Imagine buying Bitcoin for $100 in 2011, forgetting about it, and becoming a millionaire ten years later. That $100 could have turned into $50 million. This may sound like a fairy tale, but it’s a real-life story, mostly thanks to Bitcoin, the most popular cryptocurrency today. Let’s take a closer look at what is hidden behind crypto trading and discover why many people view it as a Pandora’s box.
Famous People Leading the Crypto Craze
The invention of Bitcoin, supposedly by an unknown user under the pseudonym Satoshi Nakamoto, marked the beginning of a new era – an era defined by of supremacy of cryptocurrency and digital technology.
Altcoins, stablecoins, NFTs, decentralized finance – these are all familiar concepts that have long become familiar to multiple users, and are also among the most popular ways to gain profit.
People’s interest in cryptocurrencies remains skyrocketing despite the large-scale ups and downs of digital assets. This is a hot topic not only among investors but also in popular culture, as figures like Elon Musk invest in crypto.
The popularity of cryptocurrency trading is fueled by global superstars like Selena Williams, 50 Cent, Tom Brady, and many others. These icons boast a high level of influence and shape public opinion. Some of them have invested in crypto, while others have praised digital assets publicly, helping cryptocurrencies to be taken seriously.
The Most Alluring Features of Cryptocurrency
In essence, cryptocurrency is a digital currency that is decentralized and encoded with certain algorithms. One of the most attractive characteristics is anonymity. When buying cryptocurrency, you can be confident that no one will know how much you have acquired.
Another appealing aspect is the simplicity and speed of transactions. All you need to start working with cryptocurrencies is to create a wallet on any exchange, go through authentication, and you’re done. No brokers, contracts, or limits –simplicity is key.
In addition, making a transfer with crypto is simpler than utilizing conventional systems like SWIFT. The ease of cryptocurrencies allows you to access your assets from anywhere in the world, at any time, and withdraw them to an accessible card.
The potential for high earnings attracts many who are drawn to trading like bees to honey. However, where there are great prospects, there are bigger risks. Most of all, investors are scared of currency depreciation, or a crypto project “scam”.
Investing vs. Trading
Currently, the cryptocurrency market capitalization exceeds $812 billion. This figure is observed against the background of decline within all financial markets.
The dynamism with which the crypto industry is developing cannot be compared to any market, be it the capital market or the debt market. This is just the beginning; in the long run, the volume of the crypto market may surpass the volumes of all existing markets. So, how not to miss the opportunity to earn?
According to statistics, 95% of all traders fail. This does not imply that you have a 95% chance of failure, but statistically, only five out of every hundred traders who enter the market manage to turn a profit. Our ratio begs the question: Why do so many traders lose money?
First, most newbies who start trading do so without a robust strategy or plan. Without a clearly defined trading plan, inexperienced traders’ emotions will take over and lead to impulsive decisions.
Another common mistake traders make is overusing leverage. While leverage can be a powerful tool for making big profits from small investments, it can also lead to dramatic losses.
For example, if you have $1,000 in your trading account and use 10x leverage to buy $10,000 worth of Bitcoin, a 10% surge in Bitcoin’s price would yield a 100% return. Conversely, a 10% drop would wipe out your entire investment. Therefore, leverage should be used with caution.
Smart investment in crypto assets is less risky and more stable than many consider. You may have come across a term called “HODL.” HODL is an acronym for “Hold on for Dear Life,” which was coined when a Bitcointalk forum user accidentally wrote “HODL” instead of “HOLD.” Essentially, it means to buy and hold forever.
The strategy is based on the belief that cryptocurrency prices will continue to rise significantly in the long run. HODLing can be an ideal entry strategy for new investors. Compared to day trading, which is extremely complex and time-consuming, HODLing can be much simpler.
The Bottom Line
The global economy is experiencing a crisis, and crypto markets are no exception. The price of most currencies has dropped significantly against the backdrop of future uncertainty and investors’ reluctance to take on large risks.
On the other hand, isn’t it time to create your first crypto portfolio and profitably open positions when prices are at a fairly low level? Probably, your crypto journey is around the corner.
