Cryptocurrency trading explained: simply process of buying and selling crypto. Cryptocurrency trading is the equivalent of forex trading in the fiat currency world. Trading cryptocurrencies is done on a crypto exchange, which is analogous to a stock exchange. However, unlike stock exchanges, crypto exchanges run 24/7. The markets never shut down or take a break.
How to Trade Crypto
To begin trading crypto, a person has to choose a crypto wallet, as well as a crypto exchange where they can trade in crypto. Today, there are over 1500 cryptocurrencies. However, beginner traders should begin on a major coin such as Bitcoin, which minimizes the potential for wipeouts in the extremely volatile crypto markets. When you choose to buy and sell crypto, you can also download numerous wallets online that let you trade crypto for other crypto coins directly.
Signing Up for a Crypto Exchange Account
To trade on a crypto exchange, you will need to sign up with an account. As a beginner, you should begin to use the leading crypto exchanges in the world such as:
While these exchanges will require that you provide more information, they are also more secure. Besides that, they have better compensation programs in case anything goes wrong.
Most leading crypto exchanges require a lot of personal information when setting up an account. You will have to provide an address, identification documents, and more, through a process known as Know Your Customer (KYC).
Fund the Account
To begin trading in crypto, you will have to fund the account. This often entails connecting your bank account, mobile wallet, or debit card to the exchange account. When funding an account, bank wire transfers are often the cheapest option on major exchanges.
Choose a Coin
Once you have the funds in your account, you can now pick a coin in which to trade. While it is preferable to choose Bitcoin if you are a newbie, you can still conduct your own research. Through research, you can find a project associated with a coin, whose value might rise soon. The goal, in the crypto markets, is to buy low and sell high.
Start Trading
Once you pick a coin or coins, you can now start trading. Most exchanges have a minimum amount you can buy, which is often $20 on most exchanges. Besides trading in person, you can try using a trading bot to make trades.
Store the Crypto
Once you begin buying and selling crypto, you will need to look for a safe place to store your crypto. Storing all your crypto on an exchange is not wise. Instead, you should look to set up an offline wallet, which is a more secure option for storing crypto.
There are numerous crypto wallet types, all of which are much safer than storing all your funds on a crypto exchange. This is because if hackers manage to compromise the Centralized Exchange (CEX), they could steal all your funds. While the exchange might eventually compensate you, it may take some time, and you could miss profitable trading opportunities.
Frequently Asked Questions
When will Coinbase coin begin trading?
Famous platform and application for trading cryptocurrencies, Coinbase (COIN), is getting ready to float directly on Nasdaq and join the stock market. At 1:26 p.m. ET on April 14, 2021, Coinbase (COIN) started trading. Nevertheless, there is no set timing for when individuals will be able to begin purchasing and selling shares.
What is cryptocurrency trading?
Cryptocurrency trading is the process of buying and selling digital currencies, like Bitcoin or Ethereum, through crypto exchanges. It’s similar to forex trading but with cryptocurrencies instead of fiat money. Unlike stock markets, crypto markets operate 24/7 without closing.
How do I start trading crypto?
To begin trading, you need to set up an account on a cryptocurrency exchange and choose a crypto wallet to store your assets. Next, fund your exchange account via bank transfer, card, or mobile wallet, then pick a coin to trade—Bitcoin is a good starting point for beginners.
What is a crypto exchange and which ones are best for beginners?
A crypto exchange is an online platform where cryptocurrencies are bought and sold. Some of the best beginner-friendly exchanges include eToro, Gemini, and Coinbase. They are known for their security and ease of use, though they require ID verification (KYC).
How do I keep my crypto safe after trading?
It's safer to store your assets in an external wallet instead of leaving them on the exchange. Offline (cold) wallets like hardware wallets are considered the most secure option. This protects your funds in case the exchange is hacked.
