Many investors like to trade cryptocurrency because it’s a highly volatile asset. Earning much higher returns from trading crypto is possible if you time the market correctly.
One of the main goals of cryptocurrency traders is to accumulate Bitcoin or to make a profit in USD. On exchanges like Coinbase Pro, you can trade altcoins against Bitcoin to track your portfolio’s Bitcoin value. When crypto bull markets are going strong, your portfolio’s USD value will increase pretty easily, but Bitcoin’s value will be more difficult to increase.
You can lose your cryptocurrency to the market if you actively trade it. It’s not uncommon for traders to lose money quickly trading cryptocurrencies because cryptocurrency prices are volatile. It is for this reason that so many crypto enthusiasts HODL their Bitcoins.
What Is Cryptocurrency?
Cryptocurrency is a form of digital currency. Cryptocurrencies are created through the use of cryptography and distributed ledgers and are generally not controlled by any central authority or bank. A digital wallet is required to hold and spend cryptocurrency. In recent years, cryptocurrencies have been used for payments, investments, and as a store of value. This is due to their decentralized nature and security, which removes the need for third-party intermediaries such as banks. As of January 2018, there were over 1700 different cryptocurrencies.
Bitcoin (BTC) is market capitalization’s first and largest cryptocurrency and is also the most widely used. In 2017, there was an approximate average daily trading volume of about $20–$30 billion. Ethereum is a decentralized platform that runs smart contracts and decentralized applications. It was the first decentralized application platform and the largest at launch, with over 1,000 decentralized apps. In 2016, Ethereum had approximately 27 million daily active users. The biggest cryptocurrency by market cap is Bitcoin.
How to Trade Cryptocurrency?
Learn how to trade cryptocurrency in 5 simple steps.
Step 1: Make a Cryptocurrency Brokerage Account.
Crypto brokerages are the only way to purchase cryptocurrency if you don’t already own it. These are some of the best crypto brokerages on the market, including Coinbase, Crypto.com, and eToro. Each of these options offers a simple user interface and a variety of altcoin options.
Similar to opening an account with a stock brokerage, you’ll need to provide your crypto brokerage with personal identification information. Setting up an account requires you to provide information such as your Social Security number, address, date of birth, and email address.
Step 2: Fund Your Account.
You will need to connect your bank account once you have signed up with a crypto brokerage. Bank funding is available through debit cards and wire transfers at most crypto brokerages. You can fund your Coinbase account for free with a wire transfer – it’s your cheapest option.
Step 3: Pick A Crypto to Invest In.
Bitcoin and Ethereum are the most popular cryptocurrencies among active cryptocurrency traders. Technical indicators are easier to use with these cryptos than smaller altcoins because they move more predictably.
Many crypto traders allocate a portion of their capital to smaller altcoins. Small mid-market cap cryptocurrencies are indeed riskier than large-market cap cryptocurrencies, but they also offer higher upside potential. For risk-tolerant investors, small altcoins have risen over 1,000% in a matter of months, making them attractive investments.
Step 4: Choose A Strategy.
When buying and selling cryptocurrency, traders take multiple factors into account, including a variety of trading indicators. If you are new to investing, you may want to consider buying a cryptocurrency trading course.
In addition to teaching you how to invest in foreign currency, Asia Forex Mentor can also teach you about cryptocurrency. Consider signing up for the platform, reviewing it, and changing the way you trade. A number of financial information sites have featured the One Core Program, as well as Benzinga.
Step 5: Consider Automated Crypto Trading.
An automated crypto trading platform like Coin Rule may be a good choice when seeking out a crypto trading strategy. Trading bots implement strategies designed to give you the best results based on your investment goals. With automated trading, you can make money quickly, hold your coins, or diversify your portfolio because you can use a conservative, neutral, or aggressive approach.
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Additionally, you may want to consider actively trading cryptocurrency on some platforms while using automated trading on others.