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Though cryptocurrencies may not yet be the mainstream, they are still rapidly gaining popularity around the world. They can now be used to buy and sell, and like other currencies, can be traded on the day market too, providing that you have large enough sums to make it worth your while. Like many ways to get rich, there is risk involved and this day trade can really be all or nothing.
If you would like to start trading in cryptocurrencies, and have already traded in currencies before, there won’t be much of an issue switching from one to the other. The principles of the markets are much the same. However, as cryptocurrencies are unregulated, they are prone to sudden shifts making the market notoriously volatile. For this reason, even well practised traders can find themselves in a suddenly precarious position – or suddenly incredibly rich.
Here’s what you need to know:
Use a Cryptocurrency Wallet
A cryptocurrency wallet does not work in the same way as a normal wallet would. It doesn’t contain your cryptocurrency, it contains a series of keys and passwords that interact with the blockchain where a record of transactions is kept. Blockchain is the fundamental success of cryptocurrencies as it means that rather than dealing with ‘real’ money, it instead creates a fully available public record of all transactions making every trade fully verifiable.
This video explains blockchain in more detail:
You should use a cryptocurrency wallet to ensure that you will be able to access your cryptocurrency using the keys. There is a danger here that should you lose your keys, you will lose your money. For this reason, you should consider the pros and cons of both online and offline wallets before you choose one.
Choose an Exchange Site
Choosing a suitable exchange site can be a difficult task, but you must not feel pressured into making a quick decision; thoroughly research all your options and do the math before you start. Many exchanges will offer different fees depending on how you want to trade, and how you want to invest; some exchanges are best for one type of cryptocurrency, others will offer multiple currencies; and some exchanges are only suitable for some countries.
There are also deals to consider when you are choosing your exchange site such as a Bitfinex referral code, which will give you a discount for your first 30 days on the exchange. The best site for you may not be the best site for everyone, so it is worth taking some time to look into all the different options available to you.
Starting to trade in cryptocurrencies will take some time to get used to but the risks and rewards make it an exciting exchange to participate in. Go slowly to begin with, and remember to remain cautious in this volatile market.