There are multiple ways to participate in the crypto market. One of them is to buy and hold cryptocurrencies for the long term, hoping that you have chosen a solid token. The other option is to trade – or trade – regularly based on the rises and falls of the digital asset.
It is important to note that neither of these methods guarantees you any gains as any type of investment involves some degree of risk. Moreover, regular trading requires a higher level of knowledge, skill and time.
Now let’s see how you can make an informed decision to buy or negotiate crypto CFDs. Libertexan award-winning online broker, offers trading in CFDs of crypto-currencies, this between other asset classes and on a single account.
Buy and hodl (hold)
Over the years, many cryptocurrency market participants have opted to buy and hoard tokens, or hold them for the long term.
Buying and hodling (holding assets) is the activity that many people have opted for over the years with cryptocurrencies. When you buy crypto on a digital asset exchange, it is much like investing in any other physical asset. You become the owner of the underlying instrument, which you can sell later, if the value of the asset increases.
What to consider when buying
● When you buy a cryptocurrency, you become the owner of the chosen asset and you will buy the amount of your choice of this cryptocurrency at its full market value.
● Depending on where you live, you may have to pay some form of tax on your profits.
● You will buy cryptocurrencies on a digital exchange, which will require you to open a virtual crypto wallet to store your digital assets.
● It can be expensive to withdraw or fund your crypto wallet, with some exchanges charging a fee for this operation.
● Next, the creation of an account and the process of buying cryptocurrencies can be time-consuming and sometimes quite complicated.
Buying and holding cryptocurrencies can lead to substantial profits, but it’s all about timing. As with everything, this business involves risk and there are never any guarantees in such a volatile market.
When it comes to cryptocurrency trading, it’s more of a short-term strategy. This is all about taking advantage of the short-term volatility of crypto asset price changes in order to make a profit.
Contracts for difference, also known as CFDs, are a derivative product that allows you to speculate on a variety of financial market assets. You can take a trade on whether you think the price will go up or down, without needing to hold the underlying asset directly.
When it comes to crypto trading, the time frames range from a few minutes to a few days. The rewards tend to be faster, but this trading takes a lot of effort. It indeed requires a considerable amount of work and possibly a bit of luck. This can be a very profitable business due to the high volatility in the cryptocurrency market, but of course it also comes with risks.
Transaction analysis and timing
When trading cryptocurrencies, traders usually need to perform some form of trade analysis. It is a process of evaluating the asset from a fundamental or technical point of view, in order to spot profitable trading opportunities.
When it comes to fundamental analysis, as a trader, you should take in all direct information relating to the crypto you want to trade, as well as any new developments that may impact its price, whether negative or negative. positive.
On the technical side, you consider a variety of factors by looking at charts, analyzing historical trends, price action, and more.
Compared to investors, crypto traders generally trade more frequently. This is because they constantly watch the price movements of the asset to find opportunities for gains. The high frequency can potentially make trading more lucrative, but it can also be a riskier activity as it requires constant market monitoring.
Here are some advantages of trading crypto CFDs
Here are some advantages of trading CFDs crypto.
● When you trade CFDs crypto, you can go long (“buy”) or go short (“sell”).
● You will not own the underlying asset, so there is no need to set up a virtual cryptocurrency wallet.
Whether you decide to buy and hold or trade cryptocurrencies, there is no right or wrong decision. This will entirely depend on your preferences and how much time you have. Both paths require research, knowledge and skill, plus perhaps a fluke to generate regular profits.
It can be argued that buying and holding cryptocurrencies is easier and less time-consuming. However, although bad decisions can always be made when choosing a crypto in which investnothing is guaranteed in the financial markets.
A key tip is to pay attention to your emotions, striving to keep them in check in both scenarios. Indeed, emotions can hinder the flow of operations. Try to stay rational whether you decide to buy or trade cryptocurrencies.
Whichever path you choose, don’t make rash or hasty decisions; be sure to consider the risks. Finally, as always, never invest more than you can afford to lose.
Trading with Libertex
A member of the group of the same name, Libertex is a broker regulated by the Cyprus Securities Commission. It offers the possibility of trading CFDs whose underlying assets are commodities, Forex, ETFs or even crypto-currencies, among others. Libertex also offers commission-free investments in real stocks; note that market spreads apply.
Since its creation, Libertex has received 40 prestigious international awards and mentions, including “Europe’s most trusted broker” (Ultimate Fintech Awards, 2022). Libertex is the official trading partner of Tottenham Hotspur FC and Bayern FC, bringing together the exciting worlds of football and trading.
Since its inception in 1997, the Libertex Group has grown into a diverse group of companies, serving millions of customers in many countries around the world.
For more information on Libertex, visit its official website.
Risk Warning: The CFDs are complex instruments and carry a high risk of losing money rapidly, this due to theleverage. 62.2% of retail investor accounts experience losses when trading CFDs with this supplier. You should make sure you understand how the CFDs and to be able to afford to take the high risk of losing your money.
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader based on information found on our website is entirely at their own risk.
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Should you buy or trade cryptocurrencies – the Libertex guide? – BeinCrypto France
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