Do you have some extra cash on hand? Are you looking to make an investment that is both convenient and profitable? If the answer is yes, then let me introduce you to Crypto trading. Crypto trading allows you to make potentially enormous profits from the comfort of your own home, similar to roboadvisors.
As if that wasn’t enough, you can do Crypto trading from anywhere in the world, and at any time you choose. If you thought the stock market was convenient, this should make you ecstatic. That is because the Crypto market, unlike the stock market, never sleeps. So, your time zone isn’t an issue either. Thousands of people in the world have made huge profits by doing Crypto trading online. That’s one of the many reasons it’s become so popular today.
What is Crypto Trading?
Crypto trading, also known as cryptocurrency trading, is the exchange of cryptocurrency. This is a digital form of currency – meaning that it only exists in not physical but electronic form. Encryption techniques are used to regulates how the units are generated.
Hence, instead of paper or coins, you have a virtual currency that, in crypto trading, you can use as a medium of exchange.
As we discussed earlier, the crypto market never sleeps. This means that cryptocurrency is always available to buy and sell.
Another trait of cryptocurrency is that it’s highly volatile. This means that its price goes up and down regularly. This is the quality that makes it potentially very profitable. You can buy a share cheap and sell it expensive when the market goes back up.
However, this trait is also the challenge of Crypto trading. If you do not time your purchase and selling correctly, you can incur a substantial loss by trading for a lower price than you initially invested.
Many types of cryptocurrencies exist. Some of the most popular ones are:
Even people who have no idea about crypto trading have heard of bitcoin; such is its popularity. Ironically, it’s not that old. It was created in 2009. It operates without any bank or authorities at its center.
This is made possible by its use of peer-to-peer technology. Bitcoin uses the blockchain. Blockchain is a vast distributed database that exists on many computers and is connected in a peer-to-peer network.
Similar to bitcoin, Litecoin has no central authority. It is also a peer-to-peer cryptocurrency. Although not as popular as bitcoin, it processes transactions every 2.5 minutes. In contrast, bitcoin does this every 10 minutes, making it four times faster.
This speed is thanks to its use of Lighting Network along with other improvements. It was created in 2011, so its newer than bitcoin and was designed to be quite similar but with higher speed, which is precisely what it is.
Ethereum is also a blockchain-based cryptocurrency. It was released after Litecoin but is more popular today. Ethereum also has no central authority. It’s the most used cryptocurrency after bitcoin.
Ethereum is also quite fast. This is due to its digital ‘if-then’ agreements as well as smart contracts.
Is Crypto Trading Profitable?
The direct answer is yes, Crypto trading is profitable.
Firstly, the Crypto market is free. There is hardly any regulation. Although this makes it vulnerable to scams, it also makes it potentially more profitable. If the market goes down, it doesn’t freeze. This keeps it volatile since you can take advantage of the lower prices.
Secondly, it’s easier to predict if you work cleverly. Highly funded institutions and full-time professionals don’t dominate the crypt trade. Owing to the unwise decisions of others, you can take advantage of drops in price and volatility.
Lastly, there are multiple exchanges for Crypto trading. This means that the price of the same cryptocurrency can vary from one platform to the other. This allows you to use a strategy called arbitrage. This is when you buy a share cheaper from one exchange and sell it immediately on another exchange where the price is higher.
Is Crypto Trading Legal?
Many countries still have no laws or regulations regarding cryptocurrency. Some that have said yes either directly or indirectly include the US, Canada, Australia, and the European Union. It is estimated that cryptocurrency, specifically bitcoin, is legal in 111 countries.
However, some nations that have rejected cryptocurrency include Russia, China, Vietnam, Bolivia, Columbia, and Ecuador.
How Much Do You Need To Get Started?
Now that you’ve understood Crypto trading in significant depth, you might be wondering the cost of getting started.
There isn’t a specific arbitrary figure of precisely what it costs to start. However, a general guideline does exist: Invest as much as you can afford to lose. Because although potentially very profitable, like any investment, crypto trading can be risky.
