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Last Updated on January 20, 2024 by Work In My Pajamas
Trading Cryptocurrency is not only for the younger ones with the cool apps and fashionable gadgets. Old money and even Wall Street have set their eyes on the very profitable investment and currency. In fact, the world’s largest exchange operator, the Chicago Mercantile Exchange Group, is planning to offer financial products related to Bitcoin to the public on December 18, 2017.
This adds legitimacy and trust to the already booming cryptocurrencies, with bitcoin already showing growth of more than 1000% in value from January 1, 2017 to December 7, 2017.
The great news is that you do not need fancy computers to start trading the cryptocurrency today. You will actually only need two things to start right away. You need a good cryptocurrency wallet where you store your coins and a broker to help you find a buyer or seller of the said cryptocurrency.
In This Post:
Your Cryptocurrency Wallet
Creating and keeping a cryptocurrency wallet is a vast and important topic. It needs its own in-depth article. So that you will not get confused, we will focus on the relation between your wallet and your trading.
Your wallet is where you store, send and receive your cryptocurrencies. Without it, you cannot trade since you basically do not have any cryptocurrency.
Opening a wallet from official sources would be the best course of action. This provides you privacy and security. The most popular and trusted wallet would be from the developers of Bitcoin.
The same can be said of the second most popular cryptocurrency which is Ethereum. Other cryptocurrencies have their own wallet as well. How much does it cost to buy Ethereum? The cost of Ethereum depends on the type you choose, with some costing less than $50 and others being more expensive. There is also an array in between; however it can be difficult to find out which one will work best for your needs before making this decision yourself!
A broker would also offer to make a wallet just for you. If you lean more towards convenience, then this option would be best for you. But, do know that stricter regulations are already in place compared to a year ago.
This is true for those accounts that are under the jurisdiction of the United States. The CFTC and the IRS are keeping a close watch.
Once you ready have setup your electronic wallet, be it from an online broker or from the cryptocurrency developer, you should now proceed to finding a good broker for you.
Your Cryptocurrency Broker
It is fairly easy to find a cryptocurrency option broker nowadays. Searching for “cryptocurrency broker” in Google would show more than 700,000 results. The difficulty lies in finding the best broker for you.
Again, this is a topic that needs to be discussed properly and we do not want to give you the short end of the stick. We will talk about this in relation to your trading. There are conventional brokers that lets you trade with charts actively. The second type functions less of a middleman and more of a marketplace to connect buyers and sellers.
What a cryptocurrency broker does is to find a buyer or seller of your cryptocurrency. That is why it is advisable that you choose the broker that has a lot of users. The caveat is that some brokers are in hot water. This is due to the laws that regulate cryptocurrency, especially to laws regarding money laundering and other illegal activities which asks for personal information.
If this is your first time trading the cryptocurrency market, it is advised that go to the more conventional ones like Coinbase, Bittrex and Bitfinex, all of which have physical offices in the United States.
You can also go to the more popular forex brokers like eToro, a forex broker that is registered in the UK and allows you to copy the trades of professional traders.
You can also trade cryptocurrency without going through a broker. This is by going to the buyer or seller themselves rather than through a middleman. Websites like LocalBitcoins and Coinmama allows trading without any paperwork, so you can get privacy and do transactions without the hounding eye of the government.
The difference between the two kinds of brokers is that the first one is appropriate for those who want to trade actively, using charts and a friendly interface. The second kind of broker is more appropriate for those who are seeking to invest by holding the cryptocurrency in your possession.
Bitcoin has often been requested for ransomware payments. If you are a victim of ransomware then you should consult a company such as Amazing Support in the UK.
After getting your electronic wallet and opening an account with the cryptocurrency broker, then you can start your journey towards financial freedom and privacy through the cryptocurrency world.
I think that people should not put as much trust (or money) into Bitcoin. Bitcoin is a good investment (over long term) but it’s just the tip of the iceberg. It’s much better imho to invest a small, monthly amount (maybe 2-4% of your monthly income) into 25 or more different altcoins. This will diversify the risk and increase the chances of you hitting a great coin (or a few of them) over 3-5 years. Crypto investments shouldn’t be done over a few months because they aren’t as profitable (especially with small investments).