Cryptocurrency Investments: Advantages of Trading Cryptocurrencies

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Cryptocurrency Investments

IntroductionIntroduction

Cryptocurrencies are tending these topics, you rarely find any techsite having no headline about Cryptocurrencies. The first Cryptocurrency was launched in 2009 called Bitcoin and it is still one of the best known Cryptocurrency, Since that time there are many cryptocurrencies that have come into the market. Bitcoin and Ethereum are the largest Cryptocurrencies out of large pool.

These Cryptocurrencies physically are not present. These are the virtual currency works on the cutting edge technology of Blockchains. The major concept behind it is Cryptography.

Milestones Of BitcoinMilestones Of Bitcoin

  • Bitcoin Inventor Satoshi Nakamoto released his paper that described about the details of How cryptocurrency works.
  • These cryptocurrencies can be used to perform financial transactions in a system which is completely decentralized and operates on trustless manner.
  • Bitcoin Has Crossed Various Milestones.
  • Com is the domain which was registered, since it is unknown when Satoshi Nakamoto Began developing the concepts of the blockchain of Bitcoin Creation.
  • Some of the others milestones are Bitcoin: A peer-to-peer Electronic Cash System, Genesis Block, First Open-Source Bitcoin Client Code, first Bitcoin transactions , First Mining Pool, Bitcoin Foundation and may other.

For Non tech people it may sound it may sound difficult but still you can refer some resources available on internet to understand about the technology.

There are various reasons people invest in cryptocurrency. Some want to make good amount money, some want to get their money invested in assets. One should know why they are investing money in Cryptocurrency and what is their goal.

There must be good knowledge about the cryptocurrencies and latest trends like which are more profitable and and are followed by most of the people. In Present the market of Cryptocurrencies are almost crashed and the prices of bitcoin have gone down.

Many People have lost their money invested in Bitcoin thinking that it will rise but the scenario is upside down. The price didn’t rise but fell.

There are various key points that are important to know and one should keep in mind before investing in Cryptocurrencies and some of them are discussed in following paragraphs.

Investing in Cryptocurrency is same as investing in commodities. Commodities can be assets or Base metals. Cryptocurrencies are similar and they are used in financial and insurance applications and investors can invest in cryptocurrencies

Cryptocurrency Trading can be compared with forex trading, It is same but instead of selling and buying fiat currencies such as euros or US dollars, traders can trade on cryptocurrencies.

Limit Your ExposureLimit Your Exposure

There are two concepts of limiting your exposure.

  • Never invest if you are not willing to loose. You must be comfortable and make trade stress free.
  • Consider to set profits and losses orders
  • These limits are offered by many professional trading platforms and can automatically liquidate and “cash out” your position at predefined prices.

Many market trading books and guides have certain chart rating techniques and patterns used by professionals to predict the market

Market does follow patterns but the outcome is not guaranteed.

Cryptocurrencies are volatile in nature. They are not as stable as currencies are.

There are various points that can affect cryptocurrencies:

  • Regulation

If a government makes some regulation that affects the cryptocurrencies, the price will decrease. For example when china banned ICOs, the ethereum fell by 41% in 15 days

  • Influence From Media

Influence from Media greatly affects a cryptocurrency price, whenever some influential says something about cryptocurrencies some stores starts accepting as a form of payment

  • Changes to the technology

When a cryptocurrency core technology is affected, the cryptocurrencies price is also affected

Advantages of Trading CryptocurrenciesAdvantages of Trading Cryptocurrencies

Trading Cryptocurrencies can have advantages. Few of them are given below

  • Cheap and Fast Exchanges

The transaction fees of the cryptocurrencies are cheaper than credit card, bank transfer fees, market trading fees are cheaper than forex trading fees

  • Extreme Volatility

Many Traders make Profits when the price of the cryptocurrency rises and it experiences large price movements

Before Investing in CryptocurrenciesBefore Investing in Cryptocurrencies

Before investing in Cryptocurrencies, One should decide the cryptocurrency to invest in and the amount. The amount is very important to know. For long term investments one should do fundamental analysis. Generally tokens that solve problem are unlikely to fail then the others

One should gain information about the market, market cap and economics of the respective cryptocurrency.

