The cryptocurrency market is getting increasingly more valuable each year, and the cryptocurrencies themselves are more and more useful. Because of this many people decide to invest in this futuristic technology. However, it is worth remembering that investing in crypto differs significantly from trading other assets on the traditional exchange.
Cryptocurrency as an asset
Most of the differences between the digital coin and the traditional market are a result of the characteristic of cryptocurrencies. First of all, this asset exists only in a digital form, mostly with no correlation with any physical ones, unlike the assets present on traditional exchanges. The exception to this rule are the so-called stablecoins, which are cryptocurrencies tied to a fiat currency. The direct consequence of these aspects is the fact that the cryptocurrency market changes very dynamically, prices rising and falling within minutes. E-coins don’t have any set, “proper” prices and their value is based on speculations, driven by sheer supply-and-demand. Moreover, the anonymity of its users and lack of external supervision are one of the foundational values of cryptocurrencies, which existed way before the first functioning system was created. Additionally, the crypto-market is a relatively new phenomenon, which is why there aren’t many laws that would regulate it.
Where to trade cryptocurrencies – a few places
The most popular places you can obtain and handle digital assets are the crypto exchanges, which are internet platforms which allow for cryptocurrency trade. Their upsides include being very widespread and offering a lot of coins and tokens. Unfortunately, due to the high numbers of transactions carried out everyday, as well as many units being stored there, crypto exchanges are often targets of hacker attacks, the consequences of which are hard to reverse. It’s one of the main reasons why most exchanges require completing a multi-step identity verification process while setting up an account. That, in consequence, results in the unwillingness of people deeply engaged with the cryptographic community, as anonymity is a very important aspect of digital money.
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On the other hand, online cryptocurrency cantors are becoming more and more popular, as they allow for a quick and easy way to obtain crypto regardless of the user’s knowledge level. Platforms like Crypto-ATM offer cryptocurrency trade without registration, focusing instead on ensuring high levels of security and a wide variety of both “traditional” and digital currencies for their users. There are often other useful functions available, like the option to set up a proxy wallet and the stop-loss tool. It allows the user to establish the maximal acceptable price rise percentage. If the price rises above this threshold during the exchange, which can take up to 20 minutes, the transaction will be stopped. This protects the user from overpaying due to a sudden price fluctuation…
How to trade cryptocurrencies – a few strategies
Cryptocurrency trade strategies usually take on one of the two forms: long-term or short-term.
Long-term trade is considered easier and is usually preferred by investors, as it requires less energy than short-term trading. It is done by buying a considerable amount of cryptocurrency units and then storing them in a safe place, usually a “cold” type wallet. The cryptocurrency is stored for a long time, from a few weeks to a few months, until it’s average price reaches a desirable level. By using this method, the investor doesn’t have to worry about small changes occuring every day on the cryptomarket.
Short-term strategies, on the other hand, use these exact dynamic changes that the long-term ones ignore. It usually requires the user to carefully follow price charts to pinpoint a price dip, and then await a rise to profit off of selling the bought units. Gain from one transaction may not be very high, but this strategy includes making more than one such maneuver a day, which makes the profits accumulate. Speculation is also a popular element, meaning guessing how a certain event will affect the market. As the price of cryptocurrencies is usually driven by the “noise” they make in the media, even negative news can contribute to a price rise.
Cryptocurrency trade… does it have a future?
Ever since the first functioning cryptocurrency was created there was a group of naysayers, loudly claiming it was a mere trend. For now, however, the crypto-market is developing rapidly and doesn’t show any signs of stopping anytime soon. Despite the grim forecasts repeated for over 10 years, cryptocurrencies are doing great, gaining more worth every year. Awareness and interest in them is also growing, which makes more people from different backgrounds deal in cryptocurrencies. Implementing systems based on crypto is also increasingly common not only among private companies and global corporations, but even banks and store chains. Cryptography market is evolving, presenting its users with increasingly convenient, safe, effective solutions as well as more diverse offers and solutions.
So to answer the question: yes, investing in cryptocurrencies gives you a chance to multiply your capital if you use them with a clear head and awareness.
Cryptocurrencies are a relatively new, fascinating world, which tempts us with unlimited possibilities. However it differs greatly from traditional exchanges and assets, which is why even seasoned investors should educate themselves before they start investing. Despite that it’s worth taking interest, using, trying your luck and instincts in independent cryptocurrency trade , taking a step towards the future and taking part in developing the breakthrough technology worthy of the 21st century.