The world of cryptocurrency is confusing at best and messy at worst; how are you going to even begin to approach trading in cryptocurrency? Well, if you’re looking to fork out some big bucks on a digital exchange, the first thing to know is that you’re practically guaranteed to make a loss here. But aside from that, trading in cryptocurrency takes a little bit of nuance, as it’s impossible to predict what the currencies are going to do next, and with the points below, we hope to help you get started.
Bitcoin was at an all time high in 2017, but since then it’s dropped massively – where will it go next? (Pexels Image – CC0 Licence)
Know Your Currencies
The first thing to get to know, before you even think about investing, is the amount of currencies on the market. According to a variety of sources, nearly 6000 different cryptocurrencies are currently being traded, and knowing which ones are most likely to be worth it, and which ones have absolutely no backers (and likely never will) is key.
Make sure names such as Bitcoin and Ethereum are noted down somewhere, as these are the top two cryptocurrencies, achieving the most success since their inception 10+ years ago. But smaller currencies are still worth money too. You can click here for a quick crash course in a currency known as Ripple, which could be prime for going on your list of worthy currencies right now.
Get Acquainted with Exchanges
The next thing to do is learn what a cryptocurrency exchange is and how they work. Their main purpose is to take a typical currency, such as GBP or USD, and then turn it into a cryptocurrency. However, an exchange does a lot more than is hinted at in the name.
You can buy and sell coins here, but you can also participate in trading pairs, or using a set of exchanges all at once in order to get the best deal. A lot of specialist exchanges also exist if you want to use more local currencies, depending on where you are in the world, and many exchanges will offer to be fast and cheap for your convenience. Make sure you take a look around before you settle into making an account with any one of them.
And finally, you’re going to need to learn how to keep you and your cryptocurrency safe once you start investing and trading in it. Make sure you know who owns the company that’s created the specific cryptocurrency you’re looking to invest in, and look out for some key factors.
These factors include: other (big) investors, what the deal you’re making means to your finances, and whether or not the currency itself is already established. Never discount the fine print, and always do your research!
Dipping into the world of cryptocurrency should be done slowly and surely. Take your time, do your research, and try not to gamble too much here. Remember, cryptocurrencies are volatile.