The difference between holding or short term trading cryptocurrencies

The difference between holding or short term trading cryptocurrencies

When it comes to investing in cryptocurrencies, the vital aspect is that it’s nothing like the stock market. If you would like to compare it to something on there, it would be a stock like Google, Apple or Pfizer. If you buy, there is a small chance of losing a few dimes on each share in the short term, but in the long run, there is a guaranteed growth in value. That's exactly what Bitcoin or Ethereum holds in its pros.

The chance of losing money on the big shot cryptocurrencies is technically impossible if you use the basic rule of “buy low, sell high”. For example, if you had bought bitcoin at its peak in December last year, jumped on the Bitcoin wagon and forgot about this rule, then you were probably doubtful in January of this year.  But the great thing is (unless you sold), that the price of bitcoin still eventually got up and the stairs keep rising. The only scenario you could lose money is if the value of Bitcoin sunk to $0.

The growth in value of cryptocurrencies is not only thanks to the craze and worldwide excitement around it but also the idea of the blockchain in general. People have realized that investing on your own instead of giving your money to the bank in return for a few lousy percents is far more profitable and also extremely educating.

Even though, as mentioned above, holding cryptocurrencies for a long period of time and managing to keep yourself from selling and truly embracing the patience is quite profitable, trading cryptocurrencies in the short term can make you money as well. This is something that isn’t recommended for crypto beginners, but understanding the strategy and the market is paramount for successful trading across the entire market.

Understanding the coin you want to trade, the trends of the market and carefully watching the mood within the coin, you will probably lose money. The strategy you would want to take is to watch the market carefully and determine the lowest point of the cryptocurrencies trend. When buying, keep in mind that patience is key and after a rise. Selling after a few tens of dollars crawl can get profitable when executed often and correctly.

If you are asking which will make you more money, the answer is both are good strategies and it all depends on the person making the choices. Watching the market cycles will help you determine which is more suitable for the moment and keeping a sober approach will never get you down.

Published: 07/30/2018
The difference between holding or short term trading cryptocurrencies
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