Trading with Cryptocurrencies
Cryptocurrencies are digital currencies, examples of which are Bitcoin, Ethereum, Darkcoin, and many more. Cryptocurrencies are now seen as an investable option and one of the safest modes of payment. In fact, cryptocurrencies started as an anonymous form of payment for online transactions.
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Cryptocurrencies explained
Decentralized currency
The US dollar is regulated by the US government, while the UK government regulates the British pound. Cryptocurrencies don’t have that limitation because cryptocurrencies come from a decentralized system and is regulated globally and managed by people who work behind a huge network of blockchain-enabled computers. Simply put, cryptocurrencies belong to the people from around the world who trade and own them.
Ideal for hedging inflations and risks
The net supply of cryptocurrencies is limited despite many people trading them. This makes them a great asset for hedging inflation. On the other hand, cryptocurrencies cannot be influenced by changes in the world’s economy and politics, making it a great asset for hedging risks.
A great profit potential
The price of cryptocurrencies is starting to surge, bringing with them rewarding returns for both beginner and expert traders. The currency’s high volatility is what attracts millions of investors, making it a profit potential. There is, however, no guarantee of profits, yet it is still seen as a worthy investment.
Accepted worldwide
Since cryptocurrencies are digital currencies, a person can basically carry it with them without being detected. This is also because anyone who can use the Internet can start crypto trading.
Cryptocurrencies are also accepted as payment for goods and services, therefore building its reputation of being a secure mode of transaction for globally renowned companies.
Cryptocurrencies on the market
- Bitcoin is probably the most popular and is among the first digital currencies ever launched in 2009.
- Dash (formerly called the XCO coin and Darkcoin when it was first released in 2014) impressed investors when it got to €460 in value.
- Next to Bitcoin’s popularity is the Ethereum, which has risen to popularity due to having its own blockchain.
- Litecoin is the product of a former Google employee, and was launched in 2011 as a P2P currency.
- Ripple is a cryptocurrency launched in 2012 to help in the facilitation of global transactions. The value is still less than Bitcoin but is popular among people who are looking for an alternative to Bitcoin.
- Monero is a cryptocurrency which isn’t based on the Bitcoin but uses a CryptoNote protocol instead.
Is it the right time to trade with cryptocurrencies?
As an investor who hasn’t delved into the world of cryptocurrency trading yet, it’s perfectly acceptable to become adamant with the idea of investing money in digital currencies. While it’s a new investment option, the cryptocurrency market is exponentially growing, but experts say that it may experience a significant drop in the years to come.
Abeer ElBahrawy from the City University in London shares that the cryptocurrency market can be likened to an ecosystem which continuously diversifies and evolves over time. Today, investing in cryptocurrency continues to be popular due to two known factors.
First, cryptocurrencies prevent unauthorized copying by making transactions as transparent as possible, making it available online for easier comparison. Therefore, one bitcoin cannot be used to purchase two different things.
Second, these ledgers (copies of the transactions) are protected cryptographically. As new transactions happen, the ledgers become updated regularly, but not without first encrypting and freezing the first ledgers to prevent any form of unauthorized alteration from happening. The new version of the ledger — the block — now contains the encrypted first ledger and can only be checked by generating a number. However, this number is extremely difficult to generate, and even so, one can only check the ledgers, but not copy it.
The continuous update of ledgers results to a chain of blocks, which is the blockchain technology most cryptocurrencies are known for. Elbahrawy examine about 1,500 cryptocurrencies and found that 600 of these cryptocurrencies are actively being traded today. Cryptocurrency day trading continues to become popular, and now the market has grown to an amount of $54 billion.
Bitcoin, for example, has aspects that allow it to remain stable, hence bitcoin trading continues. However, experts identified some technical limitations in Bitcoin, which led to the creation of other cryptocurrencies, such as Ethereum and Litecoin. Although these are still worth less than Bitcoin, the cryptocurrency market became diversified, which may result to the Bitcoin market share failing. Experts even predict it to fluctuate around 2025.
It is important to consider these factors, because it’s possible for the values of today’s cryptocurrencies to drop after a few years. If you’re thinking of investing your money in digital currencies, the best time to do it would be now, while these cryptocurrencies are still on their way to exponential growth. The reason is because more cryptocurrencies are going to be launched, and there isn’t telling if it’ll affect the value of today’s cryptocurrencies.
