What is crypto trading?
The world around us is constantly changing. Even things we thought would always exist can suddenly disappear. What about money, for example? For centuries, this has been the most used and most important means of payment known to mankind. In recent years, however, it seems that slowly but surely this is changing.
More and more crypto currencies are appearing on the market, of which Bitcoin is by far the best known. In recent years, more and more shops and businesses have been accepting them as a means of payment. Crypto trading is therefore very popular especially among young online trading investors. But what exactly is crypto trading and how does it work? Read all about it below!
What are crypto currencies?
First of all, it might be good to know what exactly crypto currencies are. After all, if you want to know the trade, you also need to know what exactly is being traded. Crypto currencies are intangible digital coins that represent a certain value. Although they have been around for quite a long time, since 2008 to be exact, they have only become really popular in the last few years. This is because their value continues to grow and slowly but surely it looks like they will be used as a means of payment, especially for quick internal transfers. By far the most well-known digital currency is Bitcoin. It is also is the most valuable. All other coins are called altcoins (alternative coins). There are already quite a lot of them and they are expected to grow even more. New crypto coins are still being created every day.
Investing in crypto currencies
The buying and selling of crypto currencies is called crypto trading. In essence, it’s a type of Forex trading, but more more risky due to the price volatility which cryptocurrencies tend to carry. When something is very popular, trading it occurs automatically. If you really wanted to make a lot of money, you would have had to invest ten years ago. Compared to 2009, Bitcoin, for example, has become 2500% more valuable. However, there could still be the chance for a profit.
For example, it is quite possible that the value will continue to rise and that your coin will become more valuable as a result. You can also look for certain altcoins that are still quite small, so you can get in with little money. When you decide to invest, it is always a good idea to spread your chances.
Trading crypto currencies pairs
Crypto trading can be compared to exchanging money. When you go to a country with a different currency, you have to change money, which is cheaper one day than the other. Both currencies change in price. When you want to trade in crypto currencies, you actually exchange different crypto currencies with each other. For example, if you want to trade altcoin for Bitcoin, one day it will be cheaper than the other. The trick is to trade at the right time and to exchange one coin for another at the right price. For example, buy bitcoin at a low price using your ETH cryptocurrency and sell it again at a higher price. Put the difference in your pocket. If you are good at this, you can make a lot of money. However, you also take a lot of risk, as the value of crypto currencies rises and falls rapidly.
