Crypto Talk #4 All you need to know about investing in Crypto-currencies before you do.

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The last few years have witnessed a financial revolution of some sort with the coming of the crypto-currency sector. This revolution has seen the price of cryptocurrencies such as Bitcoin climbing as high as $20,000 at a point coming from a commodity that was once worth a few dollars.

It is however imperative that you understand this market, especially as regards its mode of operation and the type of trading that is obtainable to defining your path in the market.

There are two types of investors as far as the cryptocurrency market is concerned namely the long-term investing and short-term trading. We will go over both of them to help you decide which one you belong to.

Long-term investing:

These categories of traders are those who hold crypto-currencies for an extended period. This time frame may be for week, months or years. One thing about observing trends in price over an extended period is that it gives traders the experience that is required for making informed decisions while also avoiding a short-term drop in value.

Therefore, if you are of the opinion that crypto-currencies will maintain steady growth over an extended period and hence do not want to experience the stress that comes with a short-term drop in value, this may well be the best investment choice for you.

Short-term investing:

This is the type of trading which forgoes the stability that comes with trading in crypto-currencies for the possible short-term price variations. It usually involves purchasing and holding crypto-currencies for a few hours or a day. This is indeed for those who grab opportunities as they come.

Benefits of trading in Crypto-currencies:

Just as it is with trading in Forex, trading in crypto-currencies has its advantage, and we will take a look at a few of them

Cost and speed of transactions:

More often than not, the exchange platform you are making use of will collect a small percentage of your purchase as a form of transaction fee for the service provided. The significant difference between dealing in fiat currencies and crypto-currencies is the fees that are incurred.

More often than not, the cost of having crypto-currencies transferred is usually quite cheaper than the price of making use of bank transfer and credit cards

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Volatility:

It is a standard feature for traders to make an impressive profit within a rather short period as the prices of particular crypto-currencies rise. The fact that the market is quite volatile with possible price falls does not, however, take away the profitability experienced when the price falls

Always open:

As far as tock and commodities are concerned, you can only trade them during working hours, while forex can just be purchased during the weekdays. However, as far as crypto-currencies are concerned, they can be bought every day, every time and anywhere.

Precaution to be observed:

As far as crypto-currencies are concerned, there is always the possibility of incurring significant risks, there is a chance of losing all your investment is quite high, and as such, you should exercise great care when investing.

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Interested in my previous blogs:

• Crypto World #5 A few dents to consider when investing in cryptocurrencies.
• Proven tip to help you find the next big crypto-currency.
• Crypto Talk #3 Is Bitcoin regime coming to an end?
• What is Blockchain? A beginner’s guide to Blockchain Technology.
• Crypto Talk #2 Is India going to Ban the Cryptocurrency Trading?

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