Crypto Trading — An Introduction — The trend of crypto trading has radically popularized in recent years. Today, more than ever, companies are using cryptocurrency and other digital assets for investments, transactional, and operational purposes. A 2020 survey shows that 36% of small businesses in the US accept bitcoin. Some of the leading companies accepting bitcoin payments include Wikipedia, Microsoft, and AT&T.
So, What’s Cryptocurrency Trading?
Crypto trading or cryptocurrency trading refers to the buying, holding, or selling of cryptocurrencies such as Ethereum (ETH), Bitcoin (BTC), Litecoin (LTC) — to generate a profit from short-term and long-term fluctuations in their prices.
How to Start Crypto Trading
So, you’ve got some financial holdings and want to invest them in making more money, right?
The portals that allow you to exchange digital currency for traditional currency are called “exchanges.” You can find numerous cryptocurrency exchanges online, but before you take the plunge, you need to consider the platforms’ validity in your area, their reputation, exchange rates, and safety criteria. Coinbase, one of the biggest crypto exchange platforms, doesn’t provide its services in Indonesia and India.
CFD trading or Contract for Difference trading allows individuals to speculate on the price of an asset without taking ownership of the asset itself. CFD trading allows the traders to go long, ‘buy’ if they think that the currency will rise, or go ‘short’ if they think it’ll not. Both of these are leveraged products. This implies that you only need to put up a small margin (deposit) to acquire exposure to the underlying trading market.
How Does a Cryptocurrency Market Work?
Cryptocurrency markets are considered decentralized markets as a state authority or government does not issue them. They’re typically traded through digital wallets. Cryptocurrency primarily uses blockchain technology to create hashes (code segments) unique to every user transaction. In crypto trading, you send a cryptocurrency unit to other users via digital wallets. Transactions are only considered completed after it is verified and added to a blockchain through a mining process. This procedure also holds for creating new cryptocurrency tokens.
Blockchain is a record-keeping technology that stores the transaction history for each cryptocurrency unit and shows the transfer of asset ownership over time. It records transactions in ‘blocks, and new blocks are added at the front of the chain with every transaction.
Want to Learn More?
If you’re interested in learning more about crypto, feel free to look at the resources and information prepared by Urban Crypto to help you enter the crypto market. Here you can find a beginners’ guide for Coinbase, Binance, Cryptocurrency. If you’re looking for a way to make money with cryptocurrency, want to know about the best wallets and exchanges to invest in, you can find it on our platform. Not sure how to excel in the world of cryptocurrency? Urban Crypto has got everything sorted for you! Featuring all the latest beginners guides about cryptocurrency.