If you have spent a fair share of your time on the internet, then you might have probably heard of terms such as ‘bitcoin’ or ‘dogecoin’ being thrown around.
Now if such terms heightened the sense of confusion within you, then you are not alone. Cryptocurrency is a new wave in the world of technology and finance, and it aims to completely revolutionize the way we think about monetary exchanges.
Crypto Trading – Understanding cryptocurrency
Cryptocurrency is basically a digital currency that is stored in a digital wallet of your choice. Just think of it as your physical money, manifesting itself in a digital form.
Through the use of blockchain technology, cryptocurrency maintains continuity in such transactions, all while ensuring that your money is safe and secure.
There are various types of cryptocurrencies today which make use of their own algorithms, but they all rest on the foundation of blockchain. A few examples would include bitcoin, Ethereum, Dogecoin, Cardano,. More information on these blockchain technologies are found on the Cryptomojo blog
Getting started with crypto trading in 2021
- Create an account on a trading platform – In order to get started with crypto trading, you will first need to set up an account on a trading platform. Kraken is one of the leading platforms in the United States, but you can also make use of other platforms such as Coinbase or Gemini.
- Connect it to your bank account – Once you have your account in place, you will need to connect it to your bank account so that the money can be transferred in and out of there. Wire transfers and debit cards are some of the easiest funding options that most platforms offer to their customers.
- Pick a cryptocurrency of your choice – Once the digital wallet has been placed and connected to your bank account, you will be required to pick a cryptocurrency that you wish to invest in. There are numerous options to choose from, so ensure to strategize while making your pick.
Choosing the right cryptocurrency
As a beginner, choosing the right cryptocurrency can be quite a daunting task. Your best option would be to invest in top currencies, such as Bitcoin and Ethereum.
These cryptocurrencies usually provide reasonable returns, although they too are not free from the volatility of the market. Altcoins, which are basically cryptocurrencies that are not bitcoin is a popular investment option too.
Also referred to as Defi, or decentralized finance, they typically run on the Ethereum blockchain and are used to make a considerable amount of transactions.
Over the past couple of years, both bitcoin, as well as altcoins, have been seeing monumental growth. However, it is probably best if you refrain from investing in smaller cryptocurrencies, since the ROI for such currencies is quite low, and can be demotivating for a beginner.
Crypto trading can be an extremely profitable endeavor if you have the patience and strategizing capabilities needed to deal with such a volatile market. Follow experienced crypto traders and make use of their strategies until you have fully set foot into the crypto world and found the standing. While cryptocurrencies are still seen mostly as a speculative asset, their popularity is growing and hopefully, the returns from them will someday change the financial structure, for the better.