As the economy slowly wakes from its pandemic slumber, business and individuals are on the hunt for different avenues to explore in order to help claw back lost money during the lockdown. Although it may not seem like a great time to begin trading in cryptocurrency, the fact that prices are at their all time low makes the possibility much more inviting. However, it's vital to know what you are getting yourself into before entering.
An investment made at the right time can give investors the leverage that they need. Bitcoin, one of the wealthiest crypto currencies before the pandemic, has now dropped to half its value in a two day plunge as the economy begins to open. This makes the currency more affordable now than it was before entering the pandemic.
Spare cash is a great safety net, and saving it for a rainy day is a must. However, it’s not wise to let all your capital lie dormant, especially when prices are at their all time low. There are different types of investments out there and investing your money in cryptocurrency can help boost your financial background.
Cryptocurrencies have given financial leverage to many people without a formal financial background, especially young individuals. Here's a look at some of the reasons why it might be worth investing in crypto at the moment along with some basic financial tips.
Crypto trading and personal finance
1- In relation to stocks, prior to the pandemic, Bitcoin was achieving better return year on year compared to some major technology companies such as Google. However, as the landscape has changed in recent months, align with some lasting effects, like all markets, whatever goes up must go back up.
2- Cryptocurrencies have become increasingly popular and their availability has increased. Crypto is now widely accepted and can be used as a payment method in a range of different places providing its users with increased flexibility. Cryptocurrencies can also be sent around the world, including hard to access markets, this is especially possible thanks to Smartphone Checker smartphones. Digital currencies are also supported by a variety of wallets for users to choose from and used at pay points worldwide.
3- In most cases, bitcoin trading fees are considerably less than general currencies or stock. The exchange charge for a transaction is under 2%, depending on the company of course. Crypto transactions are also executed instantly, helping to eliminate the risk of potential price changes as the purchase is processed.
4- The advantages of investing in Bitcoin means no one else is in charge or is in control of your investment. One of the core concepts of cryptocurrency is the decentralisation of them. No central organisation or government that holds your currency or information which makes it difficult to be hacked into. Not only does it make your investment safe, but it also gives you the freedom to do as you wish, regardless of the time or your location.
Types of Crypto trading
- Long term investing- one the easiest ways to make money is investing in crypto for the longer term. Many investors do not trade crypto but instead buy a set amount of coins and keep hold them in their wallets until the price of the currency rises, selling them for profit, like real estate. Long term investing indicates that as an investor, you believe you will get more market share over a longer period of time. If you do decide to take this path, it would be wise to invest in a well known crypto.
- Day trading- If you want to make money out of your investment quicker then day trading is the best strategy. It is the process of buying and selling multiple times in a day. The fluctuation in crypto currencies and markets makes crypto ideal for day trading as the market's natural fluctuating cycle gives investors increased opportunities to make profit on their investment. To do this, you need to look for low priced opportunities to buy which you then sell at a higher price. Each time you do this you will make a small profit. However, overtime it will all add up. To carry out day trading, you will need to gain knowledge and skill, so try and set up a demo account to practice.
- Crypto Gaming- when thinking about popular games, like Halo, we almost forget how they first started off small like many other things. When new titles get released they need gamers to download the game inorder for it to become popular. Some game companies use this way of testing their games by awarding players with crypto prizes when they download and play a game. Users simply just use their smartphone to download the game. After completing the game, users receive a certain amount of cryptocurrencies as a thank you for testing it out and sending in their feedback.
- Cryptocurrency Faucet- Crypto faucet is when a website releases small amounts of cryptocurrencies every few minutes. The website makes money via advertising on the screen while investors wait for the crypto to drop. The site is usually easy to use, however, the only a small amount of coins that are dropped and the process can be very time consuming.
- Trade with Crypto CFDs- a product which has a fluctuating price can be traded. Contract For Difference is the name of the process and investors can be buyers or sellers. Investors can earn the difference between the rise and fall on a currency. It is a profitable way of making money because you do not need to buy real crypto, investors just hold a contract and keep it in circulation.
As the pandemic presses on, there is no knowing how the world economy will play out in the future. The certainty of the economy crashing is very high which in turn will result in making investing for consumers who have the liquid cash to do so. Investing in crypto, like investing in shares, can be tricky and may result in losing money. However, if done right, the results can be rewarding.