The coronavirus outbreak and a subsequent lockdown have altered the world and caused a huge number of businesses to go online. No wonder, the popularity of cryptocurrency has only increased. We now see companies use Bitcoin in iGaming or retail, and blockchain in supply chains or data management. It is no longer surprising.
Cryptocurrencies are now the universal alternative to more traditional methods of exchange such as cash or credit cards. What’s more, cryptos are an effective way of earning, which can make you rich overnight. A quick look at the Bitcoin price says it all. The number-one crypto has been recording new all-time highs since early December and there’s no stopping it.
Advantages of cryptocurrency
You are to experience fewer risks
When it comes to using crypto, all the operations do not carry any personal information of either a sender or a receiver. That’s why they are secure. Besides, there’s no central server that controls the transactions. So, users are protected and should not be afraid of online fraud.
Everyone who starts mining or trading Bitcoin thinks that all the processes are absolutely anonymous. In fact, it’s possible for everyone to view any on-chain transaction. However, Bitcoin is not the only crypto out there. Coins like Zcash, Verge, Monero, etc. are privacy-focused and allow for confidential transactions, meaning it’s difficult to link those transactions to originators.
Trouble-free international trade
It is fair to say that cryptocurrencies have shaken up international trade. The reasons for this are numerous: the lack of exchange rate, fast money transactions, low taxes, and minuscule fees. Moreover, blockchain platforms make international trade as convenient as possible. You don’t need to look for proper financial institutions to back international deals — you can do everything via your computer.
Technologies are moving fast. The same is true for blockchain. It has to adjust to new realities. That’s why adaptability is of prime importance. Over the years, blockchain has evolved significantly. The main changes involve the increased transaction speed and scalability, reduced energy consumption, and diverse improvements brought about by smart contracts.
Cryptos to Trade: Making the Right Choice
The main thing you should realize is that there is no single answer to the question “Which crypto is better to invest in?” The number of digital currencies is constantly growing. Today, there are over 8000 different coins.
The undisputed leader is Bitcoin. If you study its price history, you will definitely know that its value has been growing all the way through. For instance, in 2014, it cost $450, while in 2017, its price was almost $20,000. So, it’s rather difficult to determine how much this or that coin will cost in a month or in a year. Of course, it’s always a good idea to trade Bitcoin while it’s still the main cryptocurrency these days.
However, to become a successful crypto trader in 2021, you should also pay attention to the following cryptocurrencies:
- Ethereum. ETH is considered to be the most influential cryptocurrency. The greater part of DeFi technologies is based on Ethereum.
- Tron. The modern digital entertainment industry is impossible without this crypto. Its price continues to grow.
- Ripple. XRP is a leader in the digital banking industry. The major advantage of this crypto is swift transactions.
Moreover, it’s of prime importance to pick a proper crypto trading platform. No matter whether you are going to trade on a daily basis or practice dollar-cost averaging, it’s necessary to cooperate with reliable and profitable crypto exchanges. To make the right choice, you have to pay attention to the following aspects:
- Fees. Nowadays, there are so many crypto trading platforms. In 2021, their number is expected to grow further. The problem is that the rates differ significantly. That’s why before you start trading, you have to research the market carefully.
- Payment options. It’s necessary to consider which fiat or crypto pairs the trading platform supports. The more payment methods the platform offers, the more convenient the trading process is.
- Types of verification. Although some users prefer to work only at anonymous platforms, most exchanges still require verification. Consider it as a way to prevent fraud and money laundering.
Key Features of Crypto Trading
If you decide to start crypto trading in 2021, you have two possible options — using a CFD trading account or working directly with crypto exchange platforms.
A contract for differences is a fast way to make money. You profit from the difference between the current and closing position values on the market. You have to deal with leverage when trading, which may impact your trading returns. When using CFD, it’s up to you to hedge your portfolio in order to minimize or mitigate possible risks.
Trading directly on crypto exchange platforms is different since you deal with real cryptos. To succeed in it, you have to watch the price movements carefully, read charts, and learn to recognize market trends and signals. It helps you make informed decisions and spot the right conditions for market timing.
Crypto trading is available 24/7. So, you can choose the most profitable and convenient platform.
Possible Risks of Crypto Trading
Although crypto trading is expected to boom in 2021, it’s still necessary to remember about the possible risks. The first thing to take into consideration is that nowadays there are thousands of cryptocurrencies. The values of most coins are intercorrelated. In some cases, this may cause massive sell-offs and buy-ups, which will affect the total market cap significantly. Moreover, while crypto trading is all about digital technologies, glitches are still possible. Also, you should be ready to face considerable price variations.
It seems weird but another common problem with crypto trading is the loss of private keys. Without such keys, you can’t access a digital wallet. While hacking private wallets is almost impossible.
To sum it up, it should be noted that crypto trading seems to evolve further into 2021. If you want to make handsome money and trade like a pro, it’s necessary to choose a proper cryptocurrency, an effective trading platform, and be ready to take risks.