Making Money Online: How to Start Crypto Trading
Do you think that cryptocurrency is the next big thing that will help your wealth grow? Now that the global blockchain market is expected to reach a value of $23.3 billion by 2023, you aren’t wrong with your assumption. Cryptocurrency is growing by the day and continues to make advancements that will forever change the financial sector.
Unfortunately, investing in crypto is a little different than regular investments. Keep reading to learn how to start crypto trading.
Determine Your Trading Method
The methods of trading crypto work similarly to regular stock and forex trading. Some people like to start with day trading and make a profit every day. Others want to buy cryptocurrency coins and hold them with the expectation that their coins will go up in value over time.
If you have a lot of time and want to make a quick profit every day, day trading will be for you. However, this is a much riskier trading strategy, and you’ll need to learn technical analysis and potentially lose a lot of money learning until you get your system right.
Trading bots are also available for people who want to day trade. If you have a strategy and don’t have time to execute it, you can use a bot to do so. However, you’ll need to configure your bot correctly to ensure nothing goes wrong that causes your bot to spend all your money.
Many people do well by purchasing cryptocurrency and holding. Investors will dollar cost average on a schedule and watch their wealth go up over time. If you don’t want to stare at charts all day, this is a perfect option for you.
Pick Your Coins
You don’t only have the option to buy Bitcoin today if you want to invest in cryptocurrency. There are now thousands of coins to purchase. The question is, which ones are safe investments and which ones will provide the most return on your money?
The top cryptocurrencies like Bitcoin and Ethereum are safer investments. They’ve been around for a while and are trusted to perform well. However, smaller cryptocurrencies out there offer unique features and more growth potential.
These coins may offer more growth opportunities, but they are also riskier. They aren’t as proven as the top cryptocurrencies, so there’s more of a chance that they’ll fail and cause you to lose your money.
Pick a Crypto Exchange
Once you have a trading strategy and know what you want to buy, it’s time to pick a cryptocurrencies exchange that can meet your needs. There are many options, and they don’t all have the same coins.
For more established coins, you’ll be able to find them everywhere. It doesn’t matter if you sign up for a small or large exchange. For smaller market cap coins, you’ll need to do some more searching before you find an exchange to trade.
Depending on your country, you’ll also need to go through the “know your customer (KYC)” process. Governments require this process for tax purposes and companies to legally have a presence in a location.
If you don’t want to send your information to a cryptocurrency exchange, you’ll need to find a service that doesn’t require KYC.
Store Your Cryptocurrency
If you plan to day trade crypto, you won’t need this step. However, this is an important factor to consider if you plan to hold your cryptocurrency for a long time.
There’s a saying in the cryptocurrency community: not your keys, not your coins.
That means that if you don’t have a cryptocurrency wallet to store your cryptocurrency, you don’t really own your cryptocurrency. Central cryptocurrency exchanges hold on to your cryptocurrency wallet for you, and they have access to your private keys and your coins.
While this isn’t an issue in most cases, it’s a problem if something bad ever happens on a cryptocurrency exchange. If they get hacked or have a rogue employee, your cryptocurrency is at risk.
You have no risk outside of losing your private keys and seed phrase when you have your cryptocurrency in your own wallet. It’s a much safer bet if you plan to hold for a long time.
Create a Growth and Exit Strategy
It isn’t enough to grow your money with cryptocurrency if you don’t have a plan. In most cases, you can’t use your coins in everyday life yet. If you want to take advantage of your earnings, you’ll need to have a strategy.
If you buy a coin that doesn’t have much utility like Bitcoin, you should plan to draw down your earnings over time. You’ll need to move any coins you have in a wallet back to an exchange and cash out.
Other coins have other options. Cryptocurrencies with staking options allow you to stake your coins and earn interest for helping validate transactions. You can reinvest your staking profits or cash those earnings out to earn a passive income.
You also have other options if you have investments in DeFi. You can use your coins and offer liquidity to decentralized cryptocurrency exchanges. You’ll earn a portion of the transaction fees from people trading on DeFi platforms.
Now You Know How to Start Crypto Trading
Even though there is more to learn when trading in alternative assets, you can grow your money if you learn how to get it done. Now that you know how to start crypto trading, you’re ready to start on that path. Sign up for a cryptocurrency exchange today to make your first trade.
Are you looking for more ways to put your money to work? Check out the blog to find more helpful investing advice.