Trading Bitcoin and other cryptocurrencies is one of the most popular and lucrative online businesses in recent years.
From a humble beginning in 2009, Bitcoin, the world’s first popular cryptocurrency, appreciated significantly in value from $0 per Bitcoin to $5,000 per Bitcoin on September 1, 2017. Within the space of 8 years, the net worth of Bitcoin investors increased from some hundreds or thousands of dollars to millions of dollars. This made a lot of millionaires from investing in cryptocurrency.
The global recognition of the coin and its steady appreciation that eventually increased its value has led to a significant increase in Bitcoin and other cryptocurrencies investors.
Other notable digital currencies that people invest heavily in are Ethereum and Litecoin. These digital currencies are appreciating at a pace that makes investing in them a shrewd business investment decision for many.
If you are reading this article, you probably have heard about cryptocurrency trading and were looking for a guide that will teach you the basic knowledge you need to kick-start your cryptocurrency trading. Well, you have come to the right place. The article will give you a comprehensive but easy-to-understand and implement information about how to trade in digital currencies successfully.
What is cryptocurrency?
A cryptocurrency is a digital means of exchange. It performs a similar function to the USD, the British pounds, and other monetary mediums of exchange in the world. The word “digital” underlines the difference between a cryptocurrency and other paper currencies mentioned above. It is not a physical means of exchange but it is still a recognized currency across the globe.
The gradual appreciation of Bitcoin and its acceptance by a host of countries and organization is a proof of the future values that are hidden in these digital currencies. The general belief in some quarters is that if Bitcoin can appreciate that much, nothing stops the other coins from appreciating in the near future. Some notable companies where you can conduct a transaction with Bitcoin include Microsoft, Virgin Galactic, Overstock.com, and WordPress.
In countries like the United States, Denmark, Mexico, Italy, Australia, South Korea, Sweden, the Netherlands, and a couple of others, you can live on Bitcoin. Those countries have tons of shopping malls, online stores, and other organizations that accept Bitcoin for whatever purchase you make.
Apart from the general acceptability of these coins as a valuable means of exchange in many countries, why should you invest in them?
Top reasons why cryptocurrency is a good investment
On a daily basis, the number of investors in cryptocurrency increases astronomically. For instance, between December 1, 2011, and September 14, 2017, the number of Bitcoin users increased from 2 people to over 17 million investors. What is the secret behind such growth? Here are some of the secrets:
- Encouraging growth: Figures, they say, don’t lie. The figure quoted above is a proof of the amazing growth of the world’s most popular cryptocurrency, Bitcoin, in recent years. That growth will still continue as more investors discover the goldmine that is called cryptocurrency. As more people use cryptocurrency, it shows you can really invest in it.
- Not affected by bank crises: The banking sector has gradually lost its reputation as the safest place to keep your valuables, including your money. Since the banking industry has been swept by a wave of challenges including inflation and robbery, you have a better and safer protection for your money by investing it in cryptocurrency.
- Incomparable appreciation: When you compare the rate of appreciation of Bitcoin as a model for the other currencies, you will understand the importance of investing in digital currencies. If you read a comprehensive analysis of Bitcoin growth since it was launched, you will be convinced of its potential for amazing growth.
These are some of the many reasons why you should consider trading in Bitcoin and any other valuable digital coins.
Since you are now familiar with what a cryptocurrency is and have known small but valuable information about Bitcoin, what next? Let me now take you into how to trade like a pro and increase your net worth in a couple of days.
Why did I go through this? I want to allay your fear (if any) about the future of cryptocurrency and assure you that you have made the right decision to avail yourself the opportunity to invest in digital coins. How do you go about it?
How to trade digital coins
Trading in digital coins can be easy and fun if you know how to go about it. Here, I will give you some practical tips and demonstrate to you how to create a wallet and conduct transactions from your wallet.
- Create a wallet
A cryptocurrency wallet is synonymous to your bank account. It is where your coins are stored in advance for any trading or transaction you want to conduct.
There are two major platforms where you can create a personal wallet. These are:
These are the most popular cryptocurrency platforms where you can create a wallet and trade in the coin at your convenience.
I personally use blockchain for my cryptocurrency trading. Therefore, it is ideal that I give you some tips on how to create a wallet and trade on this platform.
Step 1: Create a wallet
Creating a wallet is not a rocket science. Within a couple of minutes, you are through with it. This is how to go about it:
- Enter the blockchain address in your browser or click here.
Click on “SIGN UP” as a new member. This dialog box will appear:
Fill in your form and click “CONTINUE” after filling the form and checking the Terms of Service box.
If the information you supply, especially in the password boxes, you will automatically be taken to your dashboard where you have different menus. Don’t worry; I will explain in details the functions of these menus.
Just below the “BE YOUR OWN BANK,” you have the “Send” and “Request” menus.
- Send: This is where you indicate that you want to transfer either a Bitcoin or Ethereum coin to another trader. You use this option if you want to sell some coins to a buyer or want to make some payments with either of the digital coins.
- Request: This option works directly opposite the “Send” option. It is used to accept payment from other wallet owners who want to transfer a fund into your wallet.
- Graph: The graph at the right displays the current values of Bitcoin and Ethereum to dollar respectively. When I created this demo wallet, Bitcoin was $3609.71 per Bitcoin while Ethereum was $259.72 per dollar too.
From here, you can make your transactions whenever you want to buy or sell a digital currency.
If you get it right, this should take you about 5 minutes to complete.
- Trade the coins
Trading Bitcoin and other currencies involves two processes:
- Buy: Buy any coin of your choice at the right time.
- Sell: Sell it whenever you want. If there is a huge difference in the price you bought a coin and what you sell it, that will give you a good profit margin.
Note that it is not compulsory that you buy a coin. If you can’t afford to buy a Bitcoin at over $3,000, you can buy fractions of the coin whenever you can afford it.
However, to succeed as a cryptocurrency trader, you must obey some unwritten rules and regulations. I will give you some useful tips that will assure your success.
Top cryptocurrency trading tips
- Follow the trend: There is always something in the news about cryptocurrency. You should be abreast of any news as a trader. That is the only way to know when there is a dip or rise in the value of your coins.
- Buy at the right time: What is the right time to buy digital coins? Go for the coins when there is a slight dip in the value of a coin. Take advantage of that dip to fill your wallet.
- Sell at the right time: Whenever a cryptocurrency experiences a drop in value, rest assured that the price will plunge again. If you have the desire, sell at that moment.
- Don’t be greedy: Greedy traders may suffer financial loss if they can’t be patient enough to wait for another rise in price. Buy what you can afford to keep for long in case there is a prolonged decrease in price.
Trading in cryptocurrency is very simple, fun, and financially rewarding. You only need to follow the practical tips in this article. Know the right time to buy and the right time to sell. If you do, watch your wallet grow and your financial status improve.
If you’re interested in mining your own crypto-currency, check out the link below.