If you are one of those beginners in the cryotocurrency space, then you should probably read through this article to understand some of the things to know before you start trading.
Even for professionals, cryptocurrency is kind of “complicated,” but traders with more knowledge can survive in the market. On the other hand, if you are new to the market, you should be well informed before jumping into a market that has been existing for over a decade.
What is Cryptocurrency?
If you are still a beginner, then you must have lots of questions about the crypto market, and many of these questions will include how to make money in crypto, where to buy and sell crypto, and much more.
Before we jump into a market as volatile as the crypto market, don’t you think we should first understand what the market is all about and some history you should know?
Well, cryptocurrency is simply a type of money that only exists electronically (also known as digital money). The aim of cryotocurrencies is to reduce the dependence on banknotes which is controlled by the government. We can simply say that banknotes are centralized while cryptocurrencies are decentralized.
Bitcoin, which is considered the father of the crypto market, first emerged in 2009 and grabbed the attention of the finance and tech industries. At that time, interest in crypto assets was very low until sometime in 2017, when Bitcoin went as high as $19,783 apiece. Since then, other altcoins and assets such as NFTs have appeared in the digital space.
Just like every other market, crypto assets have their pros and cons, but we’ll focus on the topic.
5 Things to Know About Trading crypto
You must have read up to this point because you are new to crypto or maybe for research, which is a good thing for beginners. Here are some things to keep in mind to help you achieve your goals in this market.
1. Do your own research (DYOR)
This is the first thing you should be doing as a beginner, and the best way to do research is to find reputable news sources for recent trends in the market.
If you are already convinced that the crypto market can benefit you, then why not dedicate some of your free time to reading about things you should know from sources you can trust? There are many non-believers in this same space, and the only way to avoid them and become a successful investor or altcoin owner is to stick with the facts.
2. Learn about hot and cold wallets
Almost everyone will tell you crypto exists digitally, but after some research, you should know that you can either store crypto online and offline through hot wallets and cold wallets.
Simply put, hot wallets are always connected to the internet. This means they allow you to store, send, and receive tokens, and examples of such wallets are your popular exchanges like Binance, Coinbase and Crypto.com. Cold wallets, however, are not connected to the internet, and this is the safest way to store your assets by protecting them from unauthorized access from hackers and other miscreants.
3. Be vigilant
As a crypto trader, you need to always be on the alert, especially if you plan on trading large amounts of altcoins in your mobile wallet. You should learn some safety tips, how to spot crypto scammers and use a more secure exchange to store your assets.
4. Be prepared for volatility
As I have stated above, the crypto market is very volatile. This means they are not as stable as your standard currencies (banknotes). An asset that is worth $20,000 can be worth more or less in a couple of minutes.
Even experienced crypto traders still lose large chunks of money when mastering the trends of these virtual coins.
5. Venture into other altcoins
Bitcoins, Ethereum, Ripple, and Litecoin are only one part of the story when it comes to cryptocurrency. Explore legitimate altcoins and be careful not to place all your eggs in one basket. This is not financial advice, but you should try as much as possible to go for alts with the most-used cases.
If you plan on going from beginner to pro in the world of cryptocurrencies, then you should be aware of certain platforms like:
Coin360.com – You can use this platform to view the performance of any crypto asset over a period of time.
Alternative.me – This platform is helpful for viewing the fear and greed index to understand how others feel about the market at a particular time.
Coinmarketcap.com – Coinmarketcap can be used to learn more about any crypto asset.