Is it the right time to start trading in cryptocurrencies? The rapid growth of market trading in cryptocurrencies certainly suggests so, along with the growing number of cryptocurrency trading platforms and exchanges. Bitcoin (BTC) was among the earliest cryptocurrencies launched in the online market and has increased in its value by over 25,000% since the year 2011.
Among other notable cryptocurrencies, Ethereum price (or ETH price) has grown in value by 2700% since May 2016, while Ripple price (or XRP trading price) is expected to appreciate to around $3-5 by the end of 2018, a 10-time growth from the current level.
3 Tips to get started with Cryptocurrency trading
As a new investor, you can easily start trading in cryptocurrencies such as Bitcoin, Ethereum, Ripple and others by choosing the appropriate cryptocurrency wallet and a cryptocurrency exchange where you can buy and sell cryptocurrencies.
Here are some useful tips:
- How to invest.
As an investor, you can also invest into cryptocurrencies as an alternative to the current fiat currency system, along with trading (buying or selling) of cryptocurrencies either with other cryptocurrency coins or with fiat money (US Dollars, Euros, and so on). Online platforms such as Coinbase and GDX allows investors to invest and trade in a variety of cryptocurrencies from a single platform, which is recommended for new investors. Alternatively, beginners can consider trading in cryptocurrency stocks such as GBTC that owns and sells shares of Bitcoin.
- Select the right cryptocurrency coins and exchange.
As a good practice, new investors must start off by investing in cryptocurrencies such as Bitcoin and Ethereum, which have the highest market cap and are comparatively safer investments in a highly-volatile cryptocurrency market. Other than these cryptocurrencies with the largest market cap, you are recommended to only invest in mid-cap cryptocurrencies with a market cap greater than $200 million.
Next, select the right cryptocurrency exchange and ensure that your selected cryptocurrency coin is listed on the exchange. Most investors trade or invest in cryptocurrencies through exchanges such as Binance, Coinbase, or these 5 cryptocurrency exchanges. Remember that cryptocurrency exchanges are different from your regular stock exchanges, as cryptocurrency trading is a continuous 24-hour online market.
- Store your cryptocurrency coins in a safe and reliable wallet.
A cryptocurrency wallet is like a digital bank account where you can store your Bitcoin and other cryptocurrencies. Most cryptocurrency coins have their own official wallet (example, Bitcoin Core Wallet for Bitcoin) or a third-party wallet, which is used to store, send, and receive the digital currency coins. While you can also store your purchased coins on the same cryptocurrency exchange where you purchased it, it is always safer to store them on a hardware or paper wallet. Digital wallets use a combination of private and public keys to keep your purchased coins safe.
While trading in cryptocurrencies offer an investment potential for investors to earn good returns on their investment, it is essential that new investors familiarise themselves with the main aspects of cryptocurrency trading to avoid the pitfalls. Having a sound and long-term investment strategy can reap rich dividends in this fast-growing investment platform.
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