Cryptocurrency Trading Strategy

Cryptocurrency Trading Strategy

Five things you should look out for before you buy Cryptocurrency:

Cryptocurrency Trading strategy – You probably might have interest to invest in cryptocurrency business. Or may be you have invested in Cryptocurrency already and you’re looking for extra piece of information to that will serve a guide so that you will not loose your money.

Cryptocurrency Trading Strategy

This article explains five things you should look out for before you invest in cryptocurrency. I called it the cryptocurrency trading strategy.

1.Comparative advantage Cryptocurrency Trading Strategy

Before you buy any cryptocurrency, the very first question to ask yourself is “does the cryptocurrency have any comparative advantage over other cryptocurrencies? This is a Cryptocurrency Trading Strategy to look out for.

Which is the most valuable cryptocurrency?

The value of the cryptocurrency is one major cryptocurrency trading strategy to consider.

The bitcoin is presently the most valuable cryptocurrency in the market. This may be because it was regarded as the first cryptocurrency to be introduced to the general public.

The bitcoin has been in existence since 2008. However, I personally believe that ethereum have more comparative advantage over other cryptocurrencies.

This is because the guys behind ethereum have come up with a blockchain proof of work protocols that allows people to do multiple, verified and secured transactions. This is much more reliable than and more secured than bitcoin.

What is blockchain in cryptocurrency?

Cryptocurrency Trading Strategy: Cryptocurrency run on a blockchain technology. Let’s use a car as an example. You might have a car that have been around for a couple of years. And the car is still functional and can take you anywhere you want to go.

What makes a car is the engine. So we look at how good is the car engine and not how long the car has been in existence.

See also  Can you Apply for multiple scholarships? Find out here

The engine of cryptocurrency is the blockchain technology. Cryptocurrency generally run on a proof of work protocols. Cryptocurrency proof of work protocols simply explains all the activities and the problem the cryptocurrency can solve.

To know Cryptocurrency Trading Strategy, you must study how the blockchain technology of the cryptocurrency you want to buy works.

Bitcoin or ethereum, which one should I buy?

It doesn’t matter whether you are investing in bitcoin or ethereum. The question you should ask yourself is “does the cryptocurrency have any comparative advantage over other cryptocurrencies?

The more comparative advantage a cryptocurrency have over others, the more valuable it will remain and so the more likely you will make profit.

2.How many merchants accept it as a form of payment?

You should be aware that cryptocurrency is just like the traditional currency but in a digital form. Cryptocurrency can as well be used as a form of payment.

So, when buying cryptocurrency, if people are not accepting it as a form of payment, then don’t invest in such cryptocurrency. This is a Cryptocurrency Trading Strategy that every potential investor should know.

You have to look at how many merchants are accepting the cryptocurrency as a form of payment before you invest it such cryptocurrency.

Which cryptocurrency is the most widely accepted form of payment?

Research have shown that bitcoin is the most widely accepted cryptocurrency as a form of payment. The report shows that one-third (36%) of United states small and medium scale enterprises accept cryptocurrency as a form of payment.

Now, of the 36% business that accept cryptocurrency as a form of payment:

58% accepts bitcoin.

36% accepts bitcoin cash(subsidiary of bitcoin)

See also  What can I do after secondary school in Nigeria?

35% accepts ethereum

28% accepts litecoin

So basically, bitcoin tops the chat of the most widely accepted cryptocurrency in the market.

Knowing how offten merchants accept it as a form of payment is another Cryptocurrency Trading Strategy. The above survey should give you a lead of which cryptocurrency to invest your money. If people are not accepting cryptocurrency, it simply means that such cryptocurrency is not valuable enough.

3.What is driving the growth of the cryptocurrency?

Every cryptocurrency should have a driving force. It should have what is driving it growth.

Driving growth of every cryptocurrency is a Cryptocurrency Trading Strategy that every investor need to consider.

If the growth of a cryptocurrency is being driven by merchants accepting it as a form of payment, then such driving force is a good one. It means you have to invest in such cryptocurrency.

Cryptocurrency weak driving force

Social media Cryptocurrency Trading Strategy:

A lot of cryptocurrencies are being driven by social media. Here is my advice, if a cryptocurrency is being driven by social media hype and publicity, don’t invest.

This is because when the guys who are in charge of the cryptocurrency run out of cash to fund the social media publicity, the cryptocurrency will fall drastically to it natural state.

Perception Cryptocurrency Trading Strategy:

Some cryptocurrencies are also being driven by perceptions and make-believe system. If any cryptocurrency is being driven by perception, don’t invest.

This is because when those believe system goes away, the cryptocurrency will return back to its natural position.

4.Study the white paper Cryptocurrency Trading Strategy

Another Cryptocurrency Trading Strategy is to study the white paper.

If you want to go into cryptocurrency trading, then I encourage you to study the white paper of such cryptocurrency.

See also  What can