Investing in financial instruments is a decision that many people make today, for different reasons. A lot of people are looking for passive income, such that they can earn some money on the side, some are looking for financial security as they grow older and so many other reasons. For years, most of the investment vehicles that people used were limited to traditional financial investment assets, like the stock market, REITs, the forex market and so on. Today, however, there is a lot more that you can do towards this end. Many people are looking at cryptocurrency to enable them to achieve their financial investment goals.
Indeed, at CoinCheckup we recognize this need and encourage those who are interested in cryptocurrency to learn as much as possible so that they can take advantage of the market and reap good returns. Unlike other investment instruments that are loaded with red tape and many other constraints for investors, the crypto market is open to any and all investors. You have a lot of investment opportunities that you can take advantage of, you just need to ensure you have the right resources.
Trading in Bitcoin
You are already aware of some of the benefits and features of digital currency. Bitcoin is one of these currencies. A lot of the transactional features of cryptocurrency are similar to the features of fiat currency like the Euro and Dollar. However, cryptocurrencies exist in a decentralized environment. The idea of decentralization means that there is no control from a government or a central bank. Therefore, this is a market that is driven by the demand and supply needs of the community involved.
When you are trading in Bitcoin, in essence, you are performing a forex transaction. You are exchanging a certain currency for Bitcoin. If you have an investment portfolio of real estate, foreign currency, and any other financial instruments, you can add cryptocurrency to your portfolio. While other markets are operated within a specific time schedule, the cryptocurrency market is open 24/7. This means that you can tap into its potential and earn some good returns whenever you can.
Naturally, most of us cannot stay awake 24/7 to invest in the cryptocurrency market, and it is because of this reason that it makes sense for you to consider trading bots that perform all the transactions on your behalf. There is a lot of potential for you if you learn how to trade cryptocurrency the right way.
Investing in cryptocurrency is a process where you trade in assets that are protected through cryptography. The beauty of such transactions is that the transacting parties can engage one another without the need for a third party. Third parties like central banks often drive up the cost of transactions. This is one of the challenges that the cryptocurrency market is trying to tackle.
Without a central body monitoring the transactions, so how do the participants ensure they are protected? All cryptocurrency transactions are recorded in a public ledger. This gives both users an element of security as they go about their business. This is perhaps one of the things you need to be aware of when it comes to the cryptocurrency industry, all transactions are recorded in a public ledger, meaning that they are open and transparent to anyone who chooses to verify or confirm. That being said, however, these transactions are encrypted such that the nature of the transactions remains anonymous, for the safety and security of both parties involved.
The Nature of the Cryptocurrency Market
When we talk about cryptocurrency or the blockchain, a lot of people limit their discussions to Bitcoin. This makes sense because it was the first widely known cryptocurrency on the blockchain, and has since been synonymous with developments and advancements in the market. However, there are many other cryptocurrencies available. In fact, there are thousands of currencies in the crypto world that you can invest in. Some of the popular ones include Stellar, Ripple, Ethereum, Caradon, Libra and so on. Some cryptocurrencies even exist as forks of the major currencies.
This market works in the same way that the normal forex market works. You buy and sell different cryptocurrencies in exchange for other currencies. You can exchange your crypto assets for fiat currency, or exchange them in kind for other crypto assets. For example, you can exchange Bitcoin for some dollars or Bitcoin for Ethereum and vice versa as long as you are making your profits, you should be good to go.
While this is one of the most volatile markets in the world of business, it can also be the most rewarding investment market ever. For example, those who adopted the Bitcoin business model in the early stages purchased Bitcoins for a few cents for every Bitcoin. The investors who held onto their Bitcoins for a few years ended up selling them for thousands of dollars a coin at the time when Bitcoin was at its peak.
The secret is to try and monitor the market well enough such that you can tell when the trends are in your favor. In this market, things change so fast and for that reason, you have to be proactive.
You need to be armed with credible information all the time. From speculation on social media to trends on Google, knowing what’s going on in the world of cryptocurrency makes a big difference. By default, as an investor, your aim is to buy the cryptocurrency when their values are low, and sell them when the value increases. This is how you make your profit.
Traditionally, you have to purchase cryptocurrency through an exchange. To do this, you would have to buy the coins and store them in an offline storage facility or a digital wallet. However, this can be quite a challenge, hence a lot of investors these days prefer to trade through contracts for difference, also known as CFDs. This is done through brokerage firms, such that you do not purchase the cryptocurrency itself, but instead, you invest in the possibility of the price changing, without necessarily owning the currency.