When bitcoin hit the market back in 2009, it was somewhat a mystery to many. That was the foundation of the many cryptocurrencies we have today. You need to know a few things about crypto as a beginner if you will be a success.
You have probably heard the idea of people trading crypto and were wondering what it involves. There’s a lot of ground to cover as a beginner before you can enjoy any meaningful strides. The Following Is an essential guide you can use and how to start crypto trading.
What Is Crypto?
Crypto is a digital currency that you can use to pay for online services and goods. If you have ever heard of bitcoin, the others are in the same bracket. These currencies use as a secure online ledger – it has strong cryptography.
The idea of using crypto is popular today as it is an unregulated playfield. This means it can easily be traded for profit. So, what more do you need to know about crypto?
How to Buy
Most cryptocurrencies are available in most countries, and you only need to spend to get any. It would help if you had an online wallet where you can hold the coins first. You can opt for a wallet such as Coinbase or any other.
As stated, once you have the wallet, you need real money to buy the currencies. You can use brokers who offer trading services if you want to learn on the ropes. Use the likes of Robinhood, Tradestation, and Sofi Active. You can get more ideas on how to buy and sell cryptocurrencies here knowing that when you use Robinhood, you get a free trading platform.
Are They a Good Investment?
You have to know about any investment before you spend any money on it if it’s a good investment. So, are crypto worth the fuss they have been about? First, if you see crypto as the future of currency, then they are a good investment.
But you also need to know that the crypto market is a volatile one. Just this year, most cryptos lost almost half of the value coming into April. The position you want to be in is one that people are paying for what you have.
Look at it this way; crypto can generate cash flow on its own. So, there needs to be someone willing to pay more than what you paid for it for you to make any profit. When the market lost its value, most people who were holding on to it made huge losses.
Most crypto may also lose some of its value soon as people are not spending them today. They are looking at the future value and, in the process, making them lose value.
How Many Cryptos are There?
After Bitcoin, several cryptocurrencies have come up over the years. Today, there are at least 10,000 cryptocurrencies available and the total value for all available cryptocurrencies is around $1.7 trillion as of May 2021.
This is a significant shift from where it was a few years ago when the value was pushing $2.2 trillion. The market had a significant change this year, causing most of the coins to lose their value.
Of all the coins in the market, Bitcoin still has the most significant share as the popular one. It stands at a value of $735 billion. This was a substantial loss in May after it was at a $1.2 trillion high in April.
5 Common Cryptocurrencies
You can use market capitalization to find out which crypto can give you value for money. The following are the best crypto according to market cap:
- Bitcoin – $735.3 billion
- Ethereum – $324.3 billion
- Tether – $61 billion
- Binance Coin – 57 billion
- Cardano – 54.6 billion
Legality of Cryptocurrencies
In most parts of the world, the use of cryptocurrencies is entirely legal. There are a few places where it is outlawed, such as China. China banned the use of cryptocurrencies and hence made it illegal to use or trade them there.
Why Cryptos are Popular
There are several reasons why cryptos are so popular today, and that includes
- They’re seen as the future of currency
- Blockchain tech that’s behind cryptocurrency is fascinating to most investors
- Cryptos have a high chance of going up in value
- They remove the idea of central banks and hence no regulations
When it comes to cryptocurrency, there is a lot that you need to figure out before making any investment. The market also seems to be a volatile one, so you need to prepare for losses as much as profits. That’s what to keep in mind as a beginner in the cryptocurrency field.