Bitcoin has surged to record prices multiple times over the past few weeks, and it is increasingly difficult to ignore.
With the catapulting price, as well as multiple profit testimonies, you must have been considering a cryptocurrency investment lately.
However, buying digital coins without sufficient knowledge doesn’t seem all like a great idea. Of course, you can make money by investing in crypto, but you can lose money also!
If you’re looking for a detailed cryptocurrency guide before making your first or next investment, you’re at the right place.
In this article, you’ll learn almost all there is to know about buying and earning from cryptocurrencies.
What is a cryptocurrency?
A cryptocurrency is a virtual currency that serves as a medium of exchange and an investment asset.
The crypto prefix in cryptocurrency suggests that digital currencies are secured using cryptographic technology, which makes them almost insusceptible to hacks.
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Cryptocurrencies are generally mined on computers around the globe and not issued by banks or the government. This feature severely limits the government’s ability to interfere in or regulate cryptocurrencies.
Cryptocurrencies don’t exist in a physical form; they exist virtually on computers around the globe, thanks to the blockchain technology powering most cryptocurrencies.
What are the most successful cryptocurrencies today?
If you’ve heard about cryptocurrencies, I can bet my last dollar that you’ve also heard about Bitcoin. Bitcoin is almost synonymous with cryptocurrency due to its massive popularity, but how did it become this popular?
Bitcoin was the first cryptocurrency ever created, and it was released to the public in January 2021. The cryptocurrency was created by one Satoshi Nakamoto, who has been anonymous over the years, even as Bitcoin grew in leaps and bounds.
Bitcoin’s fast adoption made it grow rapidly, with a market capitalization of over $1 trillion.
For comparison, there are over 6,500 cryptocurrencies in existence, and they all have a total market capitalization of $1.6 trillion.
Bitcoin isn’t the only popularly traded cryptocurrency. There are many other cryptocurrencies apart from Bitcoin; these coins are collectively referred to as altcoins.
Some of the most popular altcoins include Ethereum, Ripple, Litecoin, and Tether, amongst others.
How to make money From cryptocurrency
Cryptocurrencies are still relatively new, and in no way as widespread as fiat currency. There are still lots of crypto-related money-making opportunities out there which you can take advantage of.
In this section of the review, I’ll take you through some of the most lucrative ways to make money via cryptocurrencies.
Let’s dive in.
This is by far the commonest utilization of Bitcoin and other cryptocurrencies.
Cryptocurrencies are very volatile, and they fall and jump in value rather frequently. Cryptocurrency traders take advantage of this to study the rising and falling trends of these coins.
Utilizing these data, they can buy a cryptocurrency when the prices fall, and resell when they rise.
However, this should not be confused withholding (or HODLing), which we’ll get to in a bit.
There are many cryptocurrency trading strategies, some of which are swing trading, arbitrage, amongst others.
Buying and holding select cryptocurrencies is more common among investors lacking time to engage in active trading.
As prices tend to rise over time, you can save yourself the stress of buying and reselling. Instead, you buy, hold, hope the prices go up in the future, and when it does, you resell.
Holders have coined an acronym for the strategy; HODL. HODL means Hold On for Dear Life, and it started when a bitcoin holder misspelled “hold” in an online discussion forum.
Mining Crypto Currency
If you’ve been following this article from the start, you should know already that Bitcoin isn’t issued by the government like the regular dollar notes.
If this is so, then how do Bitcoins come into existence?
The simple answer is that they’re mined!
Cryptocurrency mining is a complex activity that involves the use of powerful computers to solve complex mathematical problems. Miners get some cryptocurrency in exchange for the problems they solve.
Early bitcoin owners mined the coin without sophisticated equipment, but modern-day mining is much more complex and competitive.
What are the best cryptocurrency trading platforms?
From the preceding section, it is clear that trading is the most lucrative way to manage your bitcoin and other altcoins.
To trade comfortably on the internet, however, you’ll need a crypto trading platform, otherwise known as crypto exchanges.
While cryptocurrencies might be hackproof, cryptocurrency exchanges are not. This drives the need to find an exchange that keeps your digital currency safe.
Here are some cryptocurrency trading platforms that you should check out if you want to start trading Bitcoin and other cryptocurrencies.
Coinbase is a trusted cryptocurrency exchange that has grown to become one of the strongest forces on the market today.
It was founded back in June 2012 and has only grown more popular ever since, with plans to go public this year.
It has one of the largest user bases amongst crypto exchanges, with over 43 million users total.
In short, there’s just so much to love about Coinbase.
If you think the trading and withdrawal fees look too high to you, you might want to consider the alternatives below.
Gemini was founded by the well-known Winklevoss twins Cameron and Tyler Winklevoss. It is headed by the outspoken Tyler, assisted by his twin brother.
Tyler and Cameron are widely known as the first bitcoin billionaires, and they’ve been backing the coin for as far back as anyone can recall.
With such a passion for cryptocurrency, it is no surprise that their exchange serves more than 14 million active users.
Another way to make money with Cryptocurrency is through Tradestation.
Tradestation as the name implies is a cryptocurrency trade station that’s most suited for active, day-to-day traders.
It is useful for experienced traders who make multiple trades per day. Otherwise, it can get too expensive for what it offers.
If you’re not that experienced yet, it is better to stick with the ease and affordability that Coinbase and Gemini offer.
Cryptocurrency has been here for a decade, and if all the latest happenings are anything to go by, it is here to stay.
There hasn’t been a better time to make your first investments. However, you want to be sure of what you’re doing before you jump in.
This article helps you do just that, as it teaches you all you need to know before jumping into your debut crypto investment, ever!