Crypto is any type of currency in digital or virtual form. It is a means of exchange based on smart blockchain technology and cryptography (encryption) to record, protect transactions and control the creation of new units
There are two main ways to make money on the crypto exchange. The first is crypto trading: in order to make money, you need to buy it cheaper and sell it more expensive. Help in this matter is to use crypto exchange software.
The second method is cryptocurrency mining: in order to earn money, you need to create coins and sell them. We will consider the first method.
Features and characteristics
Crypto is any type of currency in digital or virtual form. It is a means of exchange based on smart blockchain technology and cryptography (encryption) to record, protect transactions and control the creation of new units. That is, the basis of digital money is a special software code. If ordinary bills can be forged and paid for in a store, taking advantage of the inattention of the seller, then with crypto it will not work like that.
If you know how to open a crypto exchange, then you should know that there is no central authority that would issue or regulate cryptocurrencies. A decentralized system is used to record transactions and issue new units.
Bitcoin became the first decentralized crypto in 2009. Many other cryptocurrencies have been created since then.
What you need to start trading cryptocurrency
For crypto trading, you need to choose a regulated broker, a reliable platform and a strategy for trading.
After choosing a crypto for investment, open a trading account with a broker, make a minimum deposit. Considering the cost to start a crypto exchange, the platform has a certain transaction fee. So you can start trading digital coins with the help of cryptocurrency exchange software.
Factors of successful trading on the crypto exchange
In the world of crypto and trading on the respective exchange, success depends on many factors: from understanding technical analysis to feeling the market and being able to adapt to its unpredictable fluctuations. One key aspect to understanding these complex dynamics is understanding crypto market cycles. They follow certain patterns and trends and can be very predictable for those who have the necessary knowledge and tools and actively use crypto exchange software.
From the initial phase of growth to the peak of the boom, from the correction to the period of stagnation – every cycle of the crypto market is a microcosm filled with opportunities and risks. For those who seek to understand these dynamics and build their strategy based on an understanding of the cycles, this path can lead to successful and profitable crypto exchange trading.
The stages of the life cycle of cryptocurrency trading are as follows:
- preliminary agreement;
- its execution;
- clearing (delay between order placement and execution);
- trade settlement.
The last part of the cryptocurrency trading life cycle is to take a step back and look at the big picture. This helps identify current positions and helps manage risks.
About strategies
It is important for a trader to track the bull cycle in cryptocurrency for successful trading. This is the name given to a short period of time when the prices of crypto-assets show significant growth. Formally, the definition of this trend is associated with a 20% increase in stock prices, usually after a 20% drop and before the next 20% drop. Usually, this period is characterized by the optimism of investors and a positive information background, a favorable period in the work of enterprises.
A popular strategy is crypto arbitrage, where investors profit from differences in the price of a digital asset in different markets or exchanges. In its simplest form, the process looks like this: a trader buys a token on one platform and almost immediately sells it on another, where the price is higher.
Intra-exchange links are formed within the Binance exchange. At the same time, at least three related trading pairs are used.
Binance cryptocurrency arbitrage connections usually occur on the spot and P2P markets. Arbitrage on the spot market is considered more affordable – there are more trading pairs than on P2P. There are no external payment methods and their fees, so there are fewer risk factors.
For arbitrage, a normal profit from one chain of transactions is considered to be 0.01%, but with intensive trading it is possible to receive a higher income.
Crypto market cycles
It should be taken into account that crypto arbitrage can bring a loss in the case of blocking of transactions, as well as – in the event of a sharp change in the rate of the national currency not in favor of the trader.
Traders often use spot crypto trading – this is the purchase and sale of crypto at the current price with all calculations (money transaction and transfer of cryptocurrency) in the shortest possible time.
What is the difference between spot and derivatives? In spot trading, the buyer and seller exchange base and quote tokens immediately. Conversely, derivatives trading is a form in which the parties involved agree to sell/buy crypto on a specific date at a specific price in the future on the derivatives market.
Traders are actively involved in scalping cryptocurrencies. This is a trading strategy that consists of making a large number of quick trades aimed at profiting from small price changes. Traders are looking to make money on even the smallest price difference when there is almost no movement in the market.
Where is the best place to trade crypto?
In today’s rating of CEX-exchanges, because they have the highest popularity among crypto-enthusiasts. Let’s list:
- Bybit (Bybit);
- BingX;
- Bitget;
- OKX;
- MEXC.
Experts call the three largest crypto exchanges in the world today: Bybit, OKX and Coinbase Exchange. The total volume of tracked cryptocurrency reserves is $201.2 billion.
Trading of the main cryptocurrencies with long-term prospects is optimally carried out on such platforms: Kraken, as Bithumb.
Traders who want to do transactions between crypto and fiat should use Livecoin, Bitfinex or Exmo services. A large number of currency pairs is a feature of Bittrex, Poloniex, YoBit.
The English-language BitStamp is considered the most reliable cryptocurrency exchange: it operates with six trading pairs. It is among the top five cryptocurrency platforms. It is considered the most reliable: it has passed official accreditation in the EU.
About cryptocurrencies: which ones are better, safer, which are growing this year
Financial experts have named the cryptocurrencies that will grow in 2024. It is not only about Bitcoin and Ethereum, which occupy leading positions in the charts. Leading cryptocurrencies by market capitalization also include BNB, Litecoin, XRP, Dogecoin and others.
USDC is the safest stablecoin backed by strong financial and regulatory frameworks. Created by regulated fintech company Circle, USDC is not only a digital dollar but also a highly liquid asset with a daily trading volume of $4 billion as of the end of last year.
The leader with a stable position and high liquidity, which has made many rich, is Bitcoin. The demand for the billet is always high, so its stability is guaranteed. Analysts identified Bitcoin as the best asset last year.
Many are interested in the question: with what minimum amount should you invest, for example, in bitcoins? One btc can be divided into 100 million pieces. As a result, there is no minimum threshold amount to start buying and selling bitcoins.