How to Start Trading with Cryptocurrencies
Cryptocurrency trading for beginners can be daunting at first to learn, but good thing articles like this one are written to help guide them to the right path. You’ll need to familiarize yourself with a few things, and you’re good to go.
The first thing you want to do is to become familiar with cryptocurrencies and what they’re all about, as well as the basic concepts associated with them. Note that one cryptocurrency is different from another cryptocurrency, the same way Bitcoin functions differently from Ethereum. You need to understand that cryptocurrency is more than just digital numbers that people use as an alternative for physical money. The blockchain technology mentioned in the previous section is what makes Bitcoin, Darkcoin, Litecoin, and other cryptocurrencies safe against the control and manipulation by a single source. Transactions made with it are essentially error proof, making it attractive to most investors.
It may seem like an overwhelming task to learn all the technical jargon associated with cryptocurrencies, but if you’re interested in day trading cryptocurrency, bitcoin trading, and earning profits from crypto trading, then you’ll know that all these are worth learning.
The second step is to choose a broker that will help you get through the basics of trading cryptocurrencies. In this article, you’ll find a top list presenting the most popular and reliable brokers on the cryptocurrency market. Once you sign up, you won’t have to tire yourself trying to manually learn about the steps before you start trading. Many of these brokers offer investors the chance to create dummy accounts first, which is perfect for beginners who are just about to try their hand at trading using a cryptocurrency trading platform. These platforms also feature not only the cryptocurrencies but also other trading products that investors might be interested to try.
Because there are thousands of brokers out there who all claim to be of great service to investors, it’s important that you get an idea of which brokers are reliable and trustworthy when it comes to cryptocurrency trading (bitcoin trading, etc.). On Binaly.com, you’ll not only find information about binary options and cryptocurrencies, but reviews of the best ranking brokers as well. The reviews contain summarized information on the broker, from its physical office address, to the different currencies and deposit options. It’s best to make your decision based on the most important information on these brokers to see if it fits your needs and preferences.
How to Choose the Best Broker for Cryptocurrencies
Because cryptocurrency trading continues to bloom, more people are joining the cryptocurrency market due to its lucrativeness and security. If you’re a beginner who wants to learn about bitcoin trading how to, yet don’t know where to start, the best option is to look for a broker.
There are thousands of brokers across the cryptocurrency market, but the most popular ones can usually be found online. As an online guide, our content at Binaly.com only contains the best brokers there is. These brokers are sure to help traders with their investments, depending on the interests and preferred currencies of the trader, of course.
This section serves as a guide for beginners on how they should select the best broker for their cryptocurrency trading needs.
Learn about cryptocurrencies and learn about your needs as a trader
It’s important that you at least learn about the basics in trading, which is essential in determining whether a certain broker will help you generate profits. Do you need a broker with a lower deposit amount? Or do you need a broker that offers customer support through phone calls rather than tickets? Do you need a broker that accepts electronic payments in their deposit options?
Note that all brokers have their own strength and witnesses but rest assured that the brokers you’ll see at Binaly.com are experienced and reliable in the cryptocurrency market.
Prioritize safety
As a trader, it’s important to hire a broker that’s trustworthy. All brokers we have listed in Binaly.com has a valid license, issued by at least one national authority. As it looks today, many of the brokers we have listed there hold licenses issued by Cyprus, and all have a valid EU license with them which allows them to operate across all EU states. As a consumer, you will have the same rights as every other EU trader. Hence, it’s important to consider the licenses when looking for a cryptocurrency broker.
In summary, all brokers — as long as they’re licensed — are equal depending on your purpose for signing up with them. All brokers in our site are safe to deal with, and traders are invited to sign up with them once they select which ones are best for their needs.
The benefit in signing up with different brokers is that they often offer trial, therefore allowing traders to learn what is the bitcoin trading platform best for their needs before investing actual money in it. Note that although some brokers offer demo accounts for cryptocurrencies, some don’t. The advantage of demo accounts is it makes traders familiar with the platform before actually investing their money. This is a safe, simple, and fun way to you.
Why Should You Get Involved with Cryptocurrencies?
There are a couple of reasons why investing in cryptocurrencies is a smart choice, aside from the fact that it’s continuing to grow. Here are the advantages of bitcoin trading UK and trading in other cryptocurrencies.
