Cryptocurrencies might be new, but they’ve shown great potential to change our world’s future.
It’s a disruptive technology that promises outstanding returns. The small investments you put into cryptocurrency can grow into life-changing profits over a couple of years. This is the main reason why you should be interested in trading cryptocurrency.
Google Trends organic stats for “crypto trading” in US / 2019
The success of trading cryptocurrencies can only be possible if you’ve done your research and developed a good trading strategy. You should also be wise if you find some great tips on cryptocurrency trading from the internet before you start trading.
Nevertheless, do work on your good practice and don’t forget to double-check even the information shared in the following trading tips.
Here are a few reasons that we think are the major driving forces behind the increasing popularity of cryptocurrency trading.
Cryptocurrency Markets Have Higher Volatility
Volatility means the variation of the trading prices over a certain period of time. The majority of stocks in the stock market have much less volatility than cryptocurrencies. Cryptocurrencies went through a lot of volatility because of short-term speculative interest from investors. One good example of such volatility was seen from October 2017 to October 2018, where Bitcoin’s value rose as high as $19,378 and fell down to $5,851.
The higher the volatility is, the riskier it’ll be. But this is what makes cryptocurrencies exciting and trending. Because of cryptocurrency’s high volatility, you have the chance to earn more than half of your initial investment in just a couple of days when you start trading.
The prices of cryptocurrencies are changing every minute. The rapid variations of these prices provide a lot of opportunities for traders to either go long or short when trading. This is even better for short-term swing traders or day traders because cryptocurrencies, like Ethereum, tend to move from 5%-10% in just a day.
Yes, the risks are high, but if you’ve done your research and understand how to trade cryptocurrencies, you won’t mind them at all because you’re looking at the bigger picture, which is great profits.
The Volatility Of Cryptocurrencies Makes For More Trading Opportunities
This is really one of the controversial reasons why many people are trading cryptocurrency since not everyone has managed to do it successfully. There are plenty of stories around the internet about how people ploughed their entire life savings into cryptocurrencies only to lose it all.
But this will only happen if you dove into cryptocurrencies without doing your research and coming up with a good strategy. You need to be smart and cautious when trading cryptocurrencies so you can earn more money from your initial investment.
If you do it the right way, you get the chance to double or maybe even triple your earnings when you start trading cryptocurrencies. The high volatility of cryptocurrencies will make it possible for you to buy a digital currency at a low price today and sell it when its value soars up again after a couple of days.
Cryptocurrency Markets Are Available 24/7
Stock markets only open on weekdays and for a couple of hours a day. Cryptocurrency markets, on the other hand, are available 24/7 and you can access them anywhere in the world.
This is perfect for traders who have a daytime job. You can trade cryptocurrencies after going home from work or you can do it during the weekends. It’s hard for a trader with a daytime job to be active on the stock market since it only opens when most people are at work.
You can trade cryptocurrency anytime and anywhere because its market has decentralized governance. This means that it doesn’t have a single regulatory board that oversees and manages it.
This means that you don’t need to follow or comply to a schedule to make a trade since you can do it anytime of the day, making it more convenient than trading in the stock market.
No Trading Limit or “Pattern Day Trading Rule”
The pattern day trading rule is a law that prohibits you to do more than 3-day trades in 5 business days if you have less than $25,000 in your account in stock markets. This is a bit of a bummer for traders who likes to get the most out of their investments since it limits their trading activities.
But there’s no such rule observed when trading cryptocurrencies. Even if you only have $200 in your account, you can trade as many cryptocurrencies as you want every day. What this means is that if you’ve developed a strategy to trade cryptocurrencies successfully, you’ll have the potential to grow your $200 much faster than trading in stock markets.
Algo and Tech Equipment Is Not Needed
Another reason why many people are trading cryptocurrency is because of the convenience it provides. You don’t need a supercomputer with 4 monitors to start trading cryptocurrencies. You can trade crypto straight from your mobile phone.
There are many cryptocurrency exchanges or platforms out there that have a great mobile app with plenty of features and executions, which makes trading from your mobile device much easier.
The best exchange mobile apps are built around API access. That means you can for instance only allow lending in your phone app, but not trading or withdrawals. Apps built like that offer a very good level of security.
In today’s job market where wages get stagnant and finding a job becomes really hard, the vast majority of people would very much welcome an extra source of income. It can help take off some pressure from your bills that are piling up or treat yourself to a nice vacation - that is the main motivation behind the bulk of retail interest in trading crypto.
However, if you’re not careful when trading cryptocurrency, you may find yourself in a rough spot and eventually lose all of your investment.
Cryptocurrency trading is not a game. There’s real money for you to earn but there’s also real money for you to lose.
Do your research to improve your understanding of how the cryptocurrency market works so you can avoid the pitfalls of trading cryptocurrency.
Most people who are trading cryptocurrency are in it for the money. If done properly, it’s indeed a great way of making big money. Just be aware of the risks beforehand and always stick to a reasonable strategy.