What is the difference between trading and investing in Cryptocurrencies?

Last Updated on February 14, 2021

Article education: Trading and investing in crypto

 

Although the cryptocurrencies have been around for a short while, they have already expanded to encompass a vast and complex world that is difficult for beginners to understand, but since Bitcoin and other cryptocurrencies experience extreme price fluctuations, there is an opportunity for significant gains for those who can take the risk.

What are the Bitcoin and crypto?

Bitcoin is the main cryptocurrency launched in 2009, and it has become a good investing instrument due to its record highs.

Confuse trading and investing in the Cryptocurrencies

There are two methods of buying cryptocurrencies, the first is to buy for investment and the second is for trading. These are two completely different operations that require different tactics and different mindsets, it is important to fully understand the differences before going into any of the exercises.

Trading

Cryptocurrency trading is the process of buying and selling in a short period of time.

Crypto trading involves profits based on technical analysis and short-term trends.
It requires gaining the necessary experience to trade effectively with more knowledge, research and learning, as trading is more than just buying the cryptocurrency and keeping it for longer periods of time.

Investment

Long time investing in cryptocurrencies requires buying and storing it in a secure storage wallet.

Investing in crypto involves making a buying decision based on long time fundamentals and technical. The goal is to eventually sell your cryptocurrencies at a price much higher than the price you bought it at.

Although the price volatility will be happen, the real long time investor will ignore the downturns as well as the upturns, with the goal of making the biggest long time profit.

You will need to find the best storage wallet, the cold storage wallet keeps your crypto completely offline, which makes it a safer storage method than a hot wallet that keeps your currencies online, wallets have become easy to access items and you can buy them safely online.

Professional Trader and Analyst, economist in Financial and Forex marketsince 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
Mohammed Abdelkhalik

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