One should plan strategically before investing in Cryptocurrencies. The charts, graphs and trends should be observed.

Is Your ICO or Cryptocurrency Trustworthy?Is Your ICO or Cryptocurrency Trustworthy

The next thing that comes in is to find whether the ICO or Cryptocurrency are trustworthy to invest in. It is very important to find whether the cryptocurrency is worth for your money. According to Forbes.com, The only three people can find this and those are philanthropist, Billionaire and Entrepreneur.

The best indicators for long investors are ideas that have tangible solutions, positive improvements and ability to work on complex ideas. Some of the platforms that allows you to do cryptocurrency trading are Bitmax and Etoro.

Features of BitmaxFeatures of Bitmax

You can trade Cryptocurrencies with large liquidity for bitcoin and upto 100%leverage on margin trading fees it varies. It is supported worldwide with exceptions and deposit is done through Bitcoin.

  • Features of Etoro It copies the trades of leading cryptocurrency investors on the this social investment platform
  • Fees: Spreads Supported in various countries
  • Payment methods are through Credit cards, Paypal, Bank Transfer

Know Major Crypto Investors and PlayersKnow Major Crypto Investors and Players

Crypto Market is one the volatile Market, One wrong step can make you lose all your money. It not harm to find or know about the major Investors or the players investing from long back and have earned money or even become billionaire.

Many Crypto Investors and Advisors Say that you should invest money if you are ready to lose. You must willing to lose money since you cannot be sure whether your money will rise or fall

There may be people of both category who became millionaire and people who lost all their money.

Market Cap given by coinmarketgap.com at the time of writing

  • Cryptocurrencies: 1999
  • Markets: 14278
  • Market Cap: $221,964,523,266
  • 24h Vol: $15,548,289,774
  • BTC Dominance: 51.2%

Right Amount to be investedRight Amount to be invested

Investing a amount is very easy but it is very difficult to invest money in Proper way. Suppose you invest money and found that that all the money you spent have gone, you wont be able to pay your bills, So it is very important to determine the amount in right way and properly

Are You Going to invest for long or short term?Are You Going to invest for long or short term

If you are investing for longer period of time instead of investing money in one time then it won’t be a great Idea. You should incrementally invest in cryptocurrency and have average value.

The Cryptocurrency market is volatile and it is tough to predict the future prices. It is the market which never stops working. Taxes are reduced when you pay for long term

Step By Step Buying and SellingStep By Step Buying and Selling

You should never sell the cryptocurrency at one go , you should try to build ladder by selling at incremental way, buy when prices go down sell when prices go up

Some people see the trend and finds that it is at peak so they buy at high price and when it falls the value goes down so it is always considered to buy at low price

Stocks Market Vs CryptocurrencyStocks Market Vs Cryptocurrency

If you find some company is not performing well you can sell the stocks and buy of some other company, but this is not in the case of the cryptocurrency Market, You can never predict whether you will gain and loose, for example in case of bitcoin people invested a lot

when it was at its peak but now the prices have really gone down and people are regretting. Stocks move slow as compared to Cryptocurrency

It is very trickier than to invest in Stock Market

Investment Portfolio with limited Coins

Investors should create their portfolio and should work on it regularly, Invest in only things that you understand and have knowledge

Stay Away from LeverageStay Away from Leverage

Leverage is the money that brokers give as a loan. It is highly advisable to stay away from leverage till the time you have learnt everything and making trades with your own money.

Leverages can help you to make huge profits but at the same time you may lose. Though it amplifies winning and your losses .

Conclusion

TradingCryptocurrencies work almost same as trading fiat currencies, and it will benefit you greatly to learn the theory behind the currencies.

Though profits are not always guaranteed at the time of trading, you can take steps to avoid yourselves from heavy losses and improve the understanding about the market’s move.

Summary

This write up focuses on the Introduction to Cryptocurrencies and Various key Points and Strategies to follow before investing in the cryptocurrencies.

This write up will help people to get idea about the investment in the cryptocurrencies, Some of the various cryptocurrencies are IOTA, LiteCoin

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