All You Need to Know Before Trading Cryptocurrency

All You Need to Know Before Trading Cryptocurrency
29 March 2021
Content from our Premium Partner
AllAfrica InfoWire (Washington, DC)

Cryptocurrency trading is becoming quite a trend and many people are opting this to build wealth. As cryptocurrency is gaining popularity, trading cryptocurrency is becoming more of a profession than passive income. If you have the sound knowledge of trading, you'll generate a handsome amount of profit most of the time.

Although there are a large number of fluctuations in the price of cryptocurrencies, it is still preferred by a lot of people. If you are a beginner in cryptocurrency trading, the details below will help you get started on the track of trading:

What is Blockchain?  

Cryptocurrency and blockchain go side-by-side because it is the blockchain technology that makes cryptocurrency so unique and efficient. Blockchain can be simply defined as a method of storing bitcoin transactions in a ledger.

If you look at it from a digital perspective, blockchain can be defined as programmatic blocks in the form of chains. Each block has a list of transaction details like time of transaction, date, amount traded, and traders involved. When all these blocks are combined it takes the form of a chain.

Price Fluctuations of Crypto Market

As stated in the introductory paragraph, the cryptocurrency market goes through many ups and downs and has a lot of fluctuations in its price. You should know about the factors which affect the prices of cryptocurrency so you can buy coins at the most suitable time and trade them at a time when they will generate a high profit.

Media Attention

Media plays a very important role in the prices of digital currencies. As soon as a currency comes into the spotlight of the media, it is typically affected. Positive news tend to be a source of the price rise of a currency and negative news has an opposite effect. These effects are introduced because of the immediate response of traders.

Coin Idiosyncrasies

Every currency is influenced by very specific factors. The support from the financial sector is one of the most influencing factors in increasing the price of a cryptocurrency. There are some other minor factors like the security that can put an impact on the price value of each coin.

Where to Trade Cryptocurrency?

There are many platforms online which you can use to trade cryptocurrency like bitcoinmastery.io. However, before you start trading cryptocurrency, make sure if it is legal in your country or not. Many countries now allow the trading of cryptocurrencies like the US, UK, South Africa, Kenya, and many more.

Cryptocurrency Exchanges

To start crypto trading, you need to buy some cryptocurrency. You should take a look at the current market value of various crypto coins and evaluate which currency will generate maximum profit.

Once you have decided which currency you want to buy, you need to head to choose a cryptocurrency exchange. It is the simplest way to buy cryptocurrency. At a cryptocurrency exchange, you buy tokens with your fiat currency. Then, you store the currency in your digital wallet. Finally, you can trade your cryptocurrencies.

There are certain fees charged by the crypto exchanges:

  • If you trade your cryptocurrency at an exchange then they will charge trade fees. Usually, the trade fee is 1% of the transaction.
  • The deposit fee is relatively lower than the withdrawal fee. The deposit fee can only be large if you decide to deposit via credit card.
  • An exchange fee is applicable when you want to convert your fiat currency to cryptocurrency or vice versa.

Conclusion

Cryptocurrency trading is becoming the talk of the town and many people are gaining trust as the world is adopting it quickly. No doubt you can incur a loss in crypto trading but if you keep an eye on the market trends, there are high chances to generate good profit.

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