There are minimum deposits for the brokers that you use, which have been mentioned in the list above. They range from $1 to $250.
Traps To Avoid When Crypto Trading
As with most financial operations, there are certain things you want to look out for a while Crypt trading. Let’s discuss some of these main traps.
This scam is named after an Italian scammer by the name of Charles Ponzi. The Ponzi scam is to promise investors huge profits and then disappear with the money that they trustfully invest.
The way to avoid this scam is simple, although it’s tempting to fall for it. If a project offers you 10% returns a year or more, you could be better off steering clear from it.
This is when an exchange artificially drops the price of your cryptocurrency and takes up the profits. The market will seem to drop drastically and rise back after you’ve incurred a substantial loss. Hence, avoid having stop losses registered with the platform you’re using.
This is when exchanges allow you to trade coins but sell them elsewhere. You might think you’re purchasing, but you’re just giving your money to them. When too many withdrawal requests accumulate, the exchange simply shuts down.
To avoid the exit scam, withdraw your funds regularly and put them in an off-exchange wallet, leaving no large sums on the exchange itself. Don’t use exchanges that don’t pay you fast.
How Do You Trade Crypto?
To trade cryptocurrency, like any other currency, you watch the market, analyze the stats, and make a decision and then invest. You can also use crypto trading robots for the purpose as crypto robot trading is considered a better way to do crypto trading.
However, this is the most critical question and hence deserves a comprehensive response.
Therefore, let’s go step by step to make sure you understand everything you need to know to embark on this profitable journey!
Finding Good Brokers For Crypto Trading?
Now that we’ve covered what brokers are, let’s talk about what you should be looking for in a broker.
You will find that the price of the same cryptocurrency will vary across different brokers.
This is because the commission that the platform charges you will also be included in the price. Therefore, compare the cost across different brokers to make an informed decision.
The site (or app in certain situations) needs to have an interface that is user-friendly and easy to use.
Brokers simplify the process of Crypto trading, and the interface shouldn’t be an exception. Ensure that the design is simple and straightforward for carrying out all sorts of operations that you will be regularly, like purchasing.
We will go over some of the most well-known brokers in just a while.
The reputation is essential because you want to make sure that you don’t lose your cash to a platform that’s there one day and gone the next.
Variety of Currency:
Most good brokers offer not one or two but several different cryptocurrencies.
This is especially important if you plan to trade multiple currencies, such as the top ones mentioned above. Therefore, choose a broker that has a wide variety.
There is a fee charged when you make purchases.
This varies from one platform and one payment method to the other. It can be up to 5%! So, select a broker that charges less to make each of your trades more profitable.
Forex Brokers for Crypto Trading
The first thing you need to learn about is brokers. Brokers are essentially platforms that allow you to convert your local currency into cryptocurrency, and the other way around.
This is very similar to currency exchange booths at airports. Brokers allow you to buy and sell cryptocurrency at a specific price.
Speaking of such platforms, there are also exchanges for cryptocurrency. However, brokers have numerous advantages over them.
Signing up on an exchange is a long and cumbersome process. Sometimes it can even take weeks and months. But with brokers, on the other hand, it can be set up in a matter of minutes.
You are also more likely to find lower and less fluctuating prices for cryptocurrencies, especially bitcoin, on a broker than an exchange. This also makes brokers easier to use since there is a fixed price instead of price charts and order lists that regularly get refreshed.
Lastly, if you want Crypto trading to be more of an individual process without any arguments or interactions, brokers are the way to go. This is because an exchange is peer-to-peer.
Meaning, you buy and sell from fellow crypto traders. With a broker, you buy the value of the currency from the platform itself.
Best Broker For Crypto And Why?
If you’re worried after going through the criteria that you’ll have to analyze every broker on the internet before choosing one, don’t worry!
Here are the six best Best Crypto Brokers along with their details, to give you a first helping hand.
eToro is a trading company well known as a broker for cryptocurrency. It’s been in operation since 2007. It has a wide variety of top cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, XLM, XRP, Dash, and Litecoin.
