Cryptocurrency: Who should consider investing?
Cryptocurrency doesn’t have a physical or tangible form, it exists purely in the virtual world using blockchain technology, cryptography and computer networks. This digital currency of the future is an excellent investment vehicle for all types of investors. It is a great way to diversify one’s portfolio by investing in a fundamentally different sector of the economy. The highly volatile crypto markets are very attractive for ambitious investors who can expect to make fortuitous gains. Hence, the time to shy away from cryptocurrency is long gone. Now is the time to embrace it and ace the bitcoin trading game! It can be a very profitable proposition!
Avenues for making money in the cryptocurrency
Cryptocurrency offers great ways to make money, and one of the most obvious of these is through arbitrage. It is the practice of buying and selling assets on different marketplaces so as to earn a profit from the difference in prices. With crypto-assets, there is ample opportunity to arbitrage because each exchange has a different price for altcoins, based on its native demand and supply. The nature of trading on crypto exchanges throws open the chance of buying altcoins at a cheaper price but selling them at a higher price on a different exchange.
The flexibility to trade cryptos against other cryptos is a novelty when compared to other investment markets. If used strategically, trading pairs can enhance the buying power of an investor. Let’s consider the example of a trading pair BTC/LTC, and assume that you have cash and BTC in your wallet and want to obtain LTC. Of course, one obvious method would be to directly buy Litecoin using fiat money, such as USD. But a smarter way would be to use the BTC/LTC trading pair for a crypto-to-crypto trade, which can be a very profitable proposition. Now imagine that the value of Bitcoin in USD goes up 10% but that of LTC stays the same. In this case, if you buy LTC using Bitcoins instead of USD- you are in a position to buy 10% more than what you’d buy using direct dollar trade. Thus, your buying power as an investor goes up by using trading pairs instead of bitcoin exchange rates.
It’s a known fact that Bitcoin markets are highly volatile. And while this spells risk for most people, there are some aggressive investors who love to operate in this speculative grey zone. The unpredictable nature throws open a world of opportunities. Professional investors are able to profit from the volatility by various means; quick gains come from day trading, while patience may be rewarded by the greater fool theory. If past trends are anything to go by, it can well be a bankable risk, keeping in view the skyrocketing prices of bitcoin in 2017 which resulted in massive fortunes for those who sustained and bailed out before the bubble could burst.
Direct P2P transactions
Cryptocurrency can be profitably employed to aid business transactions, most of which happen via banks that act like a trusted third party. However, these banks charge processing fees for their services as the mediator. Nevertheless, by facilitating a direct P2P transfer between two parties, cryptocurrency eliminates the need for a trusted third party and also associated additional charges. This can be used as a cost-saving measure by big and small businesses that process loads of transactions each day as a part of their regular operations.
Balance investment risk
Another smart way to exploit the investment benefits that cryptocurrency offers is to use it to balance one’s portfolio and hence minimise risk. The diversification of investment into an insulated marketplace can give some cushion from the known risks of shares, equity, real estate and the like. If used with the right understanding of fundamentals as well as trends in the crypto market, this can turn out to be among the best and most profitable investment decisions.
Also Read: Data Science meets Cryptocurrency Trading.
How not to lose money in crypto trading?
While there are a host of opportunities to make money off cryptocurrency investments, one needs to steer clear of any possible chances for loss. Hence, there are a few things that must be red-flagged to avoid unpleasant experiences and regret. First and foremost, risk-averse investors should be wary of this unpredictable market where massive fluctuations are almost the norm. Such people should only invest small amounts at best. Even the ones who are comfortable with speculation should not put more than what they can afford to lose at stake. And the danger that looms over every person who holds even the smallest amount of cryptocurrency is the risk of losing it all. The fear is real because, in the event of loss of the private key, one ends up losing all of their bitcoins and altcoins, basically any crypto assets they ever possessed. The inbuilt security of cryptocurrency that makes it impossible to retrieve the lost asset is also a reminder for all investors to guard their private keys (with their lives!).
Why is CoinDCX the best trading platform?
CoinDCX is an all-inclusive cryptocurrency ecosystem that offers a professional trading experience to all types of traders. An extensive marketplace of 200+ coins and 500+ markets, it is the best altcoin exchange that offers you an immense variety to strategize your portfolio based on your needs. It brings you inexhaustible liquidity from the world’s largest exchanges, namely Binance, Huobi, and HitBTC, to a single platform for smooth order execution, arbitrage opportunities and instant spot trading. It also has the most powerful wallet, so you can trade on spot, margin, future, and lend using a single wallet.
With 57000+ monthly active traders and $10M+ daily trading volume, CoinDCX is among the largest exchanges in the world. So users can rest assured that they will get the most competitive prices for their crypto assets. In addition to impenetrable security measures such as cold wallet storage, withdrawal confirmations and 2-Factor authentication, complete fund safety is ensured by BitGo. CoinDCX is, therefore, a highly trusted exchange with a loyal user base.
Here is a complete list of integrated CoinDCX products on offer:
- Margin – Trade across 250+ markets with 6X leverage
- CoinDCX Go – The simplest Bitcoin trading App.
- Insta – Fastest FIAT On Ramp Off Ramp with zero trading fee. Buy 40+ cryptocurrencies with INR in less than a minute
- Trade – Trade limitlessly with massive liquidity on crypto and INR pairs/order books
- Lend – Earn up to 20% annual interest through lending
- Stake – Stake and Earn passive income
- Futures – Maximize trading potential with leverage up to 20x.
- Convert– Easy real-time crypto price converter for cryptos as well as fiat currency.
Starting your journey as a first time user is easy and convenient. Simply visit the CoinDCX website, and sign up to register as a new user. Create your account by filling in some basic personal details and get started right away!