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Cryptocurrency is a digital currency that uses cryptography to verify and authorize transactions on its publicly accessible ledger called the blockchain. This is the reason it is called a decentralized asset.
It means it is not controlled by any government or central authority, such as a bank that must verify the purchase or sale and facilitate it using a bank account. Instead, you can connect your wallet and send your chosen cryptocurrency immediately.
Despite the considerable market downturn in 2022, some aspects of cryptocurrency are navigating the stormy waters reasonably well.
Digital assets have become increasingly popular recently, due to their potential for faster and cheaper transactions, as compared to outdated traditional banking methods. To illustrate, cryptocurrency casinos are beginning to rise to prominence, as you do not need to use your bank account when visiting them. Instead, you can connect your wallet and play straight away. It is one of the many innovative ways you can enjoy strategy games on this page.
There are many avenues into the market, and despite the negative sentiment that has gripped traders over the last six months, there are still many ways to enter the digital asset market if it interests you.
Different Between Investing and Trading
Although trading and investing take place in the same online marketplace, there are a few differences to discuss. For example, trading tends to focus on strategies where individuals or corporations will attempt to make a profit more quickly.
There are dozens of potential ways to trade; some include rapid methods such as scalping, which can take place over a few minutes, or more extended strategies such as swing trading, which can take place over a few hours or the length of the day.
Cryptocurrency markets are open 24 hours a day. However, due to the market still being in its novice stages, it has yet to be subject to the same levels of fierce regulation as traditional markets such as stocks and forex.
Investing takes place over months or years. Warren Buffet is the best example of somebody who invests successfully and doesn't focus on short-term price differences.
Instead, he identifies an asset he thinks has potential and will sometimes hold it for decades until it makes ample returns. Although Buffett isn't the biggest fan of cryptocurrencies, his investment strategy is bulletproof, which is why he is one of the world's wealthiest men.
How To Trade or Invest In Cryptocurrency
The most common methods used to invest in cryptocurrency are Coinbase and Binance. This is because they are the two biggest exchanges online that handle the most considerable volumes over any given 24-hour period.
Both platforms offer different features and fees, so it's important to research which is best for your needs. You can trade Bitcoin and hundreds of other altcoins on either of these exchanges.
Another way to invest in cryptocurrency is by sending it to a cold storage wallet. Cold storage wallets are physical devices that store your private keys offline. Therefore, if you don't have any immediate plans to trade your cryptocurrency, this is the safest bet recommended by most analysts and experts.
This isn't the only advantage of a cold storage wallet; they also allow you to store multiple types of cryptocurrencies simultaneously. Therefore, they are a fantastic choice for those investors who want to store numerous assets securely.
As the recent collapse of FTX showed, exchanges can be susceptible to owners acting in bad faith, and it has caused some people to lose thousands of dollars. A cold storage wallet completely mitigates this risk.
There are dozens of different types of strategies you can implement. This includes strategies to invest your cryptocurrency over a considerable length of time or to trade it over a much smaller period.
Investing in cryptocurrency in 2023 will be an interesting ride. Given the sharp and volatile market correction last year, many retail investors and institutional investors have thought again before re-entering the space.
Many significant cryptocurrencies in the top 15 by market cap have dropped by over 50% in value in the last 12 months. Some assets decreased even further, by more than 80%.
Compared to other markets, cryptocurrency is the most volatile. While some traders and investors have made a considerable sum of money, many lost sickening amounts as they invested during the peak of the bull run towards the end of 2021.
While investing in cryptocurrency may seem daunting, the exchanges we have mentioned today emphasise user accessibility and having an interface that is suitable for investors to navigate easily.
Some banks in the UK, such as Revolut, offer a service where you can purchase cryptocurrency through your bank account, so the opportunities are vast. More financial institutions will likely facilitate customers being allowed to trade cryptocurrencies on their platform in 2023, and if the market picks up, it could be a huge year.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.