It is no longer usual to know that almost every third or fourth person you know, would have some knowledge about cryptocurrencies. In the recent years, the cryptocurrency industry has gained worldwide recognition and adoption.
Just about 3 to 4 years ago, the cryptocurrency industry was known as much as it is known today. What exactly happened that changed the cryptocurrency industry once and for all. The main reason behind so much adoption of the cryptocurrency trading in the recent years is mass un-employments and business closures. With so many people losing their primary sources of income, cryptocurrency trading turned out to be the best choice of making money through investments.
How was Cryptocurrency Introduced
With the launch of the first ever cryptocurrency ‘Bitcoin’ in 2009, a new asset had been born. At the time of the launch, Bitcoin (BTC) could be acquired only through the mining process. Therefore, an alternative method was required for the acquisition of Bitcoin (BTC).
The online trading brokers knew the potential of this new decentralized digital-asset and started opening up cryptocurrency trading exchanges. This provided investors the ability to acquire Bitcoin (BTC) and other cryptocurrencies through purchasing as well as trading.
What to do before Starting Crypto-Trading
After hearing so much about the cryptocurrency trading, I’m sure that you cannot wait to start investing in it as well. However, you need to be very cautious and thorough when it comes investing no matter the trading instrument.
When it comes to cryptocurrencies trading, you need to be even more cautious and alert as the crypto-trading platform is decentralized in nature. This makes it really difficult to track or trace if you end up being scammed.
Therefore, before you start investing, you need to ensure that the cryptocurrency trading firm you are choosing is legit and lives up to its reputation. To confirm this, you need to gather as much information and intelligence about the crypto-trading broker from the internet/crypto community as possible.
Some of the main aspects you need to verify the authenticity of a crypto-trading broker include regulatory adherence, security/protection infrastructure, real-time support, broker’s goal, its background, and cryptocurrencies for trading. Once you have gone through all the checks and are satisfied, then you can make a deposit and open up a trading wallet through the trading broker.
Trade in Cryptocurrencies
Fortunately, for people like you and me, the cryptocurrency trading facility is already available so all we need to know is that how cryptocurrency works and in how many ways it can be traded.
Old School way of Cryptocurrency Trading
Once you have acquired the account and selected the cryptocurrency for trading, you need to stay alert and keep a close eye on the cryptocurrency markets. There are numerous cryptocurrency trading markets that you can choose to trade from.
The cryptocurrency trading is somewhat similar to stocks trading so all you need to do is select a cryptocurrency, buy a certain quantity based on your investment, and then wait for the right time. In time, if you see that the price of the cryptocurrency in your holdings is increasing, you can either keep waiting for the price to go even higher or sell it off. Just like stocks trading, once you sell the cryptocurrencies, you make a profit through them.
Cryptocurrency (FX) Trading
One of the best things about cryptocurrencies is that the asset is widely adopted on other trading platforms such as Forex trading. When it comes to Crypto-Forex trading, you have the option of choosing a crypto-fiat trading pair to choose from such as BTC/USD or ETH/EUR.
Just like Forex trading, you can monitor the difference in the price of the pair you choose to trade in and sell the asset if the price difference goes in your favor. Although there are around 70 currencies pairs to trade from when it comes to fiat currencies, with cryptocurrencies on board, the number of pairs offered shoots all the way up to 2000+.
Crypto-CFD Trading
Whether it is the traditional crypto-trading or crypto-FX trading with a broker like CoiniBank, you are always required to buy the cryptocurrencies when it comes to these two. However, majority of the investors end up going to a different trading instrument as they do not have the right amount of money to purchase cryptocurrencies.
In order to deal with this alarming situation, the CFD feature was adopted and introduced to the cryptocurrency trading platform. When it comes to CFD trading, the investors are not required to buy the actual cryptocurrencies.
Instead, they only have to choose the cryptocurrency of their liking, decide on a certain quantity, and predict its price at a pre-decided date/time. This deal takes place between the investor and the broker. If the outcome is in investor’s favor, then it the investor making a profit and if broker, then it’s the broker’s lucky day.
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