Why You Should Trade Cryptocurrency?

Why You Should Trade Cryptocurrency?

Let’s kick things off with a quick overview of the basic aspects.

When you trade in crypto you are speculating on whether the market will rise or fall in value. Without even taking ownership of the digital asset.

This is done by using derivative products such as CFDs (Contract for Differences).

Here, I’m going to share the advantages & disadvantages of cryptocurrency. 

A Basic Overview of Things

Investors now-a-days prefer to invest in cryptocurrency since it’s more reliable than ever, and can be used for making huge profits in both short and long-term investments.

Besides, it's different from other fiat money, most cryptocurrencies have a restricted reserve, restricted by mathematical algorithms


This makes it unattainable for any political body or government agency to cut their value through inflation. 

Moving on, funds are transferred, the transactions are recorded in a public ledger. Crypto is stored in digital wallets and stores the tokens in the digital wallet until the owner is ready to trade it. 
 

Since it's a digital payment system that doesn't rely on banks to verify transactions.
 

Advantages & Disadvantages of Cryptocurrency

Advantages
 

1. Cryptocurrency volatiliy

Volatility of crypto makes the market so exciting. The market price moves rapidly throughout the day and can provide a wide range of opportunities for traders though it increases the chances of unnecessary market risks.
 

2. Leveraged exposure

The trader can gain extensive exposure to a cryptocurrency market while only tying up a moderately small amount of capital.
 

3. Faster account opening

When you buy cryptocurrencies, you’ll need to buy and sell through an exchange, it requires creating an exchange account since cryptocurrencies are stored in the digital wallet.

enlightenedBurning Question: Is Cryptocurrency Legal ?

 

4. Ability to go long or short

When you are purchasing cryptocurrency, you hope that the value will rise in the future.

But when trading on the price of a cryptocurrency, the trader takes advantage of markets that are falling in price, as well as rising. 
 

5. Cryptocurrency market hours

The cryptocurrency market is open to trading 24 hours a day and throughout seven days a week.
 

6. Improved liquidity

Cryptocurrency's cash conversion process is fast and hassle-free, without affecting the market price.

Liquidity is important because it carries better pricing, fast transaction timing, and enlargement accuracy for technological analysis.
 

Disadvantages


1. Scalability 

Scalability is probably the biggest concern with cryptocurrencies are the problems with scaling that are posed. 

While the number of digital coins and their acceptance is growing rapidly but still dwarfed by the number of transactions that payment giant, VISA, processes per day.
 

2.Lack of Regulations

Crypto trading does not have any regulations and is not under the control of any central bank or government, so it can be misleading sometimes.
 

3. Cybersecurity issues

As Cryptocurrency is a digital technology, it will be subject to cybersecurity breaches, and may eventually fall into the hands of hackers.
 

4. Price volatility & lack of inherent value

A major problem of crypto trading is price volatility, tied to a lack of inherent value. 
 

Is Cryptocurrency a scam or not ?

Metaphorically speaking, cryptocurrency is not a scam.

But unfortunately, cryptocurrency scams have been increasing exponentially in recent years.
 


Crypto V/S Forex & Stocks 

Investing in cryptocurrencies is risky but also potentially more profitable. By investing in cryptocurrency you purchase the coins itselves.. It depends on the trading style and preferences.

On the other hand, The Stock Market trades in stocks, which are the units of proprietorship in a company, and forex or foreign exchange is a marketplace to buy and sell currencies.

A trader must invest diversified and stay updated to trade cryptocurrencies. Even though the forex market also offers a large profit potential, it is more relative to the amount of investment.

 

Since failure and success are part of trading. One must manage both these phases wisely. One must learn from the failure and make necessary upgrades in the methodologies for a promising success in the future.
Good Luck. 

 

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