There exists a tendency for multiple investors to buy cryptocurrency and hold it for several years, believing this approach will yield profits. On the contrary, this strategy doesn’t always prove to be profitable, as digital asset prices can fluctuate rapidly. Therefore, many experts advise making money not only from the growth but also from declines in market value. Let’s delve deeper into the matter.
The Portion of Crypto Wisdom
Expanding across the whole world, cryptocurrency is a perfect arena for volatile trading. If we judge the cryptocurrency market based on media headlines, it may seem that this is the area where all assets rise in value nonstop. We customarily review reports that Bitcoin has broken another historical record, experts predicting a bright future for Ethereum, and Solana rising in price by over 60 times this year. Moreover, with the best crypto trading apps, such as mt5 apk, a regulated activity is guaranteed.
Currently, cryptocurrencies are becoming all the rage. Unfortunately, not everyone holding cryptocurrency in their portfolio has become wealthy. Several tokens have dramatically depreciated. For example, Bitcoin Cash, once valued at approximately $3,000 in 2017, has fallen to about $600. XRP has seen a staggering decline, losing 2.5 times its value compared to 2017 levels.
Given these realities, the “buy and hold” strategy isn’t always relevant in the crypto market. Even Bitcoin, the most notorious currency among investors, peaked at $67,000 in October but has since dipped to about $60,000. This decrease means that those who acquired Bitcoin at its peak are currently at a loss, and it’s challenging to predict when these brokers may see a light at the end of the tunnel.
Simultaneously, you can earn on cryptocurrency not only by holding the asset over the years, but also by actively trading on the market. That is, having bought cryptocurrency, you can sell it as soon as its price escalates, even by just a few percent. Furthermore, it matters little whether cryptocurrencies rise or fall; the objective is to seize the trend.
A striking example of active trading is the Shiba Inu cryptocurrency, which is widely known thanks to Elon Musk’s tweet. The total capitalization of this cryptocurrency used to count $15.16 billion at the time of writing, and the daily trading volume reached 15.49 billion. This indicates high trading activity surrounding this token, as brokers aimed to capitalize on temporary price fluctuations rather than expect long-term growth.
Benefits for Crypto-Savvy Traders
Active speculating has provided multiple investors with a fabulous opportunity to profit across currency, stock, and commodity markets. Nevertheless, digital assets stand out with a few intangible perks:
- High Volatility. Conservative investors are cautious about cryptocurrencies precisely because of this feature. For instance, if Bitcoin falls or rises by 10% in a day, this would not be surprising. Prices for less popular tokens can fluctuate even more drastically. For an active trader, such “swings” are an ideal environment to earn from price fluctuations.
- Trading Without Breaks. Unlike the commodity and currency market, which cease on weekends, the cryptocurrency market never “sleeps”. You can trade it on weekends, holidays, days, and nights. This is convenient if trading is an additional source of income for you. After all, it is worth dedicating a few hours to trading on weekends without impacting your primary occupation.
- A Wide Choice of Assets. The number of cryptocurrencies has already reached into the thousands. Additionally, there are tokenized commodity assets, stocks, and currencies. This versatility drastically expands the possibilities for speculating.
- Low Entry Threshold. Particular financial instruments require a substantial investment. Namely, one Amazon share costs over $3,000, while a Tesla share is around $900. Conversely, a fraction of Bitcoin can be bought for around $20. It is worth paying attention that tiny investments don’t result in big returns. Concurrently, active trading allows you to multiply money much faster due to the large number of transactions, since the threshold for entry into active trading in many companies is quite low.
With these benefits in mind, it’s possible to develop your effective strategy for crypto trading to stay afloat.
How to Choose a Platform for Trading
Selecting the right crypto exchange is crucial for seamless trading. Here are the core factors to bear in mind:
- Transaction Commissions. First and foremost, you should pay attention to the commissions for transactions. For those who buy assets and hold them for several years, the commissions may not be as pivotal. If you are eager for effective trading, sky-high commission rates can diminish your profits to a great extent.
- Spreads. On exchanges with low activity, the discrepancy between buying and selling prices of assets may be impressive. In these circumstances, trading may not be worthwhile.
- Reliability of the Platform. Be wary of less reputable exchanges that may be short-lived. Research the feedback and reputation before confirming the status of the platform.
By considering these aspects, you can leap into the exciting world of crypto trading and stay tuned.
This article contains information about a cryptocurrency presale. Crypto Economy is not associated with the project. As with any initiative within the crypto ecosystem, we encourage users to do their own research before participating, carefully considering both the potential and the risks involved. This content is for informational purposes only and does not constitute investment advice.
