Besides being the world’s sixth-largest country, Australia is the only country that covers an entire continent. Ironically, it’s also the world’s smallest continent. To many Australians, the word cryptocurrency sounds like another latest rocket science that only a few chosen geeks can understand. To others, they see it as another way of making quick riches without sweating.
However, both camps are extremely wrong. First, cryptocurrency isn’t as hard as it may sound. Second, it’s not an easy way to make “lazy” money. Thus, you should understand that, although it’s an investment avenue, the processes still remain the same. Trading in digital currencies still requires you to master universal principles of success, including learning to trade cryptocurrencies.
Yes, if you don’t want to learn, then you aren’t ready to earn from cryptocurrencies because even the world’s biggest earners are some of the best learners.
So, this post seeks to assist you in learning the facts about this new investment vehicle modern technology presents you with. So, here are the facts.
Highly Volatile Value
First, you should understand that cryptocurrency’s value is not cast in stone. It’s just as volatile as that of all other currencies you may trade-in. Just like traditional stock markets, its value depends on numerous prevailing factors at any given time. For instance, Bitcoin price hit an all-time high of $20,000 per coin. Today, it has dipped because the prevailing circumstances have changed.
Therefore, you should prepare to face this fact no matter how badly you want to succeed in your cryptocurrency trade. Additionally, the volatility can hit you the right way and earn profits, or vice versa. So, you need a thick skin to survive and succeed here.
Cryptocurrency is Above State Bans
This second fact should be sweet music to your ears. Yes, some dictatorial regimes have banned cryptocurrency for selfish reasons. For instance, they ban it because their central banks or commercial banks in which they have shares are losing business. They fear its decentralized nature because it doesn’t give them a big say.
Fortunately, they cannot stop you from trading in these currencies because they can’t access your crypto wallet. Thus, retrogressive governments can’t stop the cryptocurrency market and the profits you can reap from it.
Cryptocurrencies Lack Fundamental Backing
It’s worth noting that unlike traditional currency, digital money has no fundamental backing. It has no tangible fundamental factors that can determine its value. In traditional stock trading, you can track stock to predict its value. You may also look at a country’s economic performance to gauge its currency’s value. However, digital money value is a different ball game. Thus, it’s difficult to value a digital currency using traditional factors.
Digital Currencies Have Their “King”
The world has over 1,300 digital currencies you can choose to trade in. However, some are “more equal” than others because they yield higher results. Yes, just like other fields, Bitcoin is the undisputed “king” of virtual currencies.
For instance, it was the first tradable virtual currency to enter the market. It occupies 54% of the aggregate $589 billion market cap of all virtual currencies. Therefore, you can make an informed decision regarding where to focus your investment.
Digital Currency Trading Has Low Entry Barriers
Before entering this trade, it’s worth noting that you will have lower entry barriers(if any) than when venturing into traditional stocks or forex. You only need the passion to trade, a coding team, time, and some little money to invest, and you are done.
Most of the Trade Happens on Centralised Exchange Platforms
You also need to know that about 99% of all virtual currency trade volumes happen on centralized Exchanges. The reason is that these platforms provide investors with higher liquidity and greater trade volumes.
Inversely, decentralized platforms offer a higher security level. However, they are slower than their centralized counterparts. Also, a few platforms are adopting a hybrid model to give investors the best of the two worlds.
You Still Need to Guard Against Possible Fraud
Lastly, you need to remember that fraudsters are still everywhere. Thus, you must guard your investment against them. Beware of scammers who promise to give you “instant financial freedom” and double your money while sleeping. So, flee for your hard-earned money if you hear any of the stuff below:
- Guarantee that you’ll always make money no matter the prevailing circumstances;
- Big payouts that will double your money overnight;
- Tantalizing promises of giving free money in dollars or virtual currency;
- Boastful and unprovable claims about a trading platform.
Recommended Reading :
- Understanding The Benefits Of Using Online Crypto Tax Software
- Can You Buy Bitcoin With Cash?
- 5 Interesting Bitcoin Success Stories
- Top 10 Block chain Platforms You Need To Know About
As you can see, cryptocurrency is the currency of the future. It’s just a matter of when, and not if, it will become mainstream. Therefore, this informative guide recommends you invest wisely in digital currencies and expect a decent profit. So, you can also join thousands of other beginners who are learning to trade cryptocurrencies from various platforms and making decent profits. The ball is in your court to use these insights to make the right investment decision.