What is crypto🧐🔍
Crypto is a digital payment platform that eliminates the need to carry physical money. It only exists in digital form, and although people mainly use cryptocurrencies for online transactions, it is also acceptable for some physical purchases. Unlike traditional money that is only issued by governments, digital currencies can be obtained from various companies in the crypto market.
Cryptocurrencies are commonly referred to as crypto because they use cryptography, making them invulnerable to counterfeiting or double spending. This makes crypto currencies far from manipulation or government intervention. Cryptocurrencies are fungible, meaning that the value of the digital currency remains the same when it is bought, sold or traded.
Owning cryptocurrency does not involve any physical or tangible elements. While you hold traditional currency in a bank or financial institution, you store cryptocurrencies in a digital wallet. Investors are free to use it however they want, store it, or transfer it to another digital wallet without relying on a third party as is the case in the traditional banking system. However, while banks insure funds held in bank accounts against loss, cryptocurrency exchanges do not provide the same level of protection against loss.
Bitcoin, the world's first widely recognized cryptocurrency, has gained immense popularity. At one time, Bitcoin was synonymous with cryptocurrencies in general as a name. However, investors should be aware that the cost of holding Bitcoin has risen significantly. In 2021, the price of one bitcoin reached $68,000, but as of mid-2023, it was trading at around $30,000. But the good news is that you don't always have to invest in a digital currency entirely, you can buy or trade small portions of it.
How are crypto currencies traded?
One of the simplest ways to enter the crypto market is through trading cryptocurrencies, similar to the way you trade traditional securities such as stocks, commodities, bonds, or ETFs. To get started, you can open an account on a cryptocurrency exchange or with a traditional online broker. Your account can be funded by linking your bank account with the crypto exchange or using a cash wire transfer, although there are different rules on cryptocurrency exchanges. Once your account is funded, you can start trading the cryptocurrency of your choice.
There are two main ways to trade cryptocurrencies: either buy and own cryptocurrencies or speculate on price movements through margin contracts without actually owning the underlying cryptocurrencies. When trading derivatives, you can take a long position if you think the value of your cryptocurrency will increase or take a short position if you expect it will decrease.
Just as with traditional investing, it is best to have a trading strategy when trading cryptocurrencies.#Binance
