With ever-increasing inflations combined with meager wages, it is quite difficult to sustain life. Everything around us has become expensive. Even the stock market is in the bearish phase.
The government in its attempt to control inflation has increased the interest rates. Already during the pandemic, many jobs were lost, and some more jobs were cut as we combat inflation. Some jobs have disappeared completely.
Many small businesses are finding it challenging to stock up their inventories as fewer and fewer buyers are purchasing the required materials. Many small restaurants have gone broke. Everybody is searching for an alternate source of income.
Many are considering investing in cryptocurrencies. If you are considering opting for cryptocurrency trading platform then let this article act as a guide for you to decide if trading in cryptos is good or not.
Benefits of trading cryptocurrencies
You are guessing whether your preferred market will rise or fall in value without ever taking ownership of the digital asset when you trade cryptocurrencies. This is done by using derivative products like CFDs. The benefits of crypto trading include:
Cryptocurrency volatility
Part of what makes this market exciting is the volatility of cryptocurrencies. Rapid intraday price movements can provide traders with a variety of opportunities to go long and short, but they also come with increased risk. So, if you decide to venture into the cryptocurrency market, make sure you have done your homework and developed a risk management strategy.
Cryptocurrency market hours
The cryptocurrency market is usually available to trade 24 hours a day because there is no centralized governance of the market. Cryptocurrency transactions take place directly between people on exchanges worldwide. However, there may be periods of downtime when the market is rearranging due to infrastructure updates, or “forks.”
Improved liquidity
The cryptocurrency market is believed to be illiquid because the transactions are spread across multiple exchanges, which means comparatively small trades can have a huge impact on market prices. This is part of the explanation for why cryptocurrency markets are so volatile.
Leveraged exposure
It allows you to open a position on “margin”—a deposit worth only a part of the full value of the trade, as CFD trading is a leveraged product. In other words, you could obtain greater exposure to the cryptocurrency market while only committing a small portion of your capital.
How Bitcoin came into existence
Cryptocurrency or primarily Bitcoin came into existence when someone thought to reduce the time and money required to transfer from one country to another.
Traditionally when you wish to transfer some cash from the USA to the UK, then the central bank of America will contact the central bank of the UK and verify if the said account where you wish to transfer exists or not. Once the account is verified the money is then transferred from your account to the intended account in the UK. The entire operation takes a few days and is equally expensive.
To save time and money a fictitious person named Satoshi Nakamoto proposed a digital currency that will be a borderless, fast, and transparent mode of transfer of wealth from one country at a cheaper rate.
How Cryptocurrencies Work
Unlike in a banking system where the accounts are verified by the central banks, in cryptocurrencies there are multiple nodes where each transaction is verified, thus ensuring transparency.
As the bank records any fund transfer in a book of ledgers, similarly each crypto transaction is recorded in blocks and each successive transaction is linked, thus the blockchain technology.
While cryptocurrency trading the trader will remain anonymous and can only be identified from the private key they have when opening up a cryptocurrency account. Every account will have a public key where the sender sends in the cash from their private key.
Nodes are where the cryptocurrency transactions are verified and after verification of each block,
with the help of advanced mathematical codes, a new block is added. The verifiers also called the miners get a reward for solving complicated mathematical equations that make a new block.
Since traditional transfers of funds from one country to another country are carried out through central banks, these transferring activities can be monitored by the government and can also block the transfer. However, when funds are transferred from one account to another, there are several nodes to verify it, so the data cannot be manipulated or blocked as the same data reflects around several other nodes. It is highly impossible to duplicate a trade.
Since the cryptocurrency can be stored on a crypto exchange or offline using digital wallets, you can amass a lot of wealth in cryptocurrencies without the government ever knowing about it. This is also one of the major factors that attract many towards cryptocurrencies. As Crypto trading for beginners, you should understand these advantages.
Another factor is that you can save as many cryptos as you can and they can be easily accessed at your fingertips by using a smartphone. You can also start cryptocurrency trading once you have opened up an account with a cryptocurrency exchange or a crypto broker. The cryptocurrency market never sleeps so you can keep a day job and still trade at night. You can also trade in cryptos even on weekends.
As more and more people are adopting cryptos, several financial institutes are offering cryptocurrency to be kept as collateral and you can get a home loan. Several other brands accept cryptocurrency as an alternate source of payment. Tesla is accepting payments in Doge coins.
The President of El Salvador is planning to create the first Bitcoin City, where all the trade will be carried out in the form of cryptocurrencies. Even municipal taxes are planned to be collected in the form of cryptocurrencies. Since crypto mining created a lot of carbon footprints, the President is planning to use the thermal energy produced by the nearby volcanoes to mine the cryptos.
Many in Mexico are actively engaged in cryptocurrency trading. To hedge inflation, they found refuge in the cryptocurrency market. So the future is looking bright when cryptocurrency is questioned. Many in the government are trying to find out the viability of the blockchain technology used in cryptocurrency.
