Cryptocurrency trading can be extremely profitable – if you know what you’re doing. Trading cryptocurrencies right requires attention and sound knowledge of the crypto market. Here is a list of must-knows before you start trading cryptos:
- Not every beginner is ready to start trading cryptos. Even though a cryptocurrency exchange is not a part of the regular stock exchange, yet many people might prefer to trade cryptocurrency stocks on the stock market. You can start trading cryptos on a smaller scale. For example, GBTC is a trust that owns Bitcoin and sells shares of it. Trading GBTC avoids you having to trade cryptocurrencies directly, but it still allows you exposure to Bitcoin. But beyond GBTC (and the Ethereum Classic version ETCG), your options are very limited for crypto stocks.
But be aware that GBTC trades at a premium (meaning bitcoins are cheaper than buying shares of the GBTC trust), which isn’t ideal. Also, cryptocurrency trading is a 24-hour market, where the traditional stock market is not.
- The cryptocurrency market is insanely volatile. You can make a fortune in a moment and lose it in the next whether you trade Bitcoin or the GBTC Bitcoin trust. Consider mitigating risks, hedging, and not “going long” with all your investable funds. If you trade only the top coins by market cap (that is coins like Bitcoin and Ethereum), or GBTC, then the chances of losing everything overnight are slim (not impossible, but slim). Other cryptocurrencies are riskier (but can offer quick gains on a good day).
- A good first foray into cryptocurrency investing is obvious, buying a major cryptocurrency like Bitcoin. Once you have done that, you could try trading BTC and ETH for other cryptocurrencies. Trading “crypto pairs” can be rewarding, but it is more complex and often more risky than just buying a single cryptocurrency as an investment.
- Do not do “margin trading” unless you know exactly what that is and are an expert. Cryptocurrency is volatile; you can end up losing all your money in an instant if you aren’t careful.
- If you don’t understand the tax implications of trading cryptocurrency, trade very carefully. There are some nasty traps you could fall into when trading coins. For one, they are not necessarily considered “like-kind assets.” If that is confusing, then consider sticking with trading USD for coins in until you grasp the concept.
- A beginner should start by choosing a company with a good reputation that offers an exchange and wallet (to help keep the process simple).
- A beginner should also start by trading prominent coins. Currently, in 2019, we are referring to coins like Bitcoin (BTC) and Ethereum (ETH). In the future, this could change.
A crypto trading platform with game-changing features
Headed with a unique approach of bringing traditional trading techniques to the high-tech cryptocurrency market, PCEX is all set to revolutionize the crypto market. The platform facilitates seamless crypto trading and offers the lowest transaction fee.
PCEX offers a well-trained broker channel for personal assistance at no extra fee from the exchange. A major concern with trading cryptos which PCEX rules out is that most exchanges do not offer trading for both fiat as well as digital assets. PCEX offers trading of both digital assets and fiat currencies.
Start trading cryptos safely and securely with us on PCEX.