The best option depends on the investor's goals and strategy.
1. Spot Trading:
Description:
Cryptocurrencies are actually purchased on the spot market (Spot) and held in your wallet, either for long-term storage or to sell later when the price rises.
Features:
Ease of use: Suitable for beginners as it is based on direct purchase.
Relatively lower risk: There is no leverage, which reduces the possibility of losing your entire capital.
Asset Ownership: When you purchase, you own the currency outright and can use it (for transfer or trading).
Disadvantages:
Profit depends only on the price increase.
It requires more capital to get big profits.
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2. Futures Trading:
Description:
It is based on futures contracts that allow you to speculate on the rise or fall in the prices of cryptocurrencies without having to actually own them.
Features:
Leverage: You can trade relatively large amounts with a small capital, which increases the potential for profit.
Profit in both directions: You can make profit both when the price rises (Long trade) and falls (Short trade).
Diversification of strategies: Supports hedging and risk reduction in portfolios.
Disadvantages:
High Risk: Leverage magnifies losses as much as it magnifies profits.
Complexity: Requires a deep understanding of the market and risk management.
Non-ownership of assets: You do not own the currency itself, which prevents you from using it outside of trading.
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Which is better?
If you are a beginner or want to invest long term:
Spot trading is the best option, because it is less risky and does not require a deep understanding of complex trading.
If you are a professional or looking for quick profits from speculation:
Futures trading may be the most suitable, provided that you master risk management tools and are able to read the market accurately.
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advice:
Start with spot trading if you are new to cryptocurrencies to understand the market first. If you decide to try futures, start with a small capital and only invest what you can afford to lose.