trading bitcoins in the Philippines

trading bitcoins in the Philippines

Initially, trading bitcoins in the Philippines was discouraged by the government. Recent developments indicate that the government is promoting the adoption of digital currency in the country. The Securities and Exchange Commission (SEC) released regulations to protect Filipino cryptocurrency traders and reduce risk of fraud. In fact, nowadays Bangko Sentral ng Pilipinas is registering and issuing licenses to cryptocurrency exchange services.

Read on to find out how to trade bitcoins in the Philippines, cryptocurrency trading strategies, some of the best bitcoin trading account providers and more.

Top 5 bitcoin trading account providers

1. eToro- Best for new traders

eToro is probably the biggest online trading platforms in the world offering a wide range of assets including cryptocurrencies. It is the best option for new crypto traders due to its easy to use platform and a mobile wallet for trading and receiving funds.

There is a special product on eToro dubbed as Copyportfolio that allow you to invest in most popular cryptocurrencies such as Bitcoins. This portfolio will help you avoid the sisks involved in investing in only a single type of cryptocurrency. However, the minimum investment required is on the higher side at $5000. An asset should have a minimum market capitalization of $1billion to be included in the Copyportfolio.

Recently eToro launched a proprietary crypto wallet that is available on both iOS and Android devices.  On the downside, it does not give you full control of your funds by issuing you with a private key. Instead, it only allows you to log into your eToro account.

Pros

• Offers unlimited demo account
• Impressive features
• Copyportfolio to diversify risks

Cons

• Limited crypto wallet

1. Cryptorocket- Offers generous leverage

Cryptorocket is a well-established crypto forex broker registered in Saint Vincent and the Grenadines. It offers the MetaTrader4 (MT4) and WebTrader trading platforms and generous leverage of up to 1:500. Also, the spreads are favorable to as low as 0.8 pips, which is below the industry’s average.

Founded in 2019, it comes with latest features and innovations to solve current issues. For instance, there is no minimum amount required, which means you can deposit as low as $1 (PHP 50). Also, the customer support is reliable and available 24/7.

Both the trading platforms are intuitive and easy to use. Unfortunately, Cryptorocket is not regulated like most of its competitors. However, it has put robust security measures to ensure your funds are protected.

Pros

• MetaTrader4 trading platform
• Easy to use
• Latest features

Cons

• Unregulated
• com- Best for all types of traders

Forex.com is an excellent choice for all traders because of the massive range of tradable crypto currencies and the extensive education and research tools offered. In addition, it is regulated in multiple countries such as the US, Canada, the UK, Australia, Japan and Singapore.

If you use technical analysis to predict crypto price movement, Forex.com gives you access to over 90 technical indicators. In addition, you will get a massive selection of education and research tools. For instance, there are live webinars and even advanced risk management courses.

The minimum amount required to open a Forex.com account is $50 (PHP 250). This is one of the few online brokers that are offering demo account. It is a great feature that will enable you to practice and test strategies before venturing to the live markets. However, it is only available for 30 days.

Pros

• Massive section of education and research tools
• Affordable initial minimum amount
• Regulated by top level authorities

Cons

• Limited demo account

1. Robinhood- Best free trading platform

Robinhood has gained popularity within a short time because it does not charge commissions. It is a great option if you don’t have a lot of money to invest. The overall simplicity makes it very easy to navigate and use.

It is has complied with Securities and Exchange Commission (SEC) trading standards and voluntarily participating in the Financial Industry Regulatory Authority (FINRA). In addition, it has partnered with Securities Investor Protection Corporation (SIPC) to protect clients’ funds.

The only issue with Robinhood is that it accepts limited payment methods. It does not accept methods such as credit cards or PayPal and you can only deposit funds through a wire transfer. The maximum amount you can deposit is $500,000 (PHP 25,327,500)

Pros

• Simple and easy to use
• Complied with trading regulations
• Zero commissions

Cons

• Limited payment methods

1. ph

Licensed by the Banglo Sentral ng Pilipinas (BSP), Coins.ph is considered to be the biggest bitcoin exchange site in Southeast Asia. It is a simple app that will allow you to buy, sell and receive bitcoins with just a few taps.

It is specifically designed for use in the Philippines and only support bitcoins and Philippines peso. Deposit fees will depend on the payment service you use. You can use 7-Eleven, M Luillier, GCash and Cebuana at no cost or Unionbank and incur a small fee. Withdrawal fees will also depend on the method you use. There are no withdrawal fees for banks in Metro Manila.

Pros

• Simple to use
• Support Philippine peso
• Licensed by SEC

Cons

• High withdrawal fees outside Manila

Conclusion

Bitcoin trading in the Philippines

The Philippines offers the perfect environment for the revolution of cryptocurrencies like bitcoins. For example, about 10 million Filipinos live and work outside the country. Their collective cash remittances account for almost 10% of the total GDP. Every month an average Filipino sends home around $200, which is charged between 4% and 10 % transaction fee. However, with crytocurrencies, the cost can be as low as 1%. This is the reason why the government legitimized cryptocurrencies as a remittance method.

