Without any question, 2020 is the year of Bitcoin. Even after the pandemic shook the financial world, Cryptocurrency stood its ground and bounced back, hitting its all-time best price evaluation. This created a market where people have now started seeing Cryptocurrency as an asset class to have a store value similar to that of Gold.
The Cryptocurrency assets are here to stay for a longer period. Whatever stories you hear about Crypto traders making a profit in the Crypto trade market, those are true. And the profit you make in the Crypto trade market is real.
Though Crypto trading is profitable, it is not as easy as you think. It is much more complex as it includes mathematical calculations. And this complexity gets more complex with the volatility of the market.
If you are knowledgeable in the Crypto market, you will convert the volatility in your favor. Here is how you can do it.
- Technical analysis.
- Adopt a sustainable pace.
- Stay updated with the latest news and technologies.
- Implement stop losses.
- Use prudent leverage.
Things To Keep In Mind When Trading In Cryptocurrencies
Before you enter the Crypto trade market, let us warn you fiat currencies are more stable than Cryptocurrencies. If you still want to invest in Cryptocurrencies, you are more than welcome. So what we are waiting for, let’s jump on the things to consider while you start investing in Cryptocurrencies.
1. Investment Or Betting
Before you start investing in the Crypto trade market, think about why you are entering the market. Whether you are in the market to make a high profit or for long term investment. But the approaches need a different mindset. Hence, be very clear about it. Bitcoin Freedom can pull off both possibilities.
Both investment and exchanges are common in the Cryptocurrency trade market. According to one of the Crypto experts, the Crypto industry has no certainty about price evaluation. You might see the Cryptocurrency price moving up in the positive curve, and the next moment it can drop below the red mark.
Regulation related to digital currency has always been one of the major flaws of Cryptocurrency. Though the regulation network is still small, it has given hope to many Crypto traders out there.
Currently, IRS, CFTC, and SEC are trying to create the relevant lawsuit and legal procedure to regulate Cryptocurrencies. The IRS has recently announced that the Crypto Asset will be considered property and will be taxed accordingly. This can be considered the first step towards legal regulation of Cryptocurrencies.
The custody of the Crypto assets has always been the major issue. Some platforms provide full custody of the Crypto assets, while some offer custody partly. However, with the increased regulation in the future, this problem is temporary and soon resolved.
For instance, if a company wants to open up a Crypto trading platform and have more than $15 million in Crypto assets, they are asked to employ qualified custodians to safeguard the client’s Crypto assets. Currently, custody services are available to only a few platforms that work independently.
4. Integrate Stop Losses
The volatility of the Crypto trade market is one of the attracting features of the traders and investors to make huge profits quickly. However, this volatility has been the cause of several massive losses where people have lost all their capital investment in one full scoop.
The market’s volatility makes the trade unpredictable. To ensure that you do not fall victim to its volatility, it is lucrative to stop-loss practice. That means, when a particular point in the loss is reached, you see your asset to stop yourself from accruing more loss.
5. Use Prudent Leverage
Leveraging your Crypto assets is a good idea to boost your profit. But at the same time, you are playing with the risk that you can accrue loss of a couple of folds. Even a little hindrance can affect the market. Hence, it becomes important that you manage your Crypto assets effectively for an effective leverage practice.
The Bottom Line
With that being said, no, you know what things you need to consider before entering the Crypto trade market are. Is this article helpful? Do let us know in the comet section. And if there is anything that you need to know more about Cryptocurrency.