Cryptocurrencies are one of the most misunderstood classes of asset there is, even by insiders. They attract a lot of people who have little to no experience with investments. Many of these people are attracted by the massive gains and end up making moves in the dark or because of something they’ve heard online. The reality is that crypto markets are very volatile and unpredictable, and unless you have a solid foundation, you are bound to make errors. Let’s take a look at a few things you will need to know before trading in crypto.
First of all, you should know that buying crypto is simpler than buying stocks.. If you want to trade crypto, the first thing you will need to do is look for a wallet. Cryptocurrency wallets will store a copy of your public and private keys. Think of your public key as a PO box, and your private key as the key to this PO box. The public key has to be visible so that people can send coins to you or know where coins were sent from. The private key needs to be encrypted so that people can’t get access to those coins.
The next step will be to find an exchange. If your goal is to exchange fiat for crypto, you should know that not all exchanges allow for this, so check if the exchange you are thinking about allows it. Also, make sure that the exchange has a good reputation and has been in operation for a long time. Most crypto exchanges will give you a free wallet upon signing up.
You also have to know some basics about investing in crypto and have a strategy before you go in. And no, “buying the dip” doesn’t count. The worst thing you can do is to go based on what some guru is telling you on YouTube. What these people will often neglect to tell you is that they’re personally invested in some of the coins they push in most cases. If someone has 60% of their assets in Bitcoin, you can’t expect them to say anything bad about it.
If you want to know how to earn money from Bitcoin trading, we suggest you check out Paxful. They have a simple Bitcoin strategy that any beginner can use to make money over the long run while limiting risks. It also explores some of the common mistakes people make when trading cryptocurrencies and how to avoid them.
Another thing you have to know about cryptocurrencies is that there are so many more coins out there other than Bitcoin. You have competing coins that are starting to gain traction and smaller coins will have lots of potential too. Also know that you don’t necessarily have to buy crypto from exchanges. You can also mine it which could get you great returns. You also have initial coin offerings that could allow you to get coins at a much lower price before they go live. So, look at all the options available and capitalise on as many as you can.
Cryptocurrencies have a lot of potential and every investor would be wise to look into them. They are far from simple, however, so do your homework first and understand the basics of trading before getting started.