How to Trade Cryptocurrencies – The Basics of Investing in Digital Currencies
Whether it’s the idea of cryptocurrencies itself or diversification of their portfolio, people from all walks of life are investing in digital currencies. If you’re new to the concept and wondering what’s going on, here are some basic concepts and considerations for investment in cryptocurrencies.
What cryptocurrencies are obtainable and how do I buy them?
With a market cap of about $278 billion, Bitcoin is the most established cryptocurrency. Ethereum is second with a market cap of over $74 billion. Besides these two currencies, there are a number of other options in addition, including Ripple ($28B), Litecoin ($17B) and MIOTA ($13B).
Being first to market, there are a lot of exchanges for Bitcoin trade all over the world. BitStamp and Coinbase are two well-known US-based exchanges. Bitcoin.de is an established European exchange. If you are interested in trading other digital currencies along with Bitcoin, then a crypto marketplace is where you will find all the digital currencies in one place. Here is a list of exchanges according to their 24-hour trade quantity.
What options do I have to store my money?
Another important consideration is storage of the coins. One option, of course, is to store it on the exchange where you buy them. However, you will have to be careful in selecting the exchange. The popularity of digital currencies has resulted in many new, unknown exchanges popping up everywhere. Take the time to do your due diligence so you can avoid the scammers.
Another option you have with cryptocurrencies is that you can store them yourself. One of the safest options for storing your investment is hardware wallets. Companies like Ledger allow you store Bitcoins and several other digital currencies in addition.
What’s the market like and how can I learn more about it?
The cryptocurrency market fluctuates a lot. The volatile character of the market makes it more suited for a long-term play.
There are many established news sites that report on digital currencies, including Coindesk, Business Insider, Coin Telegraph, and Cryptocoin News. Besides these sites, there are also many Twitter accounts that tweet about digital currencies, including @BitcoinRTs and @AltCoinCalendar.
Digital currencies aim to disrupt the traditional money and commodity market. While these currencies nevertheless have a long way to go, the success of Bitcoins and Ethereum have proven that there is genuine interest in the concept. Understanding the basics of cryptocurrency investment will help you go in the right direction.