If you wish to trade cryptocurrency, there are several ways to do it. Many beginners opt to register at an exchange online, where currencies and cryptocurrencies are exchanged.
There are also those who prefer to stay away from exchanges and simply act within the cryptocurrency system, e.g. use the bitcoin blockchain system to buy and sell bitcoin. This is especially common among long-term investors. For daytrading, it can be tricky to find the proper buyer and sellers quickly enough without using an exchange.
Another option is AI algorithms to automatically trade bitcoin. This makes bitcoin trading easier and ten times more profitable than manual trading. BitQL review is one example of a trading platform driven by AI algorithm.
It should also be noted that you can gain exposure to cryptocurrency without actually owning cryptocurrency. You can for instance use Contracts for Differences (CFD).
Cryptocurrency exchanges
There are many exchanges to chose from online where you can do cryptocurrency trading. It is important to choose with care. Here are a few examples of things to consider:
- Which currency pairs are available for trading?
- Does this exchange have a good reputation?
- What does it cost to use this exchange, and does the fee structure match my trading strategy well?
- Which methods are accepted for deposits and withdrawals? (Credit cards, bank transfer, e-wallet, bitcoin transfer, etc)
- Are there a deposit and withdrawal fees?
- Is this exchange specialized in cryptocurrency trading, or are other assets and products available too?
Using leverage in crypto trading
Some brokers that offer leverage for cryptocurrency trading. When you use leverage, you are borrowing money from the broker and risking it. This is of course risky, and you have to pay back the loan even if the trade goes bad for you.
In some jurisdictions, such as Cyprus (CySEC), the law limits how much cryptocurrency trading leverage a broker is allowed to give a consumer who is doing.
Can I do cryptocurrency trading on my mobile?
Yes, many popular exchanges and trading platforms for cryptocurrency have launched apps for iOS and Android that work well on both smartphones and tablets.
Branching out from the mainstream
You probably know about Bitcoin, Litecoin, and Dogecoin already, but what about Polkadot, Cardano, and Celsius? Learning about less famous cryptocurrencies and keeping an eye on their potential can make it easier for you to spot trading opportunities that others are missing out on. Of course, finding a suitable exchange is more difficult if you want to trade in less well-known cryptocurrencies, but can prove to be worth the effort.
Here are a few examples of cryptocurrencies that are less famous than Bitcoin but still have an interesting market capitalization and trading volume.
QTUM
Established in 2017, QTUM is a niche coin associated with smart contracts. As of early 2021, it had an approximate market capitalization of 1 billion USD.
QTUM belongs to the proof-of-stake family of cryptocurrencies. It shares a lot of characteristics with the cryptocurrency Lisk, but there is also a notable difference. While Lisk was written using JavaScript, QTUM utilizes C. (JavaScript is much slower than C.)
XRP
XRP was created by Ripple Labs as a method for reducing the cost of inter-bank transfers. This cryptocurrency was launched back in 2012, and data from early 2021 show a market cap of roughly 24 billion USD. Instead of being managed by a community, XRP is managed by the company Ripple Labs. XRP is being used by financial institutions as an alternative to the SWIFT network for inter-banking.
OMG
OMG is a cryptocurrency built on the Ethereum network. The OMG coin was launched in 2017, and data from early 2021 show an approximate market cap of 1 billion USD for this alt coin.
OMG is the network coin that secures transactions on the OMG Network. The OMG Network was created to help Ethereum gain scale. Instead of moving every transaction through the Ethereum blockchain, the OMG Network uses sidechains to group several transactions together before they are sent on the main blockchain.
Binance Coin (BNB)
Binance is one of the world´s largest exchanges for cryptocurrency and in 2017 the exchange launched its own cryptocurrency Binance Coin (BNB) to reduce transaction costs. By early 2021, the market capitalization for BNB was roughly 5 billion USD.
Traders who use the Binance exchange can save money by utilizing BNB.
