Although the world has been aware of cryptocurrency for some time now, there are still many factors to consider before investing a handsome amount of money into the crypto sphere. The unmatchable success in recent years has attracted numerous investors across the world. Nonetheless, this constant gain in popularity cannot provide a suitable answer to the question which is: Is cryptocurrency a safe investment?
Therefore, for all the newbies out there looking to invest in this highly volatile market, the article provides a handful of insights into some of the renowned crypto strategies that can assist in making the most out of the investment. And having ample knowledge of these strategies may reflect remarkable results. Plus, there are various online platforms such as the Bitiq website that provide favorable crypto-trading conditions.
But before diving into the strategies, a newbie investor must be well aware of the fact that once he is in the crypto sphere, any link to the traditional financial system is lost. It is because cryptocurrency is not regulated by any financial institution.
The viral cryptocurrency news available on the internet portrays an easy picture. The increase in prices attracts many newbie investors from across the globe. However, while investing in the crypto world, an investor has a lot at stake. The fluctuations in crypto prices have attracted the attention of many big companies. The top trending companies including Amazon are constantly investing thousands of dollars into research and development. Using the crypto to their advantage, some of these powerful and influential companies have worked relentlessly to create their blockchain technology. For example, Amazon collaborated with the Ethereum blockchain working model to issue their coins. These issued coins attracted many potential customers to pay their shipment and product charges in cryptocurrency. Plus, by collaborating with cryptocurrencies and blockchain, the companies can survive these harsh and drastic economic conditions caused by the novel Covid-19. And to some extent, using these modern modes of digital payments, we can collectively work against hyperinflation.
Some of the widely used strategies by renowned financial and crypto analysts are scalping, shorting, and margin trading.
One of the common techniques used by investors is scalping. Generating quick and small profits, scalping is a widely used trading strategy in which a quick crypto trade takes place. Using scalping, the investors keep a keen eye on the short intervals to sell and purchase crypto coins. And based on these limited intervals, an investor can generate small profits. These profits are usually generated from the difference in prices. The day traders that usually take high risk often use scalping as their strategy. Using low amounts of money, these traders technically analyze the market. Plus, clearly monitoring the price swings, these day traders determine the exact time to enter or exit the market. As a result, they (traders) generate profit from the difference of bid and asked prices.
Shorting, on the other hand, is a widely used traditional investing technique. This specific kind of trading strategy can be applied with no money. The investor just needs to borrow some coins from the exchange. The next step is to analyze the trade market and sell the coins at the current price. An investor usually intends to buy similar coins once they are cheaper. It creates a win-win situation for both the investor and lender. Plus, the chances of losing the money are minimal.
However, inexperienced and newbie traders can face some difficulties. It is because such inexperienced traders are not aware of the quick trade decisions that generate high profits.
Margin trading – involving a broker in the trading process makes its margin trading. All you need is to borrow some money from a crypto broker. Once you have the money, you can utilize it to purchase some crypto coins (the ones you are already holding). But similar to shorting, margin trading is not for the newbie investors. It is because the traders must have a strong grip on the market trends.
The goal of cryptocurrencies is not simply to make money. They are designed to become their unit of value that cannot be manipulated by outside sources such as governments or banks.
It’s essential to do your due diligence on each cryptocurrency before making an investment decision, as they are unregulated assets with volatile prices. Many people have made significant gains by investing in cryptocurrencies. Still, it’s also possible to lose all your money when trading these assets if you don’t know what you’re doing.
The bottom line:
Before jumping into the crypto sphere, an investor must be well aware of all the related and useful strategies to make handsome profits. Moreover, gaining ample market knowledge has become more of an obligation for a rookie. Keeping tabs on the latest trends in the crypto market, an investor can make significant gains.