 2022.
Bottom line is, Bitcoin enjoys high market value and strong liquidity- the two most vital factors necessary for successful crypto trading experience. But, the glitch is, being the biggest crypto, Bitcoin demands a high entry-point. It can be expensive to shell out around $20,000 at one go for 1 BTC for a new investor or trader. However, if 1 BTC seems to be too pricey for you, you can always count on Sats or Satoshis. Being a fraction of Bitcoin, they can offer a more economical entry point for Bitcoin investors and traders.
To buy other cryptos
You can’t always use fiat money to purchase cryptos for crypto trading. Some of the crypto trading platforms only accept crypto-based payments for crypto purchase. Being the #1 cryptocurrency, Bitcoin is always the universally-accepted crypto payment method for crypto purchase. So, even if you don’t want to invest in Bitcoin, you can still count Sats as the currency for purchasing other cryptos.
So, let’s say, you wish to buy ETH. Now, your chosen exchange is offering ETH at around 0.5 Sats. It implies, you will be able to purchase at least 1 ETH with .05 BTC or 3 million Satoshis. Now, say, if you wish to purchase 20 ETH, you will have to invest .05 Sats multiplied by 20.
Put simply, you will need Sats no matter whichever crypto you wish to trade in the crypto trading zone.
How will you buy Satoshis?
So, how would you purchase Satoshis? Well, there are various ways to buy Sats for crypto trading.
The most common way to purchase Sats for crypto trading or investing is through credit card. Cards assure super-fast transactions that will get your Sats delivered to your wallet in just seconds. But, on the other hand, wire transfer and bank transfer can take up to a week. However, there is a catch, card transactions often come with way higher fees in comparison to other modes of payment. Additionally, if you are dealing with an international exchange that is not located in your country, you will need to pay for foreign transaction charges. Read more about trade crypto with a leverage
So, if you are in a rush- if the market is excessively fluctuating, then you can buy Sats with a credit card. But, if you think the market is on a flat mode right and you are in no rush, then, go for wire transfer or bank transfer.
However, make sure to carry a thorough comparative study on the exchange from where you will buy the Sats for crypto trading. Make a shortlist of 5-6 exchanges before zeroing on the final one. The one you choose should be backed by advanced security features and a user-friendly crypto trading platform. Then, the crypto exchange should also assure affordable transaction fees. Make sure the platform charges no more than 2 percent in transaction fees for credit card purchases.
You can either trade or HODL the purchased Sats. A smarter idea would be to spend some for crypto trading and keep the rest for HODLing. But whatever you decide to do with the purchased cryptos, do not store the Sats in your exchange wallet for long. Crypto exchanges are often attacked by hackers. Use a leading hot online wallet for the Sats that you wish to deposit for crypto trading. The rest of the fund must be stored in a cold offline wallet that is beyond the reach of online hackers.
You can also deploy your Sats to staking. You can use them to buy a PoS coin and then invest the crypto holdings to PoS blockchain for staking.