What is cryptocurrency trading?

What is Cryptocurrency Trading?

What you’ll learn?

• What cryptocurrency trading is
• The nature of risk in trading crypto
• The difference between trading vs hodling
• The importance of keeping your feet on the ground

When we surveyed newcomers to cryptocurrency asking them what aspect they would most like to learn about, one of the most popular answers was how to trade cryptocurrency. 

This shouldn’t be a surprise. Cryptocurrency is an ideal asset to trade because its short-term price is volatile. In other words, price changes quickly and by significant amounts on a regular basis.

A volatile asset presents a lot of opportunity for traders who make money by exploiting price movement; but trading cryptocurrency is a double-edged sword. Greater volatility means greater risk, and the risk to a novice trader of losing money is much greater than the chance of making money.

Cryptocurrency is also a novel and relatively immature asset, which means that its true potential over the longer term is especially hard to predict. 

Early investors have enjoyed astronomical returns, and because adoption is still at a relatively low level, cryptocurrencies still present the possibility for significant returns relative to investment.

Its novelty – especially in relation to its challenge to traditional forms of money – means its use case and legitimacy in the eyes of governments are unproven, and so there too, lies a lot of risk, to weigh against the opportunity.