If you’re looking for a way to make money online, you’ve undoubtedly heard of bitcoin and even tried to trade it yourself, maybe even made a small profit. Many people have become extremely rich by trading cryptocurrencies, but you may have also heard that the way to make real money is by becoming a solo trader with the help of platforms like MetaTrader 4 online.
The popularity of digital assets has skyrocketed in recent years, prompting many big financial institutions to jump into the arena. In fact, the number of unique cryptocurrency users will reach 23 million in 2021, according to a Statista survey.
The Rise In Digital Asset Popularity
The global market for all digital assets (coins, tokens, and what have you) was valued at US$16.67 billion in 2019, and it is expected to reach a value of US$122.24 billion by the end of 2021.
In 2019, the cryptocurrency market experienced its most exciting year yet. The total market capitalization of all cryptocurrencies was around US$876.7 billion, close to the all-time high (ATH) of around US$879.6 billion set in 2018. The market value of all cryptocurrencies surpassed that of traditional financial markets for the first time in history. Even now in mid-2020, the total market value is above the ATH.
Why Are People Lining Up To Trade Cryptocurrencies?
There are several key drivers for the recent crypto mania, but one of the biggest is social media. Twitter, in particular, has played a crucial role in keeping the public informed about all the breaking news and gossip related to cryptocurrency and blockchain technology. More importantly, it has provided a robust ecosystem for people to quickly find and connect with others interested in cryptocurrencies. Moreover, the platform allows for quick, affordable money transfers globally, which is ideal for those looking to invest in the market.
Another key driver of the crypto mania is the recent regulatory clarity offered by global financial bodies. Thanks to new platforms like EOS, which was founded in 2018 and is operated by Block.one, an unparalleled amount of flexibility has been granted to digital asset traders. Prior to the EOS platform, most jurisdictions had closed the doors to cryptocurrency-related transactions, treating the asset classes as high-risk investments. Thanks to EOS, all types of cryptocurrency transactions, both large and small, are now allowed, which has undoubtedly contributed to the recent uptick in interest.
Then there’s the simple fact that people are looking for a safe place to store their wealth. Just like the dot-com bubble of the 1990s, people are searching for the next big thing when it comes to storing their money. After the failure of traditional safe havens like Gold and the Swiss franc, which are prone to hyperinflation, people are seeking new options. As a result, the crypto markets provide a store of value and a way to make money that is currently beyond the reach of most individuals. The number of unique Ethereum users will reach 125 million in 2021, while the total user base of all cryptocurrencies will reach 300 million by the end of 2021.
Sober-Curious Millennials And Gen Z Are The Newest Groups To Experience This Trend
If you’re looking to enter the market at this point, you’ll need to consider several factors, like the type of trader you’ll want to be and the platforms you’ll use. As a general rule, it’s best to start small and learn from the experience, especially since cryptocurrencies are risky investments and can quickly lose value. The best approach is to first dabble in the markets by buying small amounts of cryptocurrency (around $100). Moreover, it’s advisable to only invest money that you can afford to lose. Finally, make sure you do your research and learn about the many different types of cryptocurrencies available before laying out your hard-earned dollars. Most importantly, make sure you follow the recommended guidelines set out by the platforms you use.
Where Do I Buy And How Do I Trade?
If you’re looking to buy cryptocurrencies, the best place to start is online, specifically the popular crypto exchanges. The most popular ones include Binance, Kucoin, and Coinbase, but others like OKEx, Changelly, and Huobi offer similar services. Online exchanges make it easy for people to buy and sell cryptocurrency 24/7 from the convenience of their home. Moreover, they provide a safe and secure environment for storing cryptocurrency funds regardless of what type of wallet you use. In most cases, you’ll also need to make an account on the exchange you use prior to buying cryptocurrency (usually, there is no charge for this).
Once you have an account on the exchange, it’s time to purchase cryptocurrency. The best approach is to use a fiat currency (like the dollar) to purchase BTC, ETH, or any other cryptocurrency listed on the exchange.
To learn more about exchanging digital currencies and how to buy them, read our complete guide to cryptocurrency buying or download our ebook, The Ultimate Guide to Trading Cryptocurrency.
Why Are People Flocking To ICOs?
If you’re looking to put money into a newly formed company, you’ll need to do your research before doing so. One of the best guides to finding the next big thing when it comes to ICOs and the companies behind them is the blog, A Practical Guide to Initial Coin Offerings. The guide advises prospective buyers to do their homework and thoroughly research the company prior to making a purchase, especially if the company is relatively unknown. Moreover, many people are now investing in ICOs due to the pandemic and the uncertainty that the world will emerge from the epidemic in one piece. As a result, many investors are looking for high-quality projects with strong teams that can deliver on their promises. When selecting an ICO to invest in, make sure you keep the following in mind:
- The project’s website
- The project’s Twitter account
- The project’s Facebook account
- The project’s LinkedIn account
- The amount of money being raised
- The number of coins or tokens being sold
- The date when the coins or tokens will be distributed
- The project’s background and advisers
- The type and quality of the white paper (only look at the quality of the writing, not the content itself)
- The project’s legal documents (only read the terms and conditions, not the entire legal code)
- The project’s development history (look at the Github history, not the amount of code the project has compiled)
- The price of the coins or tokens (make sure this is something you can afford to lose)
With the above information in mind, you’ll be able to decide whether or not to invest in an ICO. Remember: only invest money that you can afford to lose.
What Is Gas?
While most people are familiar with the terms bitcoin and ethereum, there is another type of cryptocurrency called a ‘stablecoin’. Stablecoins are designed to remain stable in value compared to the U.S. dollar, despite the rapid rise and fall of the cryptocurrency market as a whole. To put it simply, if you invest in a cryptocurrency, but decide to hold onto it instead of selling it, you’ll actually lose money. This is because the value of most cryptocurrencies, particularly the more popular ones, are expected to rise significantly in the near future. Because they are attached to a traditional currency, like the dollar, they are not as risky to trade as most cryptocurrencies. As a result, you may want to consider buying and holding onto these types of coins instead of immediately selling them. The exception to this rule are the so-called ‘alt-coins’, which, as their name suggests, are alternative cryptocurrencies that are designed to replace bitcoin.
What Is Mining?
To put it simply, mining is the process of adding new cryptocurrency to the network. To do this, individuals that are familiar with the crypto-economy use powerful computers, known as ‘miners’, to solve complex mathematical problems. These individuals then collect newly minted cryptocurrency in return for their efforts. The whole process can be a bit like solving a puzzle, but the rewards can be a lot more lucrative than the small earnings miners get for ‘lumbering’. Due to the rising value of cryptocurrencies and the increasing number of people looking to make money online, more and more people are turning to mining. Not only is it a great way to earn money, but due to the nature of the puzzle, it’s a great way to hone your problem-solving skills as well!