Fraud
Giving out your credit card information to merchants poses a risk for identity theft, giving hackers full access to your credit card. Using card payments use a “pull” mechanism, allowing merchants to “pull” a corresponding amount from your credit account. Cryptocurrencies, on the other hand, use the opposing, “pushing” cryptocurrency holders (that’s you) to only send the amount needed without any other information included.
Universal Access
Most people nowadays can access the Internet through different devices. The majority of Internet users haven’t been on a traditional exchange system, which makes the cryptocurrency market an advantage. Now, having your own Bitcoin wallet can be easy as installing an app installed from Google Play or App Store.
Immediate Settlements
When you purchase property, for example, you will need a middleman in-between you and the seller. This might cause additional fees, delays, and even unexpected difficulties. Using cryptocurrencies as a form of payment only requires a few steps, an example of which are Bitcoin contracts that allow users to remove third party approvals, and even allows for future settlement.
Affordable Fees
Most cryptocurrency transactions do not have transaction fees because networks often compensate miners. There are, however, third party services like Coinbase, which act the same way as PayPal that manages online exchanging systems. This means there will likely be fees, but it’s safe to say the fees aren’t extravagantly priced.
You are the owner
This is the most important advantage of having cryptocurrencies; as long as you have it in your wallet (e.g. Bitcoin wallet), it’s yours. Your account isn’t and shouldn’t be owned by anyone else as well.
PayPal, for example, has the power to freeze your account without informing you, even if your account has been hacked. With cryptocurrency, you have a private key in your possession, in which you have your cryptocurrency address. Unless you lose it yourself, this key is yours and yours alone.
In addition to these advantages, cryptocurrency trading is fairly easy to learn, and allows you to use more than one currency simultaneously. There are many things required before you can start trading at the stock market, but with cryptocurrencies, you can start trading right away as long as you have access to the Internet. Lastly, there are demo accounts that lets users become familiar with the different platforms and cryptocurrencies before taking the plunge.
Where and How to Purchase Cryptocurrencies?
Before you get to signing up with your first broker, it’s important to know where and how you will be able to purchase cryptocurrencies.
If you want to start looking for a bitcoin trading platform, you need to know that you have several options when purchasing cryptocurrencies.
First, you can use the “classic” way where digital currencies are treated as traditional investments. This means buying coins and keeping them until their value rises before selling them back to the market.
The second way is to directly sell your cryptocurrencies to other traders. This, however, should be approached with caution to prevent faulty transactions. If it isn’t from a reliable person (e.g. friend, business partner, family, etc.), it’s better to stay with the first method.
Lastly, you can buy cryptocurrencies as underlying assets, or as a financial instrument. There are many brokers that offer buying and selling of Bitcoins and Ethereum as a pair, similar to the traditional forex trading.
Here are two ways on where you can purchase cryptocurrencies:
Brokers
Brokers are usually the go-to when it comes to purchasing cryptocurrencies. Brokers offer opportunities for investing in Bitcoin and other types of digital currencies. Some even accept Bitcoin as payment. In other words, brokers handle the buying and selling of your cryptocurrencies, and you’ll only have to reap the profits afterwards.
Instead of doing a search on Google, you can get a list of the top brokers that offer cryptocurrency trading at Binaly.com. You’ll also find reviews and ratings to help you choose which one is best for your needs as an investor.
E-Wallets
For people who are still hesitant to sign up with a broker, the next best option is to use e-wallets. These are tools which may come in digital formats, such as smartphone applications or websites. PayPal is an example of an e-wallet, although it doesn’t do cryptocurrency trading. It does work the same way, however.
Note that not all e-wallet services are the same; some will allow you to sell cryptocurrencies while others can only be used for storage. There are also others that allow you to buy and sell, but don’t have storage features.
Example of e-wallets that can be used for cryptocurrencies are BitcoinWallet (one of the oldest but easiest options for beginners), Coinbase (most popular choice among investors), and Blockchain.info (one of the largest services where cryptocurrencies can be used as payment).
This simple guide is not meant to turn you into a day trading cryptocurrency master, but rather to give you a look into the basics of cryptocurrency trading. Note that to generating bitcoin trading profit isn’t an overnight event, but rather something that should be learned and invested time with. For more information on cryptocurrency trading and cryptocurrency brokers, you can read more at our website: Binaly.com.