To understand the functioning of thecryptocurrency market, it is essential to decipher the term cryptocurrency. In layman’s terms, cryptocurrency is a digital asset that allows the verification of transactions between two parties without any third party’s interruption like financial institutions, banks, payment services etc.
How Does It Help the Traders?
Every coin or token, which has entered the cryptocurrency market, has been developed to solve some real-world problems. The current underlying problems like high transaction costs and transaction times have been taken into consideration and coins like Ethereum and Ripple are trying to come up with protocols, which help the users combat such limitations that are currently prevalent in the system
What Is Cryptocurrency Market &What Makes It Different from the Other Markets?
The cryptocurrency market comprises of a number of coins/tokens available for trading. Through the market data, technical analysis of every coin can be done. Some coins tend to strengthen and some tend to weaken at any given point in time.
Unlike the other regulated stock markets around the world, the crypto market is highly unregulated and hence a highly volatile market. Due to this, there are many prevalent scams that occur in terms of cryptocurrency exchanges or tokens. Hence, traders are requested to play safe and invest only that amount that they can afford to lose.
What Are the Factors That Help in Choosing the Right Coin for Trading?
Currently, there are 1500+ coins available on the market. Depending upon the performance of every coin based on various parameters, the market ranks them to help the users choose the ideal coin.
When a trader intends to invest in the market, an ideal coin for the trader would be the one that is listed on various crypto exchanges, is holding a good ranking, is strengthening over a period of time, has a good market cap, and is solving a real-world problem that is backed by an amazing team of the company. You may also check the success rate of the coin when it was initially launched in the market.
How to Start Trading in Cryptocurrency?
When you first start trading, you have to look around for such exchanges or wallets that accept the fiat currency that is available in your country. Ideally, such platforms will have limited coins available for trading. As per your research, find the best exchanges where you can transfer your coins from existing platform. Ideally, the best exchanges will have plenty of altcoins hosted on the platform and will give you higher returns while selling and buying.
In cryptocurrency, you will observe that every exchange has a different buy or sell rate for the same coin.
Also, research some business news that is related to crypto and on the basis of that try to buy, sell or hold coins. When some breaking news like XYZ coin is now listed in ABC exchange, which happens to be a very popular exchange, the price of the coin is very likely to shoot up.
Also recently the news like xyz country has banned the crypto trading or abc bank has suspended accounts are also going to affect the coins but in a negative way. The prices will significantly drop.
Since 2011, cryptocurrency trading has come a long way and the strongest coin till date happens to be BTC. However, a lot of business tycoons still consider this digital currency trading to be a scam, but a lot of people have benefited from this trading and are reaping benefits out of their investments. Find out the ideal time to enter the market when the price is low so that you may benefit in the long run. Don’t enter when the market tends be in a bullish phase or else you might have to incur heavy losses. Plan your investment strategy, analyze any loopholes, and execute it successfully to benefit out of it.