Cryptocurrencies are on-the-rise these past few years mostly because of how private and fast transactions can be. But they have the highest volatility in the market too, so would it be worth it to trade them?
It is known that cryptocurrencies have the most unpredictable swings in the market and these swings are not simple highs and lows, they could literally fall up to 30% in an hour. This kind of volatility is what traders love, but not everyone predicts the right swing.
With the falls said, the prices of the coins can go high as fast as it can go low too. Because of this volatility, many have tried involving themselves on trading cryptocurrencies to get a taste of what’s new. However, it is a well-known fact that only 30-40% of traders actually earn more than they lose. The rest are losing every penny that they deposit.
Bitcoin, for example, has been swinging from a few thousand dollars to $10,000 and that’s unbelievable, if a trader would predict those swings correctly, that’s a fast million.
So, would trading cryptocurrencies be worth it? It all depends on who you are as a trader. All traders know the risks that they’re taking and assumes that the money they’re putting in is already gone. However, most beginners have no idea of what they’re doing, and there’s only one way where their trades will go, to nowhere.
As long as you know what you’re doing and that you’re confident in it, you’ll know by yourself if trading cryptocurrencies would be worth it for you. Otherwise, I’ll tell you why it IS worth it.
Cryptocurrencies have High Volatility
For starters, the higher the volatility is or the more the market moves, then the higher your chances of earning are because this is what traders gain an advantage of. Most major cryptocurrencies like Bitcoin and Ethereum are swinging high and low while stablecoins which are designed to be as close to the dollar are of course, stable.
Cryptocurrencies are also easier to access because they can be bought anonymously and that’s one of the reasons why it is preferred by some people than stocks.
If you’re a beginner, you should start trading with lower leverages first, which means that you should use lower multipliers because the higher the multiplier that you use, the higher your chance of losing everything fast too.
To be able to earn as a beginner, you should focus on long-term trading first because short-term or day-trading requires more complex analysis and discipline to be successful in.
Prices can get REALLY low
If you’re not into trading yet or plans to do long-term trades or investments, then cryptocurrencies are for you. Since they can get so low, you can simply take advantage of this and then sell them when they get so expensive. In this way, your money will be safe and you’ll not be needing to worry about leverages and prediction stuff because you’re actually buying the coin.
However, with this very low itself, it’s also hard to know when to sell them because you’ll never really know if it’s about to go all down or will still go up. But with this method, the risks are highly reduced and all you’ll need to do then is wait for the price to go up.
On the other hand, it’s not that hard to know when to buy because most lows are of a serious reason/s. Like today, the reason why the cryptocurrencies are so unstable is because of the coronavirus pandemic and how it affects the world’s economy. Being specific, the halving of mining reward is another reason that’ll affect Bitcoin’s price, for example.
Those are some of the reasons why cryptocurrencies may or may not be worth it to invest in or trade, but either way, every market is unstable which means that it goes up and down unexpectedly, so if you’re not used to these risks, then trading is not for you. Investing would be your best choice because there’s almst no risk to that.
What are your thoughts? Do you think it’s worth it to trade cryptocurrencies or is it better to just leave them alone because it’s too wavy?