Gold has been in use for ages, and the stock market dates back hundreds of years. Cryptocurrencies have been around for more than a decade now, but the technology is still very young compared to the rest of finance. The industry was first born alongside Bitcoin, and with it blockchain technology. However, unless you have spent time learning the benefits digital currency provides, investing in Bitcoins might not be instantly appealing. This guide was designed for those who are interested in cryptocurrencies, but aren’t quite sure why the world is so fascinated with the new asset class.
All across the cryptocurrency market there is innovation around every corner. From the early days of blockchain and the emergence of Bitcoin, have come additional coins that use unique transaction processes and include other factors like smart contracts.
As the ecosystem expands, new sectors have grown that seek to further disrupt traditional banking, such as DeFi. Peer-to-peer systems like DeFi allow for permissionless lending and borrowing, for example, but are only scratching the surface of the types of benefits that blockchain assets can provide.
Beyond investing in crypto and cryptocurrency trading, most of the benefits of cryptocurrency surround their use digitally. Users can buy cryptocurrency from popular cryptocurrency exchanges then using a wallet, send value across the internet without the need for a third-party service or intermediary like a bank.
Individuals and businesses can rely on cryptocurrency advantages like low fees, fast transactions, and ease of use. Cryptocurrency transactions tend to cost much less and are significantly faster than their traditional financial world counterparts like SWIFT or Moneygram. Cryptocurrency networks are also often considered more secure due to the cryptography and decentralization involved with the technology.
For those that would prefer to hold cryptocurrency for trading reasons rather than use cryptocurrency as outlined above, the benefits of cryptocurrency trading offer another range of advantages to consider. Focusing more specifically on the cryptocurrency trade side of the market, here are the most important things to consider for the cryptocurrency holder who wants to become a Bitcoin trader.
All across finance, cryptocurrencies get a bad reputation due to their characteristic volatility. As highly speculative assets, cryptocurrencies are more susceptible to large changes in sentiment that lead to even larger price swings.
This volatility can be a curse for some, but a blessing for those with the right set of skills or tools. If you can learn to manage the risk involved with market volatility with stop loss orders and technical analysis, volatility can be turned into an enormous advantage.
With such extreme volatility, there is no other asset class as potentially profitable as Bitcoin, Ethereum, and other altcoins.
Another massive blessing and a curse for traders is the fact that the cryptocurrency market is always on 24 hours a day, seven days a week. The crypto market doesn’t even take weekends or holidays off ever. Even Christmas day crypto price action keeps ticking along. This can be stressful for times traders simply want to unwind and not have to worry about their positions or markets, but there are also ways to manage that. On the flipside, by having a market that’s always on means there’s profits to be made no matter the time of day.
Cryptocurrencies are about financial inclusion and making financial services accessible for all. Not only does this mean that users can access crypto without a bank or third party intermediary, it also means that crypto is a lot cheaper to use than other assets. Fees for sending and receiving crypto, trading fees, and fees on buying crypto are all much lower than in traditional finance. There also are no barriers to entry like certain income levels or a list of requirements to meet.
Cryptocurrencies are an asset that underpins a blockchain-based cryptocurrency network, and all transactions and related details are recorded to a distributed online ledger that offers full transparency. This transparency gives participants comfort knowing that all transactions are in order and secure, and it also provides a wealth of key fundamental data for analysis. Being able to see how much BTC is in each wallet, and what they do it with can tip traders off of when whales are moving their coins, and much more.
This transparency goes all the way down to the cryptocurrency’s code. Bitcoin, for example, is an open source project meaning that anyone can look at the source code and verify its security. It also ensures that there will only ever be 21 million BTC, there’s no double spending, and the block reward is slashed in half every roughly four years.
Liquidity used to be an issue for cryptocurrencies, meaning there just wasn’t enough due to how small each coin’s market cap was. But today, the total crypto market is in the trillions, and Bitcoin was worth well over $1 trillion at one point and is destined to reach $10 trillion or more.
With robust liquidity, traders can be certain their orders fill and there are more market participants waiting to fuel trading volume and demand.
Trading cryptocurrencies instead of just holding lets traders go long or short through derivatives contracts like CFDs. This is the trick to taking full advantage of the cryptocurrency’s market’s volatility as mentioned above.
In investing, volatility can crush an investor’s portfolio into dust, and leave them with little capital remaining. But traders can actually profit from a downtrend by going short on an asset. When they expect the price to increase, traders can go long instead.
Switching back and forth between long and short positions across higher time frames is called swing trading, while shorter time frames typically is called day trading. Ultra fast trading is called scalping.
