4 Things Beginners To Crypto Trading Should Know

by Andrew McGuinness     Jul 16, 2019

With a market cap of more or less $190 billion, to say that cryptocurrencies have reached an all-time high would be a considerable understatement. To those still questioning the success rate from trading crypto, the only thing traders have to do is point out the exponential growth Bitcoin has had over the last couple of years, growing up to 400% in just a span of 4 months.

Such good news is attractive especially to new investors. Aside from being a volatile market, there are other things newcomers to the scene should know about the crypto market. Below are the top 4 things any trader should know about, specifically those either just planning or have already begun trading recently:

1. The Crypto Bubble

Before you invested in your first ever coin, you’ve probably done tons of research on digital coins (as you should). Aside from the articles citing the tremendous growth of cryptocurrencies or the immense benefits they offer to society, you have also probably come across numerous accounts of experts calling it a bubble.

One thing you should always consider before trading crypto is the fact that it’s not as stable as physical currencies, or any other asset for that matter. With the tremendous growth of the crypto coins’ value, experts predict that this investors aren’t in it for the long-term; eventually, unexpectedly, the market is finally going to crash.

Even the most pro-crypto trader keeps this in mind, precisely because it could happen at any minute. The best way to use this information to your advantage is to diversify your portfolio as much as possible so as not to have serious losses when one or two coins indefinitely pop their bubbles.

2. Fluctuations in Price

Spend an hour, a day, a week, and then a month trading cryptocurrency and you’ll already notice that market values can increase up to 100% in a short amount of time. To novice investors of other assets that are getting acquainted with the crypto system, this behavior could be off-putting.

Just remember that digital coins are unregulated and whatever price fluctuations you see, no matter how unusual, are completely part of the fun (and anxiety) that comes with trading digital coins.

3. Predicting The Market

In most assets, we tend to look at performance data as the number one instrument in predicting asset movement. However, dealing with digital coins are a little bit trickier. Because they are unregulated, it becomes harder to analyze the data and use that to your advantage simply because there is usually no trend at all.

A coin could go up to 100% in just a span of two weeks. Instead of looking at data, look at news. Digital coins are heavily reliant on investor demand. What are people saying about this specific coin? Are there public releases for a specific digital currency?

Predicting the crypto market is not an easy task but if you stay updated with the latest news regarding development and investor reception, you’re already good to go.

4. Risks of Hacking

Theft is to cash as hacking is to cryptocurrency. Just when you think digital coins are secured safely in your computer, there have been reports of hacking incidents where thousands’ worth of digital coins were stolen by cybercriminals.

One of the first thing you should look into as a beginner is the cryptocurrency wallet you will be storing you digital coins in. There are tons of reliable online wallets trusted by millions of users. As a safer alternative, you could get cold, physical USB-looking wallets just to make sure your coins are completely, safely out of reach.

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