Is It Worth Trading Cryptocurrency? – Your Decision-Making Guide
Cryptocurrency has been out in the open for years already. Although the entire world may not be knowledgeable about this innovation, most developed and developing countries are aware of this virtual currency concept. It has the convenience of availing goods using a digital currency platform, which you can exchange for other existing currencies. But, with the trends and tendencies of technology nowadays, is it worth trading cryptocurrency?
First thing’s first: any investment has a level of risk written all over it. For example, Bitcoin began as a currency from the dark side of the web. It transformed and shifted into mainstream digital space and attracted traders and investors to risk financial investments. The expansion began, and more currencies emerged in the industry.
While it is difficult to predict how cryptocurrency trade will pan off in the next years, it has its share of advantages and benefits. If you are up for a thrilling ride, this is the investment ideal to chase for a significant profit margin gain.
The risk you want to take
Like the stock market trade, trading cryptocurrency entails a lot of speculation and analysis to adequately manage your risks. The worst-case scenarios that can happen to you are a massive price drop you are not ready for, getting your account hacked, and losing all your investments. It is essential to know what you are getting into, especially if it involves your hard-earned money.
In a nutshell, trading cryptocurrency is like being on a roller coaster ride. Bitcoin, one of the earliest exchanges in the bunch, has hit significant highs and dramatic slumps on its entire existence in the market. It proved to be a competent player, though, because it bounces back and provides a better profit than the last time. That led to Bitcoin becoming the first digital asset recognized for its legitimacy.
Now, more investors see the potential of cryptocurrency being the next leader of monetary transactions. It can even take over the world’s known physical banking systems. The progress of cryptocurrency might vary from one location to another, but it has promising growth to offer its clients. It all goes down to your financial capacity and confidence to take risks.
The investment options
One of the ways to invest in cryptocurrency is to get an online broker. You have to remember that it is a more volatile industry to put your finances, unlike the stock market. Once you find a company that offers cryptocurrency investments in their lineup, all you have to do is deposit a sufficient amount of funds and buy the likes of Bitcoins. Eventually, you can take a look at the trends and speculate on the forecast. It will help you decide whether you're doing a short or long position.
There are several trading platforms you can use to invest in cryptocurrencies. Check these recommendations and choose for yourself:
- eToro – This is one of the more popular trading platforms today. It allows you to trade among in-demand cryptocurrencies because of its list of coins in the bag. Some of them include Bitcoin, Dash, Litecoin, Ripple, and Ethereum. eToro also gives you the opportunity to study professional portfolios and explore these traders’ strategies. That lets you review your decisions and make wise adjustments.
- Coinbase – This platform is a convenient and safe space to manage your virtual currencies. You can easily use your debit card or bank account to pay for your coin purchases. Coinbase requires you to create an account, verifying it for security, and go straight to dealing with your cryptocurrencies. It also has a mobile app that's user-friendly and handy.
- BitcoinIRA – This option boasts a self-trade feature that allows you to make any transaction on every significant market movement on cryptocurrency trade. It also needs you to create an account and transfer funds before trading your digital assets.
As an investment tool, trading cryptocurrency has its advantages over traditional investments. No worries, you can always have both. It is only necessary to check the edge of this modern innovation because it serves you great benefits in the long run.
Currencies like Bitcoin are one of the most liquid investments today. Liquidity matters because you can conveniently trade and transact using cryptocurrency without having to shed a considerable amount of fees. The high market demand lets you invest both in short-term and long-term visions.
Because regulation is in the works, there is a lower inflation risk in trading cryptocurrency. It also has a blockchain system that ensures your money's value consistently. The newness of the industry gives you a chance to have massive gains because of the swings in price. You can take advantage of volatility if you have the financial brains.
As you know, having strengths means having weaknesses, too. The advantages of trading cryptocurrency may also come as their challenges. The rapid and constant change in the market may take you by surprise, especially if you're new to the concept of trading. So, keep your eye on the account and ask for a consultation if necessary.
The risk of hacking follows the convenience of digital-based transactions. You have to be careful when using mobile apps as there is little to no regulation yet if you go after your money. Speaking of lack of law, you are prone to malpractice and fraud because no government taxes are imposed. Lastly, only a few merchants accept cryptocurrency as a legitimate way to pay for goods or services. Learn more about trading cryptocurrencies here!
Knowing if trading cryptocurrency is worth it lies upon your beliefs and principles on financial investments. Whether you believe that cryptocurrency is the future or not, your liquidity and capacity come first. Of course, you can only spend what you can give. This article has provided you with all the necessary information you need, so be sure to make the wisest decision!
UPDATED April 5, 2021
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