Cryptocurrencies are all the rage right now and everyone wants in on the action. But, what are they and how do they work? And, more importantly, how can you make money trading them?
Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.
Cryptocurrencies are traded on decentralized exchanges and can also be used to purchase goods and services. Bitcoin, for example, can be used to purchase items from Overstock.com, Expedia, and other retailers.
Cryptocurrencies are volatile and can experience large price swings. Bitcoin, for example, has a history of large price swings. In 2017, the price of Bitcoin surged from $1,000 to nearly $20,000 before crashing to below $6,000. In 2018, the price of Bitcoin has ranged from $6,000 to $11,000.
Cryptocurrencies are still relatively new and are subject to regulatory uncertainty. The SEC, for example, has not yet issued a ruling on whether Bitcoin and other cryptocurrencies are securities.
How to Make Money Trading Cryptocurrencies
There are a number of ways to make money trading cryptocurrencies.
Buy and Sell Cryptocurrencies
The most basic way to make money trading cryptocurrencies is to buy and sell cryptocurrencies on a decentralized exchange. Decentralized exchanges do not require users to create accounts and are usually anonymous.
Buy Low and Sell High
The most basic principle of trading is buy low and sell high. When buying cryptocurrencies, look for coins that are trading at a discount to their intrinsic value. When selling cryptocurrencies, look for coins that are trading at a premium to their intrinsic value.
Hodl
Hodl is a term used by cryptocurrency traders to describe the act of holding cryptocurrencies for the long-term. Hodling is a long-term investment strategy that is focused on buy and hold.
Margin Trading
Margin trading is the practice of borrowing money from a broker to purchase cryptocurrencies. Margin trading can magnify profits but also magnifies losses.
Shorting
Shorting is the practice of selling a cryptocurrency that you do not own in anticipation of buying the same cryptocurrency back at a lower price. Shorting can be used to profit from a price decline.
Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and to control the creation of new units. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009.
Cryptocurrencies are traded on decentralized exchanges and can also be used to purchase goods and services. Bitcoin, for example, can be used to purchase items from Overstock.com, Expedia, and other retailers.
Cryptocurrencies are volatile and can experience large price swings. Bitcoin, for example, has a history of large price swings. In 2017, the price of Bitcoin surged from $1,000 to nearly $20,000 before crashing to below $6,000. In 2018, the price of Bitcoin has ranged from $6,000 to $11,000.
Cryptocurrencies are still relatively new and are subject to regulatory uncertainty. The SEC, for example, has not yet issued a ruling on whether Bitcoin and other cryptocurrencies are securities.
How to Make Money Trading Cryptocurrencies
There are a number of ways to make money trading cryptocurrencies.
Buy and Sell Cryptocurrencies
The most basic way to make money trading cryptocurrencies is to buy and sell cryptocurrencies on a decentralized exchange. Decentralized exchanges do not require users to create accounts and are usually anonymous.
Buy Low and Sell High
The most basic principle of trading is buy low and sell high. When buying cryptocurrencies, look for coins that are trading at a discount to their intrinsic value. When selling cryptocurrencies, look for coins that are trading at a premium to their intrinsic value.
Hodl
Hodl is a term used by cryptocurrency traders to describe the act of holding cryptocurrencies for the long-term. Hodling is a long-term investment strategy that is focused on buy and hold.
Margin Trading
Margin trading is the practice of borrowing money from a broker to purchase cryptocurrencies. Margin trading can magnify profits but also magnifies losses.
Shorting
Shorting is the practice of selling a cryptocurrency that you do not own in anticipation of buying the same cryptocurrency back at a lower price. Shorting can be used to profit from a price decline.
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