Crypto!! The word which was least known to the common people till the headlines flushed with "Bitcoin hit $20,000" in 2017. Who knew that 10,000 Bitcoins amounting a few dollars (synonymous to cryptocurrency), which were first used to buy two pizzas in 2010 would touch the amount of $ 6119 in March 2020? Maybe some of the people still don't know about the crypto! Perhaps you know about crypto but do not know if the current situation is right to invest in currency!! Get ready to get all the answers for the crypto chaos in your mind with a guide for cryptocurrency trading.
Like any other currency, cryptocurrency can be used to purchase goods and services. But, unlike other currencies, crypto coins or bitcoins are digital and cryptographically secured to provide online transactions. The primary feature of the cryptocurrency is that it is decentralized, i.e. not managed by any centralized authority. It is regulated by the departments of the government but not backed by them, rather associated with complex mathematical algorithms. One of the striking features of digital cryptocurrency is that it works on blockchain technology or a distributed public ledger system where a peer-to-peer network of computers facilitates the transaction of currencies.
I guess enough of the necessary theoretical information has been mentioned, let's move forward to the much more practical information related to the question of how to start investing in cryptocurrency?. In short, how we can trade with digital currency and gain the profits associated with it.
Undoubtedly, the crypto market is highly volatile. It has the potential to turn the middle class to the millionaire only if the investment is made after the detailed analysis of the market. Like that of Erik Finman who bought around $1000 of crypto coins when he was 11 years old, and today he holds almost 500 bitcoins, and you may already know the worth of 1 BTC, i.e. nearly INR 5 lacs or $6119 currently. So, without wasting any more words, let us start our guide for cryptocurrency trading, which could help you invest in cryptocurrency and earn millions.
You need to follow three steps to earn through bitcoins from your existing money, i.e. Buy it, Allow the price of bitcoins to appreciate and then sell it. But the steps need to be followed with eyes wide open. The fact cannot be denied that without any guide for cryptocurrency trading, you can start investing.
Cryptocurrency is highly volatile and associated with high risks of investment. Let me try to make the fact more evident.
At the beginning of 2017, Bitcoin was trading around $900 and by December of the same year, it skyrocketed to around $20,000 per bitcoin. That means you lost the chance of earning almost $173,000 that too in a year. On the other hand, when the market changed, the price of Bitcoin hit back to $6,800 in April 2018 and further dripped down to $3700 in November of the same year. Thank God! That you did not invest that time, otherwise you must have lost $6800 by the year's end. Thus, the prices keep on fluctuating in crypto markets majorly due to the speculation, which makes the crypto more risky and volatile. But, it does not mean you should not put your money in cryptocurrency. One of the significant reasons to invest could be the massive profits associated with the investment.
Now the first question arises, where and how to start the investment? To begin your investment routine, first, you have to buy crypto assets from crypto exchanges through their mobile application.
Some of the evergreen exchanges in the crypto space are:
Various other exchanges like Cex, ChangeNow, Bittrex etc. can be chosen to start investing in cryptocurrency. You need to install the application of the exchange and start the trading after reading the guidelines carefully. The exchanges allow you to buy the crypto coins through your fiat currency or any other cryptocurrency, depending upon the exchange you choose for trading. They also provide the facilities of wallets to store your coins.
Till now, it has been clear that you initially need to install the app of exchange and create your account (just like any other app) before start trading. The next question arises, when to buy the coins and when to sell them? The most prominent issues associated with crypto trading.
The best time to buy coins might be when the market is relatively stable, and bitcoin prices are relatively low. The simple concept that needs to be kept in mind does not buy bitcoins at the time of the bubble or the time when the market is crashing. Without the analysts and detailed research or any guide for cryptocurrency trading, it is difficult for beginners to predict the correct time for investment.
So keep calm and keep reading. Maybe this blog can give you the courage to try your hand with small investments (in the beginning) in cryptocurrency.
Keep two points in mind associated with crypto markets, first that 10 per cent up in the crypto market is not the bubble (stable situation), but more than 100 per cent could be a bubble (unstable situation) as the cryptocurrency is highly volatile in nature. Second, keep your analytical eye on the crypto market and don't rush in to buy because of the anxiety that the price will explode the next day. You can deploy the tools like Bitcoin Wisdom or Cryptowatch to understand about the history of Bitcoin before starting the investment. Don't worry, slowly and gradually, you will know about the nature of the market.
Let's examine the present global economic situation and get to know more about if it is the right time to purchase or sell? The beginning of the year observed the surge in the price of bitcoin almost touching the peak of $10,000. But in the present situation, it crashed up to 50% (within two months). Many of the beginners consider it is the right time to invest in cryptocurrency but hold on, do consider the following points before making your decision.
Thus, you might find enough reasons to have your first investment in the digital currency in the current economic situation. Also, many of the beginners are not aware of "Bitcoin halving", which is going to half the mining rewards (mining is the process to add blocks in the blockchain and miners are rewarded with bitcoins), going to take place in May 2020. This event has the potential to increase bitcoin prices as per the crypto enthusiasts. Thus, besides the present situation, some of the other events carry high chances to spike up the prices of the bitcoin. According to this guide for cryptocurrency trading, it could be the right time to invest but at your own risk!
I would consider that you have started thinking to invest your money in cryptocurrency, after going through this guide for cryptocurrency trading. But wait, there are few tips which you need to keep in mind before trying your hand in the crypto markets.
"Don't put all your eggs in one basket" as per the Warren Buffet. It means that you should not invest all your money in one Crypto coin but invest in different coins. This exercise can balance out your profit and loss ratio. For instance, apps like eToro's CryptoFund, Blockfolio, CoinMarketCal etc. can professionally help you in managing your portfolio.
"Failing to plan is planning to fail", the quote which is genuinely applicable to crypto markets. In the beginning, you cannot have a full-fledged plan that will profit you. But, you can at least have a base plan after getting consulted with veterans and reading the analysis from the sources that are available online.
Take Profit/ Stop Loss is the process to set the price target, similar to the stock market. When you buy crypto, you have the option to wait, but when you buy to speculate, then you need to get involved with price entry and exit points. Apps like TradeSanta, which is a crypto trading bot, Shrimpy which gives you real-time charts etc. can facilitate the beginners as well as veterans too.
Being a newbie, you might get trapped in the luring offers of the fake crypto exchanges. Before putting your money in any exchange, don't forget to check that exchange is registered under the Companies Act and licensed by the government of the country. Also, scroll on google to verify the legitimacy of offers and services provided.
Cyber crimes are increasing in numbers in the online digital world. Cyber criminals use common methods of hacking and phishing through emails to steal the private keys of your crypto wallets. Apps like WebTitan, WebRoot, etc. can protect in crypto cyberspace.
Besides the necessary steps, you must always calculate your investment capability and avoid the emotions of fear and greed to get better profits in crypto space. The rational and timed decision can help you turn the crypto market to the hen that lays the golden eggs. Once you start investing in the market, you must be careful about the rumors and simply ignore them and always cross-check the news with the authenticated source of the crypto space.
I hope you somehow got the basic idea to start your investment with this guide for cryptocurrency trading. So, if you had prepared yourself to take the risk and believe that the current Bitcoin price is the low point before its spiking up, then you must start right away with the small investment. Do not forget to do the essential analysis. All the best!
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