Cryptocurrency is a digital currency that uses encryption techniques to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Cryptocurrencies are categorized as a subset of alternative currencies and are also classified as a subset of virtual currencies.
As with any new investment opportunity, cryptocurrency trading has its share of risks, but it can also provide rewards for those who understand its market trends. In this article, we will cover some basics about investing in cryptocurrencies as well as how to make your first purchase from an online exchange provider such as Coinbase or Kraken.
As with any investment it is wise to understand crypto trading before you put any money into the market. By knowing what it is, how it works and how to trade them, your investment will go a lot further than someone who invests without doing their research first.
Cryptocurrency trading can be profitable but you should never invest more than you are willing to lose especially while values are at an all-time high. If you’re looking for ways of making money, there are several methods that an individual could consider which include day trading cryptocurrencies on exchanges like Poloniex or Bittrex; mining for new coins using computer hardware known as ASICs; buying altcoins (alternative cryptocurrencies) with potential, or buying other digital currencies such as Ethereum Bitcoin and selling them once they have appreciated.
The market can be extremely volatile, so you must understand the system before putting your money into the mix. Cryptocurrencies have been known to fluctuate wildly in price from month to month or even day by day; if you intend on trading make sure you research each crypto and learn how it works as well as its history both past and present.
You will want to evaluate each crypto to see which you believe is most likely to increase in value as well as its potential for long-term return on investment. Each cryptocurrency has different underlying blockchain technology and unique features, some of them may provide real-world solutions such as the ability to send money across borders without paying expensive fees associated with traditional banking systems; others might be a stable form of cryptocurrency that will maintain their values over time or simply just speculative tokens whose prices can fluctuate rapidly.
When considering reselling it’s important to remember that values are extremely volatile and if you cash out too early you could miss out on greater returns down the line.
Study the whitepaper of the cryptocurrency you’re interested in to see who is behind its development and research how long they have been around. Generally speaking, the longer it has been developed without any major activity, the more promising it will be for investors looking for stability or those wishing to hold their crypto over time.
If you are going to invest your hard-earned cash, do your due diligence before handing over any funds; ensure that whoever you buy from holds themselves up to certain standards such as having a good reputation.
Some popular exchanges to get started include Coinbase, Kraken & Poloniex.
Coinbase is a cryptocurrency trading platform that allows individuals to purchase cryptocurrency using US Dollars or euros.
Kraken is another trading platform that has been around for a long time and is known as one of the most secure platforms in operation today.
Poloniex does not require you to verify your account before making purchases, but this means if something goes wrong with your transaction it’s much harder to recover lost funds than on some other exchanges such as Kraken where they provide an address for sending cryptocurrency and also help their customers recover stolen funds when necessary.
Another great way of buying digital assets without having to go through all the hassle involved with signing up at an online exchange would be working directly via LocalBitcoins; here you can buy cryptocurrency straight from an individual without ever having to create a cryptocurrency exchange account, all you need to do is search the website for someone in your local area who wants to sell cryptocurrency.
LocalBitcoins also allows users to purchase cryptocurrency using PayPal which can be very convenient if you already have funds available through that payment method and don’t want the hassle of setting up new accounts at online exchanges just yet.
There is so much to learn before you start cryptocurrency trading, but hopefully, this article has given you some insight as to what cryptocurrency is and how to trade cryptocurrency as an investor.
The next step would be to sign up for your first cryptocurrency exchange account and make some real money from the comfort of your own home! Make sure that when investing in cryptocurrency it’s done responsibly – don’t invest more than you can afford to lose.
Remember: only ever put into cryptocurrency funds that you are comfortable with losing completely.