When I turn on my computer, I’m always greeted by one Bitcoin alert, news or the other. The rate at which the media and the financial world take interest in digital currencies, you’d think that half the world is participating in the revolution but far from it. People are becoming aware of words such as cryptocurrency and blockchain with the realization that there’s so much money to be made from the mother coin Bitcoin and altcoins like Ethereum, Litecoin etc.
The fastest way to jump on the cryptocurrency train is to invest and trade digital currencies. So many people jump head-first into this world without going reading extensively to understand the fundamental principles and concepts that has to do with cryptocurrency. These same people come out to say Bitcoin is a scam; Cryptocurrency is a Ponzi scheme etc.
Bitcoin, the most popular form of cryptocurrency and the pioneer of this movement was worth a meager amount a few years ago. Now a single Bitcoin is worth over $10,000. It is not too late to join in the movement; there are many other coins that have potential, Ethereum being one of them with a whole lot being introduced lately.
Blockchain technology is still in its infantry, just like the internet in the early 90’s. Smart investors and entrepreneurs are taking the bull by the horn and making moves; something so many people regret not doing in the 90’s in the case of the internet.
There are basically two ways to partake in the cryptocurrency adventure.
- Investing: Investing in this case refers to buying a particular cryptocurrency and holding it in hopes that it will increase in value so you can sell for a profit. This is a long-term approach.
- Trading: This is similar to foreign exchange trading. You buy and sell cryptocurrencies, using one currency to buy another just to maintain a high value and make profit from the difference in price of these currencies. Citing an example, I have $1000 worth of Ether. I use this Ether to buy Bitcoin when it is worth $10,000 per coin. Hours later, the price of Bitcoin goes up to $12,000. I’ll sell off the BTC I bought and make a profit. Trading is for the short term.
Top Ten Reasons to Trade Cryptocurrencies
- There are thousands of cryptocurrencies to trade with. A good research will reveal some coins that have potential
- The crypto market is very volatile. With volatility comes opportunity to make profit
- The market experiences huge spikes and drops. Possibility to lose money, but also gains can be as high as 1000% for the seasoned traders.
- It’s a new territory, filled with adventurous developments and a huge plan for the future.
- The markets are still relatively new so the markets have not been dominated by big institutional traders and investors.
- The market never sleeps. Crypto markets run 24/7, unlike the regular financial markets.
- Cryptocurrencies are decentralized and not under control of any bank, institution or government.
- The requirements to start trading are reasonably minimal. With just a few dollars, anyone can start trading.
- The blockchain is the reason why cryptocurrency has value in the first place. Ease of use and instant settlements are high points of cryptocurrency.
- It’s low cost. It costs a very little amount to buy and sell digital currencies, unlike the forex market where spreads can cost quite a lot.