Trading on margin isn’t unique to crypto, but an important way to get the most out of the experience and manage exposure to risk. With margin, traders don’t have to put as much capital down to open sizable positions. With margin trading, potential profits are amplified but also potential loss. Losses can be mitigated with stop loss orders and other risk management tools. Margin trading allows traders to grow their capital much faster than what markets would normally allow for.
Thanks to the digital currency market living entirely online on the internet, this means opening accounts is ultra fast, and can often take only a few minutes depending on the platform or exchange. Trading platforms tend to have more loose policies on registrations and allow for low minimums. Cryptocurrencies exchanges often have extensive KYC protocols and require all kinds of personal information that is then at risk to hacks or leaks.
Consider which type of account when beginning to trade cryptocurrencies, especially if you value your privacy and personal info.
Cryptocurrencies being speculative assets actually causes them to respond more favorably to technical analysis.
Because crypto is a new asset class, there’s often several questions that traders and investors have when they’re new to the market. This list of frequently asked questions aims to clear up any lingering confusion.
There are several pros and cons of crypto. The largest pros all involve the speed and flexibility these assets provide, allowing users to store them and send themselves, all without the need for a third party. Crypto is also highly lucrative, but the volatility can also be a con. Other cons include the lack of regulatory clarity and an association with crime.
Almost all crypto traders should consider BTCUSD to begin with. It is the pair with the most liquidity and the most media attention, therefore technical analysis to support theories are everywhere on the internet and social media. From there, ETHUSD, LTCUSD, XPRUSD, EOSUSD can also be traded. Trading altcoins against BTC is a more advanced strategy.
Cryptocurrency trading can be risky without paying attention to the trend, stop losses, and other important technical factors. With the right strategy, crypto might not be risky at all and can instead lead to a lot of reward. Be certain to backtest strategies for regular success and results.
Crypto trading can be highly lucrative in the right hands, but the most important thing to pay attention to is risk management. Making money is more about protecting capital and making educated bets on which direction the market might turn. Using technical analysis is another important tool for traders to become profitable long term.
Anyone can get started crypto trading in a few clicks by registering to PrimeXBT, an award winning margin trading platform offering forex, crypto, commodities, stock indices, metals, and more. Margin accounts are free and based in BTC, ETH, USDC, and USDT.
|#||Crypto||Prediction||Accuracy||CVIX||Price||24h||7d||Market Cap||Volume 24h|
|1||BTC||Bitcoin predictions||86.4%||24||$48 023.28||-0.71%||3.44%||$903 705 648 774||$30 868 405 829|
|2||ETH||Ethereum predictions||72%||52||$3 563.80||-1.89%||4.12%||$418 950 530 113||$18 493 669 977|
|3||ADA||Cardano predictions||68%||64||$2.42||-2.23%||-3.43%||$77 683 489 177||$3 095 901 217|
|4||BNB||Binance Coin predictions||63.6%||70||$421.22||-2.55%||-0.83%||$70 821 892 729||$1 657 577 581|
|5||USDT||Tether predictions||96%||1||$1.000499||0.02%||0.05%||$68 288 037 795||$74 172 515 331|
|6||XRP||XRP predictions||70.4%||55||$1.093567||-2.51%||-3.05%||$50 984 520 461||$3 018 193 479|
|7||SOL||Solana predictions||58.4%||89||$146.88||-7.34%||-21.00%||$43 597 219 268||$3 263 512 936|
|8||DOT||Polkadot predictions||59.2%||83||$36.36||1.92%||15.42%||$35 909 826 746||$2 318 625 572|
|9||DOGE||Dogecoin predictions||69.2%||65||$0.254974||3.69%||0.76%||$33 480 789 211||$1 873 594 606|
|10||USDC||USD Coin predictions||92%||1||$1.000186||0.02%||0.01%||$29 230 519 112||$2 845 039 489|
|11||UNI||UniSwap predictions||69.6%||56||$25.82||-4.67%||9.72%||$15 791 177 382||$595 594 004|
|12||LUNA||Terra predictions||66.4%||67||$36.20||-0.80%||12.70%||$14 549 248 511||$1 555 371 086|
|13||AVAX||Avalanche predictions||67.6%||69||$64.76||6.83%||48.17%||$14 265 392 957||$2 603 032 868|
|14||LINK||Chainlink predictions||73.6%||56||$29.85||-5.29%||4.13%||$13 491 251 604||$1 523 058 445|
|15||BUSD||Binance USD predictions||90.8%||1||$1.000197||0.01%||0.02%||$12 747 342 580||$6 385 206 639|
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