Cryptocurrency is a digital currency that can be used to buy goods online. Unlike traditional currencies (such as dollars, euros, or pounds), these digital assets are not issued by any government and are not connected to any bank. Because they are digital, these currencies can be traded anywhere in the world!
Trading cryptocurrency is just like trading stocks, bonds, or commodities on a stock market. The crypto market represents a massive untapped pool of digital wealth; trading in digital currencies has the potential to make many investors quite wealthy. But before we get to that, it’s important to learn a little bit about how these currencies work, and what are some of the most popular cryptos today:
How Crypto Works
Cryptocurrency is a new way to make financial transactions; it’s not quite like cash. It uses encryption and decentralized networks such as the internet to transfer money, allowing users to send and receive funds electronically. For example, bitcoin is an entirely digital currency that relies on a public ledger. People use bitcoin to buy things online and many vendors accept cryptocurrency in addition to cash.
When diving into the world of cryptocurrency trading, selecting the right wallet is paramount. A secure and user-friendly option can make all the difference in safeguarding your digital assets. Using a wallet like ledger nano s can be a great solution, as these tend to have encrypted hardware, which aids in the protection of your private keys.
Popular Cryptocurrencies
Cryptocurrencies are all the rage right now, and with good reason – they are exciting, innovative, and provide a fantastic investment opportunity. Yet, cryptocurrencies are also extremely volatile, and their massive price swings make investing sound quite risky. But don’t ditch your day job just yet; there are still plenty of ways you can get involved. With a little research, you can learn more about cryptocurrencies and decide which ones might be right for you!
To better grasp how cryptocurrencies work and which cryptos are worth your time, here’s a quick primer on some of the most popular cryptocurrencies:
- Bitcoin
Bitcoin was the first cryptocurrency, and is still the most popular today. Bitcoin enthusiasts tout cryptocurrency as the future of all money, with the power to decentralize the world’s financial system. Bitcoin works by using cryptographic algorithms to control the creation and transfer of money making. It is anonymous, secure, and decentralized, and could be traded on platforms like Bitcoin Apex. The currency’s value fluctuates based on the demand from buyers and sellers. As of November 2018, one bitcoin can be exchanged for around $6200.
- Ethereum
Ethereum is the second-most popular cryptocurrency, and its popularity has been on the rise. Ethereum uses blockchain technology to create an internet of value, where anything of value can be tracked and stored.
Beginning your Trading Journey
Now that you have some idea about cryptocurrency, we can get to the meat of the matter–trading. Although crypto trading has a number of benefits, making your first trade in this market may not be the easiest idea in the world, especially if you haven’t studied the frequent rise and fall of various cryptocurrencies. This is where a Crypto blog in Nigeria (or elsewhere) could help you to acquire information regarding how to start investing in crypto, track volatile trends, learn about decentralised crypto wallets, when to sell your crypto assets, and more. When it comes to blockchain investment, analysing gathered information to develop an investment strategy can increase profit margin and mitigate losses.
How Do I Begin Trading in Cryptocurrency
Make a Brokerage Account
Making cryptocurrency brokerage accounts is a straightforward process – you simply create an account on an online crypto exchange, follow a few basic steps, and place your trades. While these brokerage accounts do not necessarily require advanced trading knowledge or experience, some advanced traders may benefit from utilizing other crypto brokerage accounts or trading platform services.
To trade cryptocurrency, you’ll need to open a brokerage account. Most of them require personal information such as a Social Security number and driver’s license number.
Fund Your Account
The cryptocurrency market has exploded in recent years, and many people now consider investing in it. But before you begin trading, you’ll need to set up an account through which to make money, fund your account with a reputable broker (like Coinbase Kraken or Gemini), then choose a minimum of 5 cryptocurrencies to trade on an exchange.
Pick a Crypto to Invest In
Cryptocurrency has made its way into mainstream media, with virtual currencies being the most common investment for people getting into cryptocurrencies. Bitcoin, Litecoin, and Ethereum are all popular cryptocurrencies; each runs on its own mining network due to how it handles transactions.
Choose a Strategy
Although trading in crypto is a lucrative way to make money, it can quickly become complicated. It’s quite easy to lose money in the crypto market. Fortunately, there are ways to make trading easier, including by figuring out a strategy that works for you. Of course, developing your own strategy when you’re a beginner is not the easiest thing to do, so, you could do your groundwork with the help of information that you can find at 2dots.com and similar sites on the web. By taking in the inputs through such websites, you could create functional strategies that are aided by AI-based predictions. This can help ensure that you are trading at the right times, and that you aren’t trading beyond your current means.
Automated Crypto-Trading
Trading in the digital market can be intimidating at first, but there are a lot of ways to get started: there’s automated crypto trading, which you may be able to do on your own; there are bittrex trading bots; and trading strategies, which use algorithms to automate trading for you. If you are new to this world, consider a course like Crypto Trading University or Cryptocurrency Trading.
Once You’ve Invested
So, you’ve done all the above, now what? How do you go about actually seeing the profits of your investments? Well, there are two main routes you can take – you can buy and hold, or you can trade. Let’s take a closer look at both:
- Buy and Hold – buying and holding cryptocurrency means you buy some amount of currency, and then hold on to it. You don’t trade it, you don’t sell it, you don’t do anything with it. You just keep it and as long as you can hold onto it you know its value will increase.
- Trade – A more active option while dealing in the crypto market is trading. This concept is the same as the real-world stock exchange. Exchanges will charge you a fee for doing this, which normally costs around 0.1% for each trade.
As long as you stick to these steps, and invest prudently, the cryptocurrency market will be a safe trading haven for you.