Cryptocurrency trading volumes surged 127% in late 2022. Cryptocurrency is exploding in popularity as an investment.
The cryptocurrency market is highly volatile. It’s risky, but the profits can be exceptional. If you’re thinking of investing, this crypto guide will help you start.
Learn more about crypto, how to buy it, and how to invest it in this beginner’s guide to cryptocurrency.
The Basics
Crypto is a form of digital money. You can use it like traditional currency to buy goods and services. The number of merchants who accept crypto is gradually increasing.
However, much of the interest in cryptocurrency is to trade it as a form of investment.
Cryptocurrency is fully decentralized. It doesn’t rely on banks or other institutions to verify transactions. Instead, it uses sophisticated encryption to store and transmit transaction data.
Thousands of types of crypto are available. They all work somewhat differently. Taking the time to learn about any form of crypto you plan to trade is very important.
How to Buy Crypto
You can buy crypto online or from a crypto ATM. ATMs are relatively new, but they’re rapidly growing in popularity.
Buying Cryptocurrency from an Exchange
Buying cryptocurrency online through an exchange is convenient. However, you have to give your personal and digital information. The exchange knows your identity and bank data.
The transaction delay before receiving the cryptocurrency in your digital wallet can take up to a week.
Buying Cryptocurrency from an ATM
Bitcoin ATMs are becoming more common. Search here to find an ATM near you.
ATMs are especially popular with new crypto users. ATMs let you avoid the hassle of finding an online exchange and linking all of your personal information.
Transactions at a crypto ATM are more anonymous. You don’t need a bank account. You can receive the crypto in your wallet in as little as a few minutes.
Choose a Trading Strategy
Investors use many different strategies for trading crypto. Active traders buy and sell assets to gain profits in the short term. Passive traders hold their assets for a longer time period.
Active Trading Strategies
Active trading strategies include:
- Arbitrage
- Scalping
- Range trading
Arbitrage lets you take advantage of small price differences between different exchanges. The profits are small, but they add up with a large enough investment.
Scalping relies on small price changes. After you buy crypto, you monitor its price throughout the day. You sell the asset when its price rises higher than what you paid.
To use a range trading strategy, you choose a price range where you’re comfortable buying and selling. For example, if a coin is worth $1,500 and you think it will rise to $1,600, you can trade within that range. You would buy crypto at $1,500 and sell if it rose to $1,600.
Passive Trading Strategies
Buy-and-hold investing is a common passive trading strategy. You buy cryptocurrency and hold it for a long time. This strategy is based on the belief that long-term gains will outweigh short-term downturns.
Dollar-cost averaging is another popular strategy. You spend a set amount on cryptocurrency at regular intervals. You make the investment no matter the market conditions, which saves you from worrying about market timing.
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Beginner’s Guide to Cryptocurrency: Get Started
With this beginner’s guide to cryptocurrency, you have the basics for crypto investing. You’re ready to decide which type of coins you want to buy and choose an investment strategy.
Cryptocurrency investing has risks, but the rewards can be significant. Join the growing number of crypto traders and see what it can do for your portfolio.
Keep reading for more great articles about technology and investing.