Cryptocurrency used to be something known only to niche tech fans. Now, it has piqued the general population’s interest as more and more become intrigued by the process involved with its production. Bitcoin is the most popular cryptocurrency in the market today, followed by Ethereum, Monero, and Litecoin.
This type of money is produced through mining. The process entails having your computer solve a complex mathematical equation and gain BTC as compensation for your efforts. A more straightforward way to earn cryptocurrency is through trading. With this, you buy Bitcoin or other currency using traditional cash during times when the value is low and sell them for a much higher price.
Here are a few reasons why cryptocurrency trading is becoming a big thing:
- Take Advantage of Cryptocurrency’s Volatility
While most people may see cryptocurrency’s volatility as an unpleasant characteristic, you can look at it in a positive light. Cryptocurrency trading is exciting because of the possibility of buying stocks at super low prices as you wait for their values to soar to new heights within a short period. Bitcoin is particularly volatile, while other cryptocurrencies are relatively more stable but still unpredictable, unlike traditional stock.
Before you dive into the world of cryptocurrency trading, you should do your research and develop a risk management strategy to mitigate the hazards involved in this type of venture. Check out these 23 great cryptocurrency trading tips to help you succeed.
- Have Various Trading Options
In connection to cryptocurrency’s volatility, the price of Bitcoins and other altcoins are constantly moving daily, as rapid as per hour. This characteristic allows you the chance to choose the trading strategy you want. Some people are more comfortable with day trading while others opt to wait for an extended period.
These are the four prominent types of cryptocurrency trading:
- Day Trading – With day trading, you must track short-term opportunities and buy the cryptocurrency at the lowest price for the day. Then, you sell before the trading day ends at the highest possible value.
- Scalping – This one is similar to day trading, except it’s more aggressive. Scalping entails trading frequently throughout the day on slight price movements. It gives you a smaller margin of profits, albeit more continuous. It’s the perfect setup for people who don’t want to wait for a substantial increase in Bitcoin or Ethereum’s value.
- Swing Trading – For this method, you analyze the trends as well as estimate when the next low and high will arrive. You’ll need a strong gut instinct for this type since you must ride the market momentum, which can be challenging to determine.
- Automated Trading – It’s passive cryptocurrency trading. You can use software to set your buying and selling price, then the robot will trade on your behalf.
- Trade Any Time of the Day
Because of its universal nature, you can do cryptocurrency trading at any time of the day. The market is available 24/7 since there isn’t one governing body that monitors it. Transactions are done between two individuals. This means that you can trade with someone on the other end of the world as long as they are still awake. The only downtime, perhaps, is when there are infrastructural updates on the exchanges. Even then, it’s only for a few hours at most.
If you want to start cryptocurrency trading today, here are the top exchanges you should try:
- Bittrex – Bittrex is one of the top cryptocurrency exchanges in the market. They support several altcoins to offer numerous trading options to users. Withdrawals are reportedly 100 percent free with the price being charged only with the transaction fee noted in the blockchain of the cryptocurrency.
- Coinbase – Coinbase has a lot of users, but it only supports major cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. The platform is one of the first to accept credit cards as payment methods.
- Kraken – With Kraken, you can buy and sell altcoins as well as trade between cryptocurrencies, US dollars, British pounds, and Japanese yen. This channel also has several features, such as margin trading and accounts leveraging.
- Send Payment to Anyone, Anywhere
As mentioned above, cryptocurrency trading is an excellent way to earn Bitcoin or Ethereum instead of mining, which may not be worth the time and effort you spend for it. You can use the digital money you obtain through this venture as payment to online merchants, which is way more straightforward.
Some of the more popular cryptocurrencies include:
- Bitcoin (BTC) – As the first cryptocurrency ever introduced to the general public, it’s no wonder that Bitcoin serves as a pioneer of the industry and is deemed as the king of cryptocurrencies.
- Ethereum (ETH) – This one was developed as an alternative to Bitcoin. Plus, its source code allowed the execution of Smart-Contracts, which enables credible transactions to push through without the help of third parties.
- Monero (XMR) – It’s a relatively new cryptocurrency launched in April 2014. Monero had stable value until 2017, where cryptocurrency penetrated the mainstream market. One of its distinguishing characteristics is the elevated level of security and privacy generated by its source code.
- Litecoin (LTC) – created by a former Google employee, LTC offers its users a platform with low processing fees and quick transactions. It was one of the top cryptocurrencies to watch for in 2019.
- Ripple (XRP) – This controversial cryptocurrency operates with a centralized private blockchain technology, which some criticize as opposite of the digital money’s vision.
- Transparency with Privacy
One primary advantage of cryptocurrency is that your transactions are recorded on a public ledger. This translates into trading where your contact details can be viewed by everyone on a public ledger or the blockchain. However, it also maintains your privacy because your personal information is hidden, such as how much cryptocurrency is in your wallet.
- Ultimate Control over Your Assets
Bitcoin and other altcoins give you full control over your assets. Its peer-to-peer nature allows you to manage how much you’ll be buying or selling, and ensure that the other party receives the equivalent amount.
Cryptocurrency trading is quickly becoming a primary way to earn and increase digital money. The nature of cryptocurrency allows you to do day, swing, and automated trading, as well as scalping. You can also trade at any time of your choosing because the exchange happens between two individuals, not organizations.