In the year 2018, the percentage of cryptocurrency adopters doubled in the US alone. Despite losing 60% of market cap, cryptocurrency is still working its way into the mainstream and speculation is steadily turning into adoption. The number of ICO/STO projects in 2019 is merely 9% compared to 2017, as the market moves beyond the initial FUD toward growth and maturity.
There has been no better time to get into cryptocurrency and we have put together a guide for the absolute beginner. Here’s everything that you need about Crypto Trading to get started. Ready to dive in and learn more?
What are cryptocurrencies?
Cryptocurrencies are a medium of exchange and a store of value. They can be used to settle financial transactions, as an investment instrument, and they are the future of the global economy as we know it.
What makes cryptocurrencies unique is that it is an improvement over existing fiat currencies because of decentralization, transparency, privacy, and ease of use. Just like the popular phrase “Bank the unbanked”, cryptocurrency transactions are faster, cheaper and peer-to-peer. With no middle man, there is no involvement of a centralized authority which makes it ideal for outward remittance, P2P exchange, and trade.
Cryptocurrency vs Fiat: For better or worse?
Why do you need cryptocurrencies?
Lack of trust
If there’s one thing that we’ve learned from the Global Recession of 2009, it is not to trust financial institutions with all our money. Cryptocurrencies solve this problem of trust through a trustless network that is decentralized. You don’t need to place trust in a person or an institution – just in the technology and the network. All transactions are recorded in a distributed ledger that can be accessed by any device connected to that network. Beside storing and exchanging value, you can also use cryptocurrencies to fulfill deeds or contracts through third party smart contracts on the blockchain.
Your funds and assets are back in your control alone. With no intermediaries involved, it is easier to access and move your assets and funds. The only implication here is that you are also responsible for the security of your funds. As long as you keep your private keys safe, you are in control of it all.
Cryptocurrencies are global and digital. They can be transferred and accessed to and from anywhere around the world. Connect to the network and you can send and receive cryptocurrencies in in as much time as it takes to process the transaction. This gives the unbanked or under-banked an opportunity to send and receive funds without the hassle of traditional banking.
Any place, Any time
Cryptocurrency transactions can be made at any time of day, anywhere you go, as long as you are connected to the network.
Who runs the Bitcoin Network?
Bitcoin and other cryptocurrencies were ingeniously crafted with a network and consensus mechanism. Every transaction initiated in the network runs through miners who add new blocks to the blockchain. Their effort is rewarded with a miner’s fee which is a part of the network fee that you pay for every transaction. It is the miners that keep the network secure and running.
Apart from a miner, a consensus mechanism is employed as a means to mitigate the risk of an attack/ theft in the network. The consensus mechanism makes it nearly impossible and very expensive for miners, or anyone else, to exploit or steal from the network.
Which cryptocurrencies should you buy and where from?
The rule of thumb to follow before buying any cryptocurrency is – Invest only what you can afford to lose. This is vitally important for your financial health. Next, do your research and know everything there is to know about the cryptocurrency that you want to invest in. Websites like CoinMarketCap.com, Binance Academy, informative blogs on Medium, and of course, Crypto Trader News, are a good place to get started.
Remember not to put all your eggs in one basket. Diversify your portfolio. Do not get influenced by pump and dump schemes, and only buy into projects that have strong fundamentals, like their history, development team and legitimate partners.
You can buy cryptocurrencies using fiat on your local cryptocurrency exchange. Some popular ones include Binance Jersey and Coinbase where you can pay using Visa or MasterCard. Once you have bought cryptocurrencies, the next step is to secure it before you begin trading.
How to secure your cryptocurrencies?
Exchanges are not the No.1 place for your crypto holdings! Just like you store fiat currency in a wallet, cryptocurrencies can be stored in online wallets for securing against a theft or hack. In general, make a habit to only keep the amount of cryptocurrencies you are actively trading with on an exchange. It is advisable to move the rest of your crypto assets to a hardware wallet like a Ledger Nano S or a Trezor One.
How to get started with crypto trading?
You can get started by checking exchanges and their order books. Exchanges with high volume and filled order books are efficient and faster than others. After checking reviews for cryptocurrency exchanges, pick a reputed and transparent exchange and sign up. Submitting Know Your Customer (KYC) details is mandatory on most exchanges before any trades or withdrawal of funds can take place. This ensures the safety of your account. How in-depth you want to be with your personal information may also determine the amount you can trade or withdrawal within a given time period.
Place your first buy/sell order and trade consistently to test and improve your trading strategy. Before moving on to leverage/derivatives trading, make sure to read all related blogs and FAQs; watch related videos to guide you through the process.
There is a lot to learn from Technical Analysis. Tradingview.com is a recommended place to start. After getting comfortable with reading technical charts and identifying candlestick patterns, follow your instincts and predictions into the next successful trade.
Cryptocurrencies are volatile assets and investments in cryptocurrencies are subject to market risk and volatility. The more you learn the more informed your decisions will be when starting your crypto trading journey.
Content provided by CryptoTraderNews is for informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. All information is of a general nature. As always, there is risk with any investment. In exchange for using our products and services, you agree not to hold CryptoTraderNews Pro, its affiliates, or any third party service provider liable for any possible claim for damages arising from decisions you make based on information made available to you through our services.