Basic knowledge before starting cryptocurrency investment

Among those, who are considering crypto investor, many of them do not know where to start. This article is a guide for those who will start investing in cryptocurrency.Some sense of selections in the industry that you want to know first.

Cryptocurrency investment has become a popular investment product for investment beginners because it can be easily traded with a smartphone. It can be started from around $1,00. However, cryptocurrencies are highly volatile, so they are high-risk, high-return investment products.

In particular, the market has risen significantly over the past year, and the number of new account openings has increased rapidly on cryptocurrency exchanges.

Differences between bitcoin and altcoins-which currency to invest

As of March 2022, more than 18,000 cryptocurrencies have been created after the invention of bitcoin in 2009. All those cryptocurrencies other than bitcoin are known to be Altcoins. There are a wide variety of cryptocurrencies handled, including popular altcoins, so you can start trading in your favorite currency like bitcoin, ether, litecoin, Salona, dogecoin, etc.

Be sure to invest in what kind of cryptocurrency you are trading, whether it should be held like a lottery, or whether it should be a position analysis exactly. Check the price graph of that currency before investing in it.

How to make a profit with cryptocurrencies?

The basic way to make a profit is the same as a stock, where you can make a profit by buying cheaply and selling high. That means you have to buy the coins when their price is low. And sell it when the value goes high. You will benefit from the price increase at the time you hold the fund. There are two types of trading methods: physical trading and futures trading.

  1. Physical trading is buying and selling cryptocurrencies. You must have a cryptocurrency at hand.
  2. Futures trading, on the other hand, is a way of promising to eventually buy and sell cryptocurrencies.

Differences between sales offices and exchanges

Many cryptocurrency exchange companies offer two types of trading services, exchange format, and sales office format. There are different fee settings, ordering functions, and stocks handled. First of all, recognizing the difference between the two will be of great help to cryptocurrency investors.

  1. However, sales offices tend to have higher purchase prices and lower sale prices than exchanges, with the difference between purchase price and sale price (spread) acting as a substantial commission.
  2. The exchange format is an exchange in which investors trade cryptocurrencies using buy and sell orders. Those who are used to cryptocurrency investment use exchange trading.The operating company provides a trading location called ITK. It mediates the trading parties. The higher the order quantity of market participants, the greater the liquidity, so it is easy to sell when you want to sell. Some companies have introduced negative fees, and if you make good use of them, you will be able to reduce transaction fees.

According to statistics

According to statistics released on the official website by the japan crypto-asset dealers association (java), the domestic trading situation for the following April 2021 was $4,180 million for physical transactions and $4,566, million for leveraged transactions (margin trading, credit transactions, futures trading).

It is popular leveraged trading alongside physical trading, but only a limited number of cryptocurrency exchanges are available. Stocks, trading formats, and ordering tools are also characterized by companies, so check them before opening an account.

First, consider the small investment and dollar cost average method

Bitcoin particularly has high volatility,so it is a rule to level the average acquisition unit price by the dollar cost average method. If you are thinking of starting an investment in the future, it is important to start with a small investment. If it is bitcoin, you can purchase infractions such as 0.001 BTC and 0.0001 BTC (about 40 $: as of July 2021).Some services can automatically invest in reserves from $50 to a certain period. Depending on your investment plan, it is recommended to use these services. If the funds expand to some extent, you may want to consider asset management, such as using lending services to earn rent.

In Conclusion

For those who are about to start investing in cryptocurrencies, we introduced some common tips in the industry that you should know first. Starting with a small investment in bitcoin and using exchanges instead of sales offices lowers unnecessary costs and leads to more efficient investment behavior. On top of that, it is a good idea to have a wide range of strategies, such as hedging with leveraged trading and aiming for additional returns with bitcoin investments in the Bitcoin Era.

Related Articles

Leave a Reply

Back to top button