Our world is changing, from the physically based world to the digital one. Like all new worlds, the online world finally has its own currencies. After the emergence of Bitcoin in early 2010s, cryptocurrencies soon forced their way into the financial world. Cryptocurrencies are currencies that exist solely online, with no physical representation. These digital coins are created and traded online, everything related to cryptocurrencies is done online. When Bitcoin went from being valued at less than $3 a coin to over $7,365, people took notice. While there are the big boys of cryptocurrencies like Bitcoin, Ripple, Litecoin, EOS and Ethereum, thousand new ICOs or Initial Coin Offerings take place monthly.
How do I make money?
Cryptocurrency trading works exactly the same as trading in forex. While in forex you use pairings of fiat currencies like EUR/USD, here you will trade in cryptocurrencies like Bitcoin, Ether, or Litecoin. Normally, you will trade a fiat currency for a cryptocurrency, then when you chose, trade that back to the fiat currency. While this is the most common form of trading cryptocurrencies, there are some exchanges that will allow cryptocurrency-to-cryptocurrency trading.
There are two types of trader strategies in the cryptocurrency market: long-term trading, and short-term trading. In a long-term trading strategy, you buy and hold cryptocurrencies over a long period of time, ranging from weeks, months, to possibly years. This strategy allows the trader to follow and study the price trends over longer periods of time, thus letting them make informed decisions that aren’t affected by short-term dips in value. Short-term trading, might lack the stability of the long-term strategy, but the ability to make trades in few hours or days, allows you to cash in on the volatile short-term spikes and dips in the market. This strategy allows buyers to buy coins from cryptocurrencies that are dipping and enjoy the rise when it bounces back, as Bitcoin has shown to do many times.
Are Cryptocurrencies worth it?
Being new, currently unregulated and a known hunting ground for hackers, does put a lot of doubt into people’s minds about getting into cryptocurrencies. Large percentage of the internet using population in the world is weary of trusting their money and information on the computer or the internet. Especially as volatile as cryptocurrency market has proven to be, it is understandable why people are suspicious.
What makes this form of investing so intriguing is that some of its biggest flaws are also their biggest strengths. Take the volatility, this flaw also is one of the most appealing aspects of trading in cryptocurrencies, the short spikes and dips are the reason majority of investors are making money. Also, the lack of regulation and involvement of a middle man makes the exchanges fast and cheap, along with removing work hours from the equation and letting people trade around the clock.
Investing, should come after research, and when you have done your research, you will only need to look at the success of Bitcoin. When you are ready, chose a broker with the options you want and get familiar with the system provided, and, the best way to get in the water is to jump in. Keep in mind all brokers, exchanges and wallets present a different set of advantages, securities and risks, make sure to take enough time to do proper research before making your final decision.