Initially, through advisories and circulars, the Filipino government discouraged the use of digital currencies. Recently, the government introduced regulations that are aimed at regulating the cryptocurrency industry, promote innovation and safeguard Filipinos cryptocurrency traders.

The new regulations require virtual currency exchanges to register with Philippine’s central bank Bangko Sentral ng Pilipinas (BSP). Also, they have to follow the guidelines regarding the maintenance of records and make all the submissions required. Right now, there are over 34 licensed exchange sites in the country.

Due to these favorable regulations, Philippines have grown to become a major cryptocurrency hub. According to Coins.ph, which is the biggest cryppto exchange in Southeast Asia, 1 in every 10 adults in the Philippines uses bitcoins.

Select your crypto trading analysis strategy

The cryptocurrency market is highly volatile, which means that the currency value can go up and down quickly. That is why you need a trading strategy to avoid making losses. This is your plan of action that defines what parameters you should consider before executing a potential trade. Below are some of the elements you should consider when creating your strategy.

1. Technical analysis

This is the study of statistical trends that relies on historical price and data to predict future market trends. There are various technical tools you can use to measure and interpret market behavior to identify opportunities for trade.

There are three main types of trends. The uptrend is when the asset is moving up making higher highs and higher lows. In the downtrend, the asset is moving down and making lower highs and lower lows. Sideways trend shows the asset trading in a horizontal channel. In most cases, traders will use the terms bullish and bearish when referring to a trend. The term bearish means prices going down and is derived from the bear, who strikes downward with its paws. On the other hand, bullish comes from the bull who strikes up with its horns, indicating prices going high.

The movement of prices is not linear and it will face resistant while going up and support when moving down. Resistance is when the uptrend is expected to pause or rebound due to the concentration of sellers. Support is the point where the downtrend is expected to pause or rebound because of the concentration of buyers.

A broken resistance level becomes a support level. Usually, support is used as an entry point while resistance as the exit. Note that if there are strong trends, prices can go through both resistance and support without pausing or stopping.

Below as some of the common technical analysis tools in cryptocurrency

• Open high close low (OHLC) charts

Candlesticks are the bars displayed on a chart. The shape and color depends on the opening and closing prices and the day’s high and low. A bullish candle stick can be either green or white and the close is above the opening. In contrast, a bearish candlestick can be red or black and the close is below the opening.

Although candlestick charting technique was developed in Japan in the 18^th century to track rice prices, it is now a formidable technique in trading liquid assets. You can study the candlesticks individually (simple patterns) or as a group (complex patterns). The main purpose of studying candlesticks is to determine market trends.

• Simple moving average (SMA)

This a type of moving averages that shows the average closing price over a specified period. It is often used to determine the direction of a trend. If the small moving average is moving up, the trend is also moving up and vice versa.

• Bollinger bands

Bollinger bands illustrate a graphical band with an SMA in the middle. The width of the band indicates the volatility, which is the rate at which the price of an asset can go up or down. A higher volatility shows that the value of an asset can fluctuate rapidly by big margins.

1. Fundamental analysis

Fundamental analysis is a forecasting method that evaluates the economic, financial and other important variables to determine the asset’s intrinsic value. This is a bit different from technical analysis that majorly focuses on price movement.

Because other assets such as stocks have been traded for a long time, there is a significant amount of data that make fundamental analysis very easy. However, cryptocurrency trading is relatively new and most projects don’t have earning, revenue, profits or other metrics used to determine the value of an asset. This is why fundamental analysis is done from a slightly different angle of engaging in-depth research and using predictive logic. Some of the sources of information include project websites, whitepaper, press and community channels.

• Hybrid/dynamic analysis (mixed approach)

Both fundamental and technical analysis can be used in cryptocurrency trading though with some peculiarities. Before investing in any crypto coin, use fundamental analysis to identify if the coin is overpriced or have potential for growth. Also, technical indicators will help you to determine whether an asset is oversold or overbought. Technical analysis can come in handy, especially if you are day trader.

Crypto trading strategies

There are numerous strategies you can use when trading cryptocurrencies. The best trading strategy should be perfectly aligned to you objectives, available capital and risk appetite. Here are some of the most common strategies.

1. Day trading

Trading involves buying and selling an asset with the intention of making profit. Most traders have either long or short term trading goals, which is determined by how long you hold an asset. Day trading is a short-term goal that involves holding assets for just a few minutes or seconds. The high volatility and trading volume in cryptocurrencies creates a perfect environment for day trading because there are enough swings to make a decent profit.

The most common methods you can use to day trade are speculation and chart analysis. Speculation is when you believe certain events will affect the movement of prices. However, there is no guarantee that the price will either go up or down. You can also use chart analysis to study the price movement to predict which way it will go. Charts can allow you to look at the price movements every few hours, minutes and even seconds.

1. Scalping

Scalping in cryptocurrency is a trading strategy where you monitor the price movement to take advantage of the price fluctuations to make small profits. One important thing to consider when using this strategy is the trading and exchange fees involved. Since you will be making many back-to-back trades, remember that most brokers charge a small fee per trade. So, it is imperative to have the risk capital to cover the trading fees.

• Swing trading

While in day trading trades take place within a day, swing trading strategy is performed over a longer period like a week or more. It aims to seize bigger gains over longer time frames than scalping and day trading, making it an ideal strategy for beginners.

With the swing strategy, you will only need to concentrate on the daily and weekly charts. To make the best out of it, you should use both fundamental and technical analysis to determine whether the crypto asset will experience a price swing or has enough momentum to influence the trend.

Try bitcoin trading using eToro

Step 1: Create an account and verify

The process of creating an account on eToro is straightforward. You can use the email method where you will only be required to provide your name, phone number and create a password. Alternatively, you can register using your Facebook and Google accounts.

To start trading on the platform, you will be required to submit documents to verify your identity and address. Proof of identity documents can include passport or government issued ID while proof of address can consist of utility bills and bank statement of not more than six months.

Step 2: Deposit funds

The initial minimum deposit on eToro is $200 (PHP 10,153) while consecutive deposits are only $50 (PHP 2530).  Some of the supported payment methods include credit/debit card, wire transfer, PayPal, Skrill and Neteller. The maximum deposit amount per day is $10,000 (PHP 507,655)

Step 3: Buy bitcoin and trade

Once you have funded your account, you can start to buy and trade bitcoins. In the navigation bar, go to the ‘trade markets’ section and choose ‘crypto’ to access the cryptocurrencies available on the platform. Click the ‘buy’ button to modify some of the parameters.

Copytrading is one of the most prominent features on eToro that allows you to automatically replicate what experienced traders are doing in real-time. Most of the popular investors featured on the Editor’s Choice section have maintained a low-risk score and have shown gains recently. Alternatively, you can use the discovery tool to find more experienced traders to copy.

How trading and investing in Bitcoin is different from each other

Although they are different, it is possible to be both a trader and investor at the same time. Since both investment and trading have different aims, they follow different strategies. Another major difference is the timeframe the assets are held. Trading is associated with short to medium-term commitment to assets while investment implies long-term commitments.

In most cases, investors seek to build profit gradually by holding assets for longer period, commonly known as hodling in the crypto world. This strategy disregards the trends followed by traders. Even if the price drops, you will hold on your crypto asset and wait for the price to move up again.

Trading involves the pairing together of buyers and sellers with the focus of fast accumulation of wealth. In most cases, traders tends to keenly follow price charts and news of the related assets. As a trader, you will have to conduct thorough analyses to execute the best trades.

Although investing and trading are different, the outcomes are the same. Therefore, it is possible to be a crypto investor and trader at the same time. Trading involves less profits and losses while investing requires large capital and may cause significant losses.

Pros and cons of bitcoin trading

Pros

• Greater liquidity than other coins

Since bitcoin is the biggest digital currency by a significant margin, it has a greater liquidity compared to other cryptocurrencies. This allows you to retain its value when converting to fiat currencies such as Philippine pesos.

• Widely accepted as a payment method

In the Philippines, bitcoin is becoming a widely accepted method of payment. In fact, some outlets will allow to buy items using bitcoin units. This is the best option if you are looking for a more safe and affordable way to make and receive payments.

• International transactions easier than fiat currencies

It is very affordable to transact across international borders using bitcoins. Unlike other methods like wire transfer, there are no transactions fees involved. This is why bitcoins are becoming a preferred remittance by most Filipinos working abroad

• Lower transactions costs

Even when compared to other digital payments methods like PayPal and credit cards, transactions costs involving bitcoins are low. In most cases, it is uncommon for a bitcoin transaction to cost more than 1% while other methods the cost can be up to 3%.

Cons

• More exposed to scams and fraud

As the most popular cryptocurrency in the world, it has experienced a lot of scams, frauds and attacks. It involves small schemes to massive hack attacks where a lot of people have lost their crypto assets.

• Susceptible to high price volatility

While bitcoin is most liquid and easily exchanged digital currency, it is also susceptible to massive price changes over short periods.

Conclusion

Buying bitcoins in Philippines is easier than you thought. Right now there are numerous platforms where you can buy and trade bitcoins. Some platforms such as Coins.ph are even specifically designed for Filipino cryptocurrency traders.

Frequently asked questions 

1. Is it possible to buy less than 1 bitcoin?

Yes it is possible. A single bitcoin can be divided into 100,000,000 units which means you can buy a small fraction of the coin.

1. Can I store bitcoins on an exchange?

Although it is possible to store your bitcoins on an exchange, it is not advisable. This is because exchanges are susceptible to hackers and you will not be able to access your private keys. Therefore, the best option is to find a reliable and safe bitcoin wallet.

• Do I need an ID to buy bitcoins?

Nowadays there are exchange platforms that will allow you to buy bitcoins without going through a verification process. However, you will have to bear with the higher price tag.

1. What is the best and easiest way to buy bitcoins?

The best way to buy bitcoins is through a trusted broker. Most online brokers has easy to use platforms where you can buy bitcoin even using Philippines pesos.

1. Who control bitcoin prices?

Bitcoin price is determined by demand and supply in the cryptocurrency market. Although right now, there is limited supply of bitcoins in circulation, more coins are generated at predictable rates.