Ten years ago, most people would raise an eyebrow if told about cryptocurrency. This is because at that time, cryptocurrency was just gaining traction with people being skeptical and afraid of losing their money in a venture that might crash within months.
However, today, the story’s different. If you don’t currently invest or have never exchanged Bitcoin, Ethereum, or Litecoin, you may well be considered behind the times.
Cryptocurrency is getting more popular
Cryptocurrency has now gone mainstream. A growing number of individuals as well as established firms are incorporating cryptocurrency into their asset base and leveraging its possibilities on the day-to-day.
It’s one thing to invest in crypto, but it’s another thing entirely to trade it. This begs the question; “Must you be a trader?”.
Before you attempt answering that, we should consider who a crypto trader is first.
Who is a crypto trader?
A crypto trader is a qualified individual who understands the fundamentals of cryptocurrency, has in-depth and vast knowledge about cryptocurrencies, is able to speculate on price movement in a trading account and can buy or sell coins via an exchange.
Some excellent cryptocurrencies for beginners to trade?
There is no right cryptocurrency to trade for beginners because each is different, providing a range of benefits and risks to the trader. The best cryptocurrency for you will also depend on your trading goals, attitude to risk and interests more generally.
On the other hand, it is fair to say that Bitcoin has better trading potential than altcoins or stablecoins. Reason being that Bitcoin is the most purchased, held and traded cryptocurrency on the market.
Bitcoin’s daily trading volume accounts for more than $30 billion. For altcoins, there is a high probability that the coins will eventually fade away. Many altcoins were created for experimentation purposes, but even the altcoins with stronger fundamentals will have difficulty catching up with Bitcoin.
All the while, Bitcoin’s popularity and demand continue to grow. As a result, the interest to trade it increases and creates more credibility and adoption of Bitcoin in the long term.
Another factor contributing to Bitcoin’s dominance over altcoins is that Bitcoin has enough of a track record to show an ability to withstand market crashes.
Perks of trading crypto
While there are a variety of ways you can generate income from crypto, trading has been regarded as the most profitable way to generate profit from crypto.
Trading makes it easy to speculate the rise and fall of price. As a result, you can leverage price fluctuations to generate quick returns.
Many crypto trading platforms come with an array of features that you can use to execute your trades from a well informed perspective. That way, you not only improve your chances of generating impressive income but also reduce risks associated with the volatile nature of cryptocurrencies.
Here are some benefits of crypto trading that you need to know!
1. Leverage shift in price
Crypto is appealing to investors because of the fast shift in price on multiple trading platforms. This is what attracts investors to digital currencies. Despite the dangers of price volatility, you can profit from them.
On the other hand, you must do your homework and learn the ropes. Failure to trade from a well-informed perspective could result in the whole loss of your investment in a single trading cycle.
2. No restriction on trading hours
Cryptocurrency is distinct because it does not have a set trading period. This means you can trade at any time of day or night and make money. However, you must determine the most active hours during which you can trade and profit.
You should always study and comprehend the most ideal time to trade your crypto portfolio based on your location. This is because there may be a down phase that you should avoid if you don’t want to lose money.
3. Better liquidity
Liquidity means the ability of a coin to be easily converted into cash or other coins. Crypto trading is extremely liquid.
This simply implies you’ll be able to complete your trades faster and at a reduced cost. Better pricing, more accurate technical analysis, and a shorter transaction duration are all benefits of liquidity.
As a result, you may quickly reduce risks while making a quick profit. Trading, on the other hand, may not be for you if you’re new to crypto. This is due to the fact that you must research the trading environment in order to avoid losses.
4. The option of going long or short
When you buy crypto, just like any other business, you expect that the price will rise so that you may sell and profit. As a result, when trading cryptocurrency, you can take advantage of price swings to make a rapid profit.
In the long term, you may easily regulate your transaction and avoid a loss by using trading capabilities in various trading platforms. For example, you can use the stop loss button to control your trades and reduce your risk of losing money.
5. Easy account opening
Unlike crypto exchanges, which require you to open an account in order to purchase and sell cryptocurrency, crypto trading does not require you to open an account because everything is done on your behalf. All you have to do is trade and withdraw your profits in fiat currency or any other currency you want.
Online crypto trading saves you time and boosts your chances of making a rapid profit from your crypto portfolio against this backdrop.
What are the downsides of trading crypto?
They are volatile: unexpected shifts in market sentiment can result in price swings that are both abrupt and fast. It is not unusual for the value of cryptocurrencies to collapse by hundreds, if not thousands, of dollars in a matter of seconds.
They are unregulated: both governments and central banks have yet to regulate cryptocurrencies. They have, however, recently begun to garner increasing notice. There is debate about whether they should be classified as a commodity or virtual money.
They are susceptible to error and hacking: there is no foolproof method for avoiding technical failures, human mistake, or hacking.
Trading can be difficult to learn and extremely risky: cryptocurrency trading entails additional dangers, such as network protocols. Before trading crypto, you should familiarize yourself with the hazards.
How risky is cryptocurrency trading?
Due to the high levels of volatility, I daresay the cryptocurrency market can be considered risky. Before you start to trade cryptocurrency, you should outline your appetite for risk, and implement a suitable risk management strategy.
After all is said and done
Even though crypto trading can yield quick profits, you must do your homework and learn the ropes. This is because a single blunder could result in your entire income being wiped out. If you trade effectively, crypto trading can yield large returns for those who have mastered the game.
Alternatively, you can trade with professionals who will teach you the ropes before you start trading crypto. Failure to trade cautiously not only jeopardizes your investment, but it also makes it difficult to benefit from cryptocurrency trading.
Now, it is time to decide if you should be a crypto trader or not. Whatever your decision, always know that Bitmama is here to support your cryptocurrency journey.
Good thing is, you do not have to be a crypto trader to benefit from crypto. As always, at Bitmama, we are the number one champions of #CryptoBeyondTrading in Africa. Download our app on iOS or Android today to enjoy several other use cases of Crypto. You can also join our community here to be a part of other crypto users