The prices of cryptocurrencies change erratically, and perhaps surprisingly this is actually a major attraction for investors looking to trade cryptocurrency. If you make accurate projections, you can earn exceptional returns within a very short while. However, certain cryptos are not volatile and can earn you interest weekly when you deposit them in an interest-earning account.
Trading in cryptocurrency is very broad in that investors can earn either through regular trading, getting interest on savings with lending platforms, or through airdrops from staking. When investors join the world of crypto trading, they do so to increase their crypto holdings or make a cash profit. However, you have to learn how best to trade cryptocurrency so that you can benefit from these gains.
When you venture into trading in cryptocurrency, there is a real risk of losing your portfolio because of the price volatility. When you take your time to learn how to trade cryptocurrency, you can mitigate many of the risks. Read on and know how you can trade cryptocurrency.
How cryptocurrencies work
Before you even think of venturing into cryptocurrency trading, it is crucial to understand how cryptocurrencies work. This information comes in handy whether you are buying, selling, or trading crypto. Cryptocurrencies run on a blockchain network that records every transaction on a ledger that cannot be altered. It is not possible to enter any wrong information on the ledger.
When you want to trade cryptocurrency, you must have a crypto wallet that stores your pair of private and public keys. These keys provide your wallet address and access to your wallet as well. If you want to use a platform where you trade cryptocurrency, you will be required to provide the public key, which is the address, and if you want to access your wallet, you use the private key as a “password”.
Choosing a cryptocurrency
This is a crucial choice you need to make, especially if you want to learn how to trade cryptocurrency. There are hundreds of digital currencies, and new coins are constantly being introduced. You need to choose the coins to trade that can earn you the best returns. Fortunately, you can check out the homepage of one of the leading sites for crypto trading to learn about various digital tokens and more on crypto to make informed decisions.
It is usually recommended that you select cryptocurrencies that have been ranked among the top 50 when it comes to market capitalization. However, this does not mean that you completely ignore new projects as there are several that have indeed shown great promise. You can decide to invest in decentralized finance (DeFi) tokens like LUNA, Uniswap, etc., or non-DeFi tokens like Bitcoin, Ethereum, USDT, etc.
Choosing a crypto broker
You cannot effectively learn how to trade cryptocurrency if you do not choose the best crypto brokers in the market. If you want to trade crypto, you need to open a brokerage account with one of the reputable platforms. Some of the best brokers you can open an account with include Loop, Coinbase, and eToro, etc.
Choosing a reputable broker helps minimize the chances of losing your funds or being scammed. When creating an account, you might be required to provide identification for your account to be verified. You can then proceed to fund your account, choose crypto and decide on the trading option. You can deposit in a savings account for interest, stake them to get airdrops or trade them to get profit.