One of its essential features is that you can follow and copy other traders as well. This can be helpful for beginners, who can follow more experienced traders to learn their strategies.
It’s also user-friendly, which, as we discussed, is a crucial quality.
The minimum deposit to start trading on eToro is $250. There are ten different payment methods, including PayPal. It executes operations almost instantaneously.
eToro also offers a demo trading account where new traders can experiment with strategies without losing any real money.
Furthermore, signing up is a quick and easy process. There are mobile apps available on both iOS and Android for added convenience and trading while on the go.
Lastly, there is excellent customer support.
Binance is a leading crypto trading platform that offers over 100 different cryptocurrencies, including BNB, Bitcoin, Bitcoin Cash, Ethereum, Ripple, and Litecoin. Binance has received several positive reviews and has users from all around the world.
There is are two interfaces: basic and advanced. Using the basic mode, you can take a quick look at the market, whereas the advanced mode gives you access to an advanced charting tool.
Binance has desktop applications for both Windows and macOS and mobile apps for both iOS and Android for the highest convenience and versatility.
They have a community where you can discuss things with other crypto traders, a blog, and around the clock customer service.
The minimum deposit is minuscule at only $1. There is also two-factor authentication for better security.
Coinmama is another leading broker for cryptocurrency. It is used by over 2.1 million people across 88 countries since 2013.
It also has a wide variety of coins available, including Bitcoin, Ripple, Ethereum, Cardano, Qtum, Ethereum Classic, Bitcoin Cash, and Litecoin.
Coinmama offers customer support via email in addition to having a full help center.
It’s known to be safe and secure. The interface is straightforward and easy to use.
The minimum deposit is low at $60, and payments can be made using multiple methods such as debit cards, credit cards, and bank transfers.
It’s quick to set up and start trading. Purchasing is done instantly with no need to place a deposit and wait. Simply order and get your digital currency.
What do you do when you have over 9 million clients across more than 140 countries using your platform? You create a subsidiary platform. At least, that’s what eToro did. eToroX is its subsidiary platform to handle the vast number of crypto traders using their services.
eToroX comes with some significant changes.
Firstly, the minimum deposit is much lower at $10.
eToroX has apps for Android and iOS for your on the go trades.
Another advantage of eToroX is that it’s merely a crypto trading platform. Whereas eToro offers several other investments like stocks and commodities. Hence, eToroX has all the cryptocurrencies that eToro has but many more as well.
Furthermore, eToroX offers a crypto wallet in which you can store your digital coins.
This is one of the biggest companies for crypto trading around the world. Coinbase has over 30 million customers and supports over 100 countries. It supports many cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Orchid, EOS, Tezos, and more.
They have an excellent reputation and a user-friendly interface, which makes it suitable for novice crypto traders.
They have a mobile wallet for both iOS and Android, which contains private keys that only give you access to your funds.
They have a dedicated plugin to support accepting cryptocurrencies on their website.
The minimum deposit is tiny at only $1.
It also comes with two-factor authentication for added security.
Bitpanda is one of the excellent platforms for Crypto trading with a variety of cryptocurrencies, including Bitcoin, Ethereum, Ripple, Ethereum Classic, Bitcoin Cash, Litecoin, IOTA, Dash, EOS, Stellar and many more.
It was launched in 2014 and rapidly grew. It is now Europe’s leading broker for cryptocurrencies.
Bitpanda’s interface is straightforward and easy to use.
The transactions are processed immediately, and the service is quite fast. There is a customer support team that responds timely.
The minimum deposit is just $1.
There is a wide range of payment options such as credit card, debit card, SEPA, Skrill, bank transfer, GiroPay, and many others.
It’s also said to be an excellent platform for beginners.
By now, you must be well aware of Cryptocurrency trading: its concept, legality, profitability, and crypto trading brokers. Most importantly, you have a comprehensive, step by step approach to get started!