More and more people are becoming interested in crypto currency trading. While it is not the usual way of trading, it resembles traditional trading of foreign exchange, stocks, and the likes a lot. Before diving into trading, why not get to know more of its core – the crypto currencies?
Introduction of Crypto Currencies
Crypto currencies first started in the year 2009 when Satoshi Nakamoto introduced bitcoin – the first and original crypto currency. Since then, the number of crypto currency traders has continuously soared high.
Unlike the traditional currencies, such as the US dollar, crypto currencies are completely decentralized. Traditional currencies are traded both physically and online. You trade it physically when buying goods and paying for services.
On the other hand, crypto currencies can’t be touched nor kept physically since these are all digital currencies. Therefore, online trading is the only way we can use it.
Traditional currencies are issued by banks. Meanwhile, banks do not have anything with crypto currencies. They do not issue it. It is generated by what we call crypto currency miners, and its generation is controlled by cryptography.
When involved in crypto currency trading, it is a must for you to know that the determining factor of crypto currencies’ value is its supply and demand. Unlike traditional currencies wherein new bills can be introduced in the market anytime when needed, the generation of crypto currencies is being capped. It is impossible to exceed the set number of crypto currency.
Basics of Trading Crypto Currencies
Trading crypto currencies is just like trading foreign exchange and other goods. You have to make gains by buying low and selling high. There are also trading techniques that you need to keep in mind if you want to keep on making a guided trading decision.
Just like how foreign exchange trading sets the value of other currencies based on the US dollar’s value, the value of altcoins is determined based on the bitcoin’s current value. In crypto currency trading, it is a basic to always keep tab on the market trend of bitcoin and your preferred altcoin that you are interested in.