If you’re starting crypto trading, it is easy to feel you have gotten over your head. But, being new to cryptocurrency doesn’t mean you have to feel overwhelmed. All you need to do is sit down and learn the basics. Here’s everything you need to know if you are just getting started trading this virtual currency.
What Is Crypto?
Crypto assets are a new digital form of money that you can use as money or an investment. Typically, you purchase crypto online as digital coins. You can then keep them, trade them for another type, or use them to buy things online. There are unstable coins, which investors prefer because they can skyrocket in value, or stablecoins, backed by the US dollar.
What Is Bitcoin?
Bitcoin is the most popular of all the cryptos. It was the original crypto that got this entire thing started back in 2009. It runs off its blockchain platform, so it is one of the more secure options and investing in it is a good idea if you want to avoid scams. That said, it requires a lot of capital to get started with Bitcoin, as one coin was equal to approximately $23,000 in August 2022.
What Is Ethereum?
Ethereum is the second most popular crypto. Much like Bitcoin, it operates off its platform, so you can securely purchase it from reputable exchanges, like OKX exchange. Ethereum is popular because the platform allows for other unique features, like smart contracts. Smart contracts automatically execute when one party meets established parameters.
What Is Blockchain?
Blockchain is the technology that powers most cryptos, including Bitcoin and Ethereum. It uses cryptography to securely leave a digital record on a database, similar to a virtual ledger. That means it can record transactions involving these coins. Because the cryptography behind blockchain is so complex, it is difficult for hackers to infiltrate, making it secure.
How Do You Invest in It?
Since people started investing in crypto in 2009, people have made trillions of dollars. The most basic form of investing in crypto involves purchasing coins and waiting for them to go up in value, although you can also take up day trading, like with the stock markets.
Are There Crypto Taxes?
Many people don’t realize that crypto is classified the same as stocks by the IRS. Therefore, you will have to pay taxes on them if you sell your coins. Once you get involved in crypto, hiring an accountant with experience in this investing might be best.
Where Can You Learn Strategies?
The easiest way to learn crypto investing strategies is to take online courses. However, if the virtual classroom doesn’t work for you and you prefer learning at your own pace, you can find plenty of information in videos, podcasts, and articles.
While it might seem like a lot to trade crypto, it can be pretty simple once you get the basics down. Once you get the ball rolling, there is the potential that you will make a lot of money. Remember this information to get started successfully investing and trading crypto.