A cryptocurrency is a digital asset designed to work as a medium of exchange. Many users are using cryptocurrency to pay goods and services. Cryptocurrencies are stored in a digital ledger or computerized database.
What makes cryptocurrency special is its decentralized nature. It means that it isn’t issued or backed by the government or central authority. There is also no middle man in any transaction. The network uses a peer-to-peer technology which makes transactions faster and has lower fees compared to other methods.
Bitcoin is the first cryptocurrency created in 2009 by a pseudonymous person Satoshi Nakamoto. Bitcoin is also the most valued cryptocurrency today. Check out more about bitcoin and the companies that accept this cryptocurrency on this page.
What is Cryptocurrency Trading?
In crypto trading, you will need to buy and sell cryptocurrency as well as exchanging it to other cryptocurrency or fiat money. If you want to start trading, you may need to get a cryptocurrency wallet and a cryptocurrency exchange.
The wallet is where you are going to store your cryptos. There are mobile wallet apps that can be downloaded online for free. There are also so-called “cold wallets” you can buy. Here, your cryptocurrency is stored offline, usually on USB sticks.
The cryptocurrency exchange, on the other hand, is the company or the platform where you can buy, sell, trade your cryptocurrency. Famous examples of these exchangers include Coinbase, CashApp, Bittrex, and Binance.
Things to Know Before You Trade Cryptocurrency
Cryptocurrency especially bitcoin has a very volatile nature. This means that its prices may rise and fall unpredictably. One of the reasons why bitcoin and other cryptocurrency is so volatile is because it is still a new asset.
Bitcoin is considered fairly small when compared to more traditional assets like stocks. Usually, small markets are vulnerable to manipulation and fluctuation in supply in demand. When a major investor sells their holdings, you can expect a massive fall on its price.
The idea of Crypto trading isn’t complicated. If you think bitcoin value will rise, you can buy bitcoin. And if you think the bitcoin price will fall, then sell your bitcoins.
Start Crypto-Trading Now
You can buy and sell cryptocurrencies on an exchange website. Of course, before you do that, you need a wallet where you can store your wallet and buy cryptocurrencies. There are two types of crypto trading you can do on an exchange website: Fiat to crypto and crypto to crypto trading.
You can easily find the difference between the two. In Fiat to crypto trading, you will use fiat currency like USD, GBP, SGD, THB, or INR to buy your coin. On the other hand, on Crypto to crypto trading, you will trade your crypto to another cryptocurrency. For example, you can trade 0.1 BTC against Ethereum currency.
Crypto traders have two trading strategies to gain profits. First is the short term trading in which the traders will buy a cryptocurrency and sell them eventually after a short period. Another strategy is the Long term trading in which the trader holds the cryptocurrency for a significant long time (years) before selling. Traders usually, gain significant profit in this strategy.