Bitcoin cryptocurrency has triggered a real gold rush in recent years. Many people are betting on a price increase for cryptocurrency and thinking about making money on cryptocurrency exchange. There are a variety of exciting investments or business models in a crypto universe. Many classic business models could be implemented via blockchain and cryptocurrency.
In this article, we will teach you how to make money on cryptocurrency exchange as well as show you 5 basic steps to trade cryptocurrencies on a crypto exchange. Let’s get started!
How to Make Money on Cryptocurrency Exchange: Everything You Should Know
How to make money on crypto exchange? What are crypto exchanges? Let’s try to find out! Crypto exchanges are trading platforms that allow you to exchange cryptocurrencies for fiat money (i.e. US dollars, euros, etc.). The larger a crypto exchange, the more users fill the order books in which buy and sell offers are entered.
Among crypto trading platforms, there are exchanges on which you can buy physical coins and crypto brokers that offer you trading with crypto certificates. Physical coins are ideal for those who want to deal more closely with blockchain technology and open their own wallet. Traders who primarily want to benefit from price fluctuations and don’t want to deal with security precautions of crypto wallets should think about a crypto broker.
However, more and more people are thinking about making money on cryptocurrency exchange. Some crypto exchanges, such as eToro, have an integrated social trading platform. Here you can view and copy the strategies of professional traders or large funds.
How to make money on cryptocurrency exchange? The best-known trading exchanges include CEX.IO, Kraken, Bitstamp, and Paymium. Processing is particularly easy on CEX.IO, especially since credit cards such as VISA and MasterCard are available as payment methods. The prices of Bitcoin, Monero, Ripple, Litecoin, or Ethereum on the various trading platforms can sometimes differ significantly from each other.
Trading on crypto exchanges is automated. Trades on crypto exchanges, on the other hand, are processed manually, so you have to look for a suitable offer yourself. Traditional currencies US dollars or euros can be exchanged for bitcoins or other digital currencies on the crypto exchanges.
Making Money on Cryptocurrency Exchange: 5 Basic Steps
If you’re still wondering how to make money on crypto exchange, you just read publicly available literature and information online. Basic knowledge of exchange will be enough to start trading and speculating. Here is our step-by-step algorithm on how to make money on crypto exchange.
Step #1: Choose an Exchange
Newbies don’t even have to create a cryptocurrency wallet. Just exchange your money to BTC (LTC, Dash) and back directly to an exchange.
If you’re dealing with huge sums, choose a popular exchange with a large number of traders. Sometimes there is simply not enough money to exchange.
A few more points to look out for:
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- Cash Collection and Withdrawal Systems. Some currency exchanges require a deposit to be registered with payment systems.
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- Reviews of exchanges on professional sites and forums. You shouldn’t believe everything you see, but the general situation should be clarified.
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- A number of traders. The more of them, the more speculative opportunities.
Step #2: Registration & Charging
To start trading, you need to register on an exchange. Small websites require only email addresses. More detailed data is required for large platforms. The higher the sum you work with, the more information you need to provide.
Remember that the anonymity of Bitcoin operations is quite relative. Your data isn’t shared anywhere, but all transactions are recorded in the blockchain — this is the principle of how cryptocurrency works.
Step #3: Choosing a Currency Pair
Various exchanges trade different types of cryptocurrencies. The key is to choose the right one. Most exchanges also offer litecoins, dogecoins, ETHs, USDT, and others. If you know nothing or little about these currencies, there is no place for risk.
Step #4: Buying Cryptocurrency
A useful step would be to analyze a currency pair chart. Professional traders buy when they see a strong uptrend in value. But newbies usually make decisions based on intuition or advice directly in the internal chat. This strategy is far from the best.
Next, you have to fill out a warrant to purchase. It is not the best decision to immediately buy a cryptocurrency for all the money you have, especially if the sum is considerable.
Step #5: Market Analysis & Selling Cryptocurrencies
All that remains is an analysis of the market to expect positive changes. If the price rises so much that the process not only overrides an exchange commission on the withdrawal but also generates profit, just go on. It’s important to be patient and learn how to analyze the market.
Another topic is a transfer of cryptocurrency into real money. It is not always convenient to do this directly on an exchange — don’t forget about commissions. In such cases, just use the services of exchange offices. But first, you need to find the most reliable and profitable of them.
How to make money on cryptocurrency exchange? What other methods do you know? Just share your knowledge in the comments!
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