Cryptocurrency has become a household term in recent years. Bitcoin billionaires are popping up everywhere, and lots of curious consumers are wondering how they, too, can hop on the bandwagon of crypto trading, buying, and selling. If you’ve ever been interested in trading cryptocurrency, here’s what you need to know:
1. Buy Some Currency at Coinbase
Pick a currency you like and purchase some with government currency (USD, EUR, GBP, etc.). Bitcoin is a pretty safe bet, but Coinbase offers BTC, ETH, and LTC are for anyone who wants to branch out.
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2. Start in Easy Mode
If you’re totally new to crypto trading, start in Easy Mode. Easy Mode is a great place to get started watching graphs, finding good trading prices, and understanding when to sell. While it can be tempting to skip right pasty Easy Mode, it’s critical to learn how everything works and be more successful as you move forward with your trading.
3. Stick With Prominent Coins for a Bit
As you make your way into crypto for the first time, stick with prominent coins like Bitcoin and Ethereum to begin. These are somewhat more stable, although it could change in the future.
What to Know Before You Begin Trading
New to the world of cryptocurrency? Here are a few things to know before you begin trading:
Crypto exchanges aren’t part of the normal stock exchange. Coinbase is the most popular, but GDAX is another common version, without the high fees. Neither operates alongside Wall Street and its exchanges, although they share the same general mechanics.
Cryptocurrency stocks are also an option. Cryptocurrency stocks exist on the stock market and allow you to get into the crypto game without dealing directly with currency.
The crypto market is incredibly volatile. Even if you make a fortune with crypto, it’s easy to lose it in a heartbeat. Keep this in mind as you venture into selling and trading crypto.
There are tax implications to crypto. If you’re going to trade crypto, you need to understand the tax implications. If you don’t, it’s easy to fall into a nasty trap and wind up with a severe case of sticker shock.
Beginners should always start by choosing a company with a good reputation. As a general rule, the company should offer both a wallet and an exchange, since it keeps the process simple.
Crypto mining is not the same thing as trading. One way to invest in crypto is through cryptocurrency mining. While mining includes more complexities than straight investing, it can be a nice way to invest a small sum of money and make back some of the cost of a mining rig.
Only invest what you can afford to lose. Again, the crypto market is volatile and you don’t want to overextend yourself.
When to Exit a Crypto Trade
As a general rule, you don’t want to participate in margin trading unless you’re an experienced trader. Because crypto is so volatile, you could lose all your money in a matter of moments. If you come across a margin trade, it’s generally a good time to exit the process.