Bitcoin Trading Malaysia – A Beginner’s Guide

The price of Bitcoin has been on a roller coaster ride for years now. That may give long-term investors anxiety, but this volatility represents an opportunity for some traders. Trading successfully demands that you buy low and sell high, and Bitcoin’s up-and-down price swings provide a large number of dips and peaks.

If you want to get started with Bitcoin trading in Malaysia, this guide covers everything you need to know. We’ll review the top Bitcoin trading platforms, explain how the Bitcoin market works in Malaysia, and cover some basic strategies you can use to get started.

How to Trade Bitcoin in Malaysia in 3 Steps

Want to start trading Bitcoin right away? Follow these three steps to get started:

Step 1: Choose a Bitcoin Trading Platform

In order to start trading Bitcoin, you’ll need to find a Bitcoin trading platform that suits you. Choosing the best cryptocurrency broker or exchange is essential, since it controls what trading options are available to you, how much you’ll pay for trading, and what tools you’ll have at your disposal.

To help you out, we’ve reviewed the five best Bitcoin trading platforms for Maylasia residents in 2024.

Step 2: Learn How the Bitcoin Market Works in Malaysia

Before you jump straight into trading Bitcoin, it’s a good idea to understand how the market for this cryptocurrency works. Here, we’ll cover everything you need to know before trading Bitcoin in Malaysia.

What is Bitcoin?

Bitcoin was the world’s first digital currency, also known as a cryptocurrency. It was introduced in 2008 by an anonymous developer known as Satoshi Nakamoto. Since then, it has gone on to firmly establish itself as the world’s leading cryptocurrency.

Only 21 million Bitcoins will ever be created. The algorithm that controls the creation of Bitcoin also limits the quantity and rate of production. Thanks to this limitation, Bitcoin is considered a finite and valuable commodity like gold or crude oil.

The first Bitcoin exchange was established in 2010 and it enabled ordinary people to buy BTC using traditional currencies. At that time, 1 BTC was only worth 0.012 MYR ($0.003). In 2017, it almost reached the MYR87,000 ($20,000) mark.

The media has played a massive role in Bitcoin’s volatility. Every time there is a breaking story that affects the global economy, BTC’s price can shoot up or spiral downward. That has enabled a lot of traders and speculators to make immense profits from the crypto market.

Bitcoin is increasingly becoming a preferred payment method for international remittances, local money transfers and trading purposes. It is enjoying widespread popularity across Malaysia, despite the fact that it is not controlled by the government or banks like traditional currencies are.

What is Bitcoin trading?

While it originated as a decentralized payment method that’s not regulated by any bank or governing body, the past decade has seen Bitcoin become of significant interest to many traders and investors. This includes both short-term traders, who look to take advantage of Bitcoin’s notorious volatility to make quick gains, and long-term traders, who keep hold of Bitcoin with the aim of seeing its value rise significantly.

When it comes to trading, you can do this either on trading brokers, such as forex brokers, or cryptocurrency exchanges. Bitcoin works similar to forex trading, as it’s traded against other currencies. These can be fiat currencies like the US dollar, or other digital currencies such as Ethereum.

You can choose to either buy Bitcoin and purchase the underlying asset, or trade contacts for difference (CFDs). CFD trading allows you to trade without owning any Bitcoin, and it also allows you to trade with leverage, meaning you borrow capital from a broker to make larger trades.

Is Bitcoin Available in Malaysia?

Bitcoin is fully available in Malaysia. The government has taken a largely neutral approach to cryptocurrency trading and has already approved a handful of cryptocurrency exchanges to operate in the country.

In fact, a recent study showed that Malaysia is one of the countries with the highest interest in cryptocurrencies in the ASEAN region. The survey found out that 55% of Malaysians are familiar with blockchain technology, while 39% of them have used cryptocurrencies at some point.

What Regulations are in Place for Trading Bitcoin in Malaysia?

Malaysia is one of the latest countries that have begun to roll out a framework to control digital currencies. Now, cryptocurrencies are recognized as securities and regulated by the Securities Commission Malaysia (SCM).

Cryptocurrency regulations were introduced around January 2019. The government required crypto exchanges and initial coin offerings (ICOs) to register with SCM and other relevant agencies. Failing to do so is punishable by a 10-year jail sentence and a maximum of MYR 2.4 million in fines.

The government has clarified that Bitcoin should be treated as a security and not a legal tender. However, you can still use it as a means of payment to buy goods and services. The move to regulate digital currencies is aimed at boosting the adoption of cryptocurrencies in the country.

What Risks are Involved with Bitcoin Trading in Malaysia?

Digital currencies are considered to be the future of financial exchange and transactions. Despite Bitcoin’s increased popularity across Malaysia, there are some still serious risks that you should know before trying out cryptocurrency trading.

• Volatility – The biggest risk to trading Bitcoin in Malaysia is that the price of this currency can rise and fall quickly and without warning. As an example, in early 2017, 1 BTC was worth around MYR 2,800 ($700). It climbed to MYR 80,000 ($20,000) by the end of 2017, then precipitously dropped in value to just MYR 24,000 ($6000) in a matter of months. On a day to day basis, this volatility can make Bitcoin trading very stressful. If the price of Bitcoin drops after your buy it, you will either have to hold onto it until the price rises again—which could take months or years—or you will have to sell it for a loss. The Bitcoin market is very unpredictable and it is difficult to know if you will see a return on your investment.
• Security – Bitcoin is a digital coin and as such your currency isn’t held at highly secure banks. Instead, it’s held inside Bitcoin wallets. These are highly secure in that only you have the encryption key to move coins in and out of your wallet. However, you have to be constantly aware of cyber attacks that could expose your Bitcoin wallet. A phishing attack could steal your encryption key, for example, and there’s no way to recover lost or stolen Bitcoins. When using a cryptocurrency exchange or broker, make sure that your account is highly secure.

