How to Start Making Money Using Cryptocurrencies – Buying stocks means you will own a tiny amount of companies shares, whether it be Facebook or some other giant business. Trading with cryptocurrencies means you can buy, keep or sell (depending on what your goal is and current situation on the market is). Choose a cryptocurrency and then see how everything moves on the market so you can know when to buy or sell, thus gaining profit. We will give you some advice on how to make money using cryptocurrencies as a tool.
How to Start Making Money Using Cryptocurrencies
Trading as a term makes a lot of headlines, especially in the year of pandemic, where people are searching for different ways to earn money. Bear in mind that trading shouldn’t be considered as an instant way to get some cash, but it’s instead an investment. In this article, we will talk about making money on Forex (foreign exchange), whereas trading cryptocurrencies differs from stock and regular currency trade.
Trading with cryptocurrencies means you can buy, keep or sell (depending on what your goal is and current situation on the market is).
Do you know enough about crypto?
In short, a crypto is a form of digital currency, and it is decentralized, meaning big institutions can’t have an influence on it. The cryptocurrency was created as a form of rebellion (some will say), where you could do anything you want with the currency without being monitored. The first and most popular – Bitcoin, was developed thanks to the technology called the blockchain. Blockchain requires a lot of expensive technology and time since mining one Bitcoin takes lots of time and skill. Different cryptocurrencies came soon after Bitcoin such as Ethereum, Ripple, etc. Bitcoin and Ethereum are top two regarding volatility, but the main difference is that Bitcoin has a limit, and after it hits 16 million, it will stop with its production. That’s what intrigues many people, and why it’s getting harder to mine, since it’s an ever-changing algorithm, while Ethereum has a yearly cap (meaning there is no limit in total).
Having general knowledge about the market
Crypto is decentralized, and it operates solely on the internet, but many factors can influence the value of a currency, whether it’s digital or physical. It would be best if you first research what cryptocurrency suits your personality (yes, and we are talking about money personality, to be exact). Having a look at the top five crypto’s and what are their pros and cons, will give you more options, and it will be easier to decide if you want to invest in something that changes quickly or is relatively stable. You can put your money on it and wait for the right opportunity.
Finding the right broker
It’s essential to have a person by your side that can give you additional information. Of course, you have to open a trading account to start trading, but with it should come a broker that knows what he’s talking about since he/she should be a person that has the experience and much more knowledge in general about the market. That way, you can learn quickly and make safer and smarter decisions once you get into the market. Remember to check if the broker and the company have a licence and a certificate since that will prevent any scams, and it will prove that they certainly are knowledgeable about the topic and will help you along the way.
Buying and selling
When is the right time to buy crypto? When should you sell it? Should you buy it and keep it for some time, waiting for the right move? That’s why we mentioned how important it is to know if you like cryptos that can go up or down quickly, or you are the patient type of trader who will instead put something “on hold”, once you buy it. This is an important thing, so you should sit down and be honest with yourself, so you don’t go overboard once you start trading. This will allow you to be more transparent with your broker, meaning he can come up with a good plan you can follow through. In the beginning, you should work with your broker, but both of you should aim towards you becoming an independent trader, meaning you don’t have to ask for everything. As time goes by, you will be able to see various patterns, thus knowing better when to buy or sell.
You can trade with cryptocurrencies, but don’t consider it as a primary source of income. Consider it as an investment, and treat it as such.