How To Trade Cryptocurrency
While it may not be “real” money in the material sense, it is real money in the virtual world. And, it is a real investment that fluctuates but, typically not depreciating to where it is less than its initial release price, or at least not as of now. Of course, there may be cryptocurrencies that the public may not be aware of and they may have simply failed. Then, there are those that have built the crypto world, building it strong. Your mind may have triggered to Bitcoin; and, Bitcoin is pretty much the crypto world for many cryptocurrency followers. There is more to the cryptocurrency world than just Bitcoin. There is Litecoin, Ethereum, Ripple, and so many more. You may think that cryptocurrency is something that you invest in and sit on; but, Bitcoin is proving that wrong. Many retailers like Dell Computers and so much more are accepting Bitcoin as a means of payment. That little fraction of a coin you may own, or an entire coin could appreciate so drastically that you could be spending using a fraction of the coin on a daily basis and still, have your investment. Or, it could depreciate; but, it is unlikely that it will fall to its original price of eight cents a coin when it was released. So, now you have an investment that has shown that it appreciates like no other, drops percentages, regains itself, and is predicted to gradually increase in value. Some are saying that cryptocurrency is a way to solve world poverty, others are saying that in the end, it will crash. Regardless, it is something of interest, and an investment that is proving to make money for the ordinary man or woman, just as investors.
Cryptocurrencies are a digital currency; and, in the virtual world, they are taking ordinary people and making them rich. So, you buy a fraction of a Bitcoin; what do you do with it? There are many things you can do, including trading cryptocurrencies, which is another fun thing, as well as investment in itself.
How to trade cryptocurrencies
Obviously, to trade cryptocurrency, you must own some cryptocurrency, as well as have it stored in a cryptocurrency wallet and have an exchange where you can trade the currency. Your thought may be that you purchased the currency and held onto it until it turned hundreds of dollars into thousands and you are now ready to trade. Not a bad thought. Maybe you haven’t invested in your cryptocurrency yet, and are predicting into the future. Let’s start with investing in the currency.
A cryptocurrency is a new form of investing; and, one that is considered a high risk all while making people fortunes. You have decided to invest; you have “X” number of dollars that you have set aside. Do you call your broker and tell them that you want to put the money into cryptocurrency? You likely could, but they would have to be a cryptocurrency broker like a Bitcoin broker. Today, there are also such things as a cryptocurrency IRA, which is pretty new to the picture. There are also exchanges where most people buy coins or fractions of coins and store them in wallets. The cryptocurrency wallet is where you store your encrypted passwords that are the identity of your coins, and the exchange is something like a stock or currency exchange where you trade your cryptocurrency like Bitcoin for other cryptocurrency or fiat currencies like the United States dollar. Think of it as the online world. If you want to trade cryptocurrencies basically, you have to be online because everything is the digital world, just as the currency.
There are some things to consider when trading cryptocurrencies:
There are different cryptocurrency exchanges. For instance, Coinbase is an online platform that offers lower fees with the same concept of Wall Street; however, it is an online platform. Cryptocurrencies can also be traded as cryptocurrency stocks on the stock market through companies like GBTC.
With cryptocurrency, you can trade 24 hours a day. Because it is a cryptocurrency unlike other investments the main place, and likely the best, to buy, sell, and store the currencies is on an online exchange with Coinbase being the leader of online crypto exchanges. However, on Coinbase, you can only buy, sell, and store Bitcoin, Ethereum, Litecoin and Bitcoin Cash. If you plan to be a serious trader, you will need another exchange such as Coinbase GDAX.
With cryptocurrency trading, it is important to know what you are doing, or you could lose your investment just as you could make a fortune with it. When investing in the currency, stick with the top currencies on the market as it is unlikely that all would fail at once.
Cryptocurrency options include trading and investing in the digital currency, using it for transactions such as purchasing at an online retailer like Dell Computers and to send or receive money, and it can also be mined.
When you first start to trade it is essential to choose a company that has a solid reputations and has an exchange and wallet like Coinbase, and you should start with trading only top coins like Bitcoin, Ethereum, and Litecoin.
Coinbase is a good starting point; and, once you have learned everything that they have to teach, and gain a better understanding of trading, you can move up to sites like GDAX. When trading does not start out trying to trade crypto pairs as it is complex and riskier than buying a single digital currency as an investment.
You won’t want to margin trade until you have a full understanding as to what it is. Also, it is essential to know that there are tax implications as they can also be tricky and something that you will want to learn.
To start trading, you will want to sign up for Coinbase.com and create an account with a digital currency wallet. You will need to connect your credit or debit card or a bank account so that you can purchase your cryptocurrency into and out of your local currency. Once everything is set up, you can then purchase your cryptocurrencies and hold onto the currency or start to trade. You can also sign up for another exchange and trade currencies back and forth and then transfer them back into your currencies like Bitcoin, Litecoin, or Ethereum. Record all transactions for tax purposes. Remember that you do not have to buy a whole coin, you can purchase a fraction of a coin. When trading there are fees involved.
There is an app that can be downloaded that allows you to trade cryptocurrency from your mobile phone. Also, you can set alerts just as the Google alerts that are designed to help cryptocurrency users to know when to buy and sell.
*We would like to remind you that any content on the CryptoFactoid website should not be regarded as financial or legal advice. Please be mindful of any and all regulations regarding cryptocurrency in your particular jurisdiction. Never invest/gamble more than you are willing to lose and always safeguard any digital currencies you own by keeping them in a wallet whose private keys you control.