Can I Buy Bitcoin from an ATM in Malaysia?

It is possible to obtain Bitcoins using cash from an automated teller machine (ATM) in Malaysia. At the moment, there are reportedly 10 Bitcoin ATMs in the country, with six of them located in Kuala Lumpur.

The advantage of buying Bitcoins through the ATM is that you will not be required to go through the verification process. That means you have the option of staying mostly anonymous when exchanging cash for Bitcoin. On the downside, you should be prepared to incur high transaction fees that range between 5% and 10% when using a Bitcoin ATM.

How Do Trading and Investing in Bitcoin Differ from Each Other?

There is a big difference between investing and trading Bitcoins.

When you invest in Bitcoin, you’re in holding it for the long-haul. No matter how the price changes in the market, Bitcoin investors do not give up on their investment. Instead, they hold the assets until there is a perfect moment to sell. Investing in Bitcoin is best if you firmly believe in the potential for digital currencies and believe that, no matter the short-term fluctuations, the price of Bitcoin will steadily rise in the long run.

On the contrary, Bitcoin trading is a short-term endeavor. Bitcoin traders only hold the currency for a short period, on the order of a few minutes to a few days, in order to take advantage of small price movements. Bitcoin’s roller-coaster price fluctuations make it perfect for trading because there are so many dips and peaks to profit off of, although this also means there is increased risk.

Step 3: Choose a Bitcoin Trading Strategy

The key to turning a profit from Bitcoin trading is to have a winning strategy and to stick to it. Your trading strategy is a methodology that you use when identifying entry and exit points.

There are many Bitcoin trading strategies, and you need to choose one that aligns to your objectives, available capital and appetite for risk . Below are some of the most common strategies that you can consider using.

Day Trading

Day trading involves keeping positions open for just a number of minutes or hours, and rarely more than a day. The aim of Bitcoin day trading is to make small but frequent gains when the price of Bitcoin fluctuates throughout the trading day. Bitcoin is often considered as an asset that’s well suited to day trading due to its volatility.

Scalping

Scalping is a short-term, yet extremely intense trading strategy. The goal here is to earn small profits by initiating trades and then closing them very quickly. Scalpers aim to make money off the price changes that happen in the span of seconds, rather than hours or days. Since you will be entering and exiting the market regularly, it is imperative to consider the spreads per Bitcoin trade that your broker will charge you.

Swing Trading

Swing trading is another short-term strategy, but one that operates on the order of days to weeks. With swing trading, your goal is to look for changes in momentum and act on them. When Bitcoin begins to rebound after a dip, for example, you can initiate a swing trade to profit from the early part of the ensuing rise when the upward price momentum is strongest.

Holding

Also known as HODLing in the cryptocurrency community, this is perhaps the most common long-term Bitcoin trading strategy. It involves maintaining a long position with the hope that the price will continue to rise as the demand for this coin increases and supply diminishes as mining gets more difficult. Holding as a trading strategy is very similar to Bitcoin investing.

Beware that Bitcoin is highly volatile, so this strategy could lead to significant losses if you are not careful. It’s a good idea to set a maximum amount that you’re willing to lose and then commit to selling some or all of your Bitcoin at that lower price if the currency drops.

Bitcoin Breakout

This strategy involves entering the market at key points and riding the trend from start to finish. It is based on the idea that once the market breaks through major resistance and support levels, significant volatility will occur.

To trade a Bitcoin breakout, you must first identify key price levels. You’ll need to rely heavily on technical charts for this, as well as to set price targets so you know when to exit your trade.

Step 4: Open a Bitcoin Trade

Now you’re ready to start trading Bitcoin.

Select one of the top brokers listed above and execute a BTC trade.

Account opening is usually a straightforward process.

Pros and Cons of Bitcoin Trading

Conclusion

Bitcoin’s volatile price makes it a target for short-term traders who see opportunity in roller coaster price action, while its global popularity as a finite cryptocurrency also makes it an asset of interest to long-term investors. However, as a highly volatile asset, you should make sure you understand the market, know the risks and develop a strategy before putting your money on the line.

Resources

To ensure we bring you the most reliable and accurate information possible, our writers use primary sources to support their content. These include studies, government resources and commentary from industry experts.

• Bank Negara Malaysia. “Statement on Bitcoin.” https://www.bnm.gov.my/index.php?ch=en_announcement&pg=en_announcement&ac=49&lang=en. Accessed June 8, 2020.
• Bank Negara Malaysia. “Digital Currency.” https://www.bnm.gov.my/index.php?ch=en_digital_currency&lang=en. Accessed June 8, 2020.
• Securities Commission Malaysia. “Media Statement on Initial Coin Offerings.” https://www.sc.com.my/resources/media-releases-and-announcements/media-statement-on-initial-coin-offerings. Accessed June 8, 2020.

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