With bitcoin's price on the rise, more investors want to know how bitcoin trading works. There are a few ways to trade bitcoin, and you will need to consider the things that are important to your trading goals. Today, there are many bitcoin exchanges, and they offer some similar products.

Trading bitcoin with a centralized exchange is like trading stocks or CFDs. You will have to fund a trading account by sending the exchange bitcoin or some other currency they accept. Some even accept fiat currency.

Once you have an account, you will be able to trade bitcoin against many other assets, including other tokens, as well as stablecoins that mimic the price of many major fiat currencies. When you want to take your bitcoin out, the exchange will send the tokens to an address you select.

Another way to trade bitcoin is decentralized exchanges. Instead of trusting your private keys to an exchange a decentralized exchange allows you to trade on a peer-to-peer basis, so much of the counterparty risk is eliminated.

Centralized exchanges tend to offer leverage and futures contracts, while decentralized exchanges may have smaller tokens, and don't force you to trust anyone with your tokens. There are options for both kinds of exchanges in most nations.