Cryptocurrencies are the new trend that has taken over the finance market and held a tight grasp of the same. As a result, traders are investing significant capital in digital assets, intending to gain profits. On the other hand, more people have spelled out their futuristic plans with utmost optimism, arguing that cryptocurrency is likely to take over and even replace fiat money.
As much as this is promising, it is not reassuring. We cannot tell with certainty what is likely to happen because cryptocurrency is a dynamic that has to be understood clearly for one to throw about such claims.
Currently, there are around 9000 cryptocurrencies: Bitcoin,stablecoins, and the rest, which are altcoins. There are dominating cryptocurrencies, but none has surpassed Bitcoin since it was the earliest in the field, and all altcoins were created with it in mind.
How to trade cryptocurrencies
Crypto trading is conducted through trading platforms that provide trading services. These platforms give traders a space to buy and sell their digital assets. However, it is essential to note that the possible outcomes are either a gain or a loss in crypto trading.
To begin trading, a trader has to select which cryptocurrency to trade. Keeping in mind the vast number of cryptocurrencies circulating in the market, you are supposed to do thorough research before settling for one. Bitcoin stands as the most popular option for reasons like how widely accepted it is. However, this does not mean that it is an outright option for every trader. Instead, one should choose the crypto that is likely to bring in more profits.
In altcoins, it is essential to note that there are more risks associated with currencies with small market capitalization. The most promising Altcoins are those that have been consistent and solid, for example, Ethereum.
Next, one must open an account with a crypto brokerage that suits their trading needs. This is an account where you have to feed in your personal information to make the trade. Some of the information required are your Security number, your bio-data, and a way to contact you, so probably an email address. This is not very different from opening a stock brokerage account.
The best platforms to create an account currently are – Gemini, Binance, the Bitcoin Pro website and Coinbase. After completing registration, you are required to fund the account. The easiest and cheapest way to fund your account is through a credit/debit card, which is readily available on many platforms like Gemini or Coinbase.
The next step is to come up with a winning plan. First, it would help if you decided on the strategy that works best for you. There are several options to choose from, but many settle for day trading strategies and close their positions at the end of the day. It might be quite a hassle for beginners, but one can opt for a short course to learn about cryptocurrency trading on the brighter side. Since trading can result in a loss or profit, learning trading helps with knowing when to enter and exit the market.
Pros and cons of cryptocurrencies
Considering that a coin has two facets, there are pros and cons involved in trading cryptocurrencies. One of the reasons that have lured more investors into the crypto business is their potential for high profits. Many people who got rich through digital assets will tell you that there are ‘fat’ returns for sure. The supply of digital currencies like Bitcoin is limited.
With a limited supply, the demand is high, and this drives their value. Newest method for earning on crypto is staking. Staking has brought new value to crypto space. You can stake your crypto and earn by only staking your crypto for a period of time. Make sure to use reliable platforms for staking such as Ascendex.
The other reason that has led to high demand is the wider acceptance, resulting in a bigger market. In addition, with the expectations of doing away with physical money due to inflation, many people opt to hold their wealth digitally.
Nevertheless, there are those on the extreme edge of the argument. As much as it is an advantage for cryptocurrency to be highly volatile, it is a disadvantage that a trader can lose investment when the the value of coins goes down. Cryptocurrency is also not wholly accepted, so buying goods and services in digital assets are likely to be turned down. Lastly, the currency is not entirely backed. This is a security worry for investors since hackers are known for such mischief. There is also the fact that it is insured.
To sum it up, the cryptocurrency market is a gold mine for those who know what they are doing. Therefore, it is crucial to do sufficient research, and that way, you will be on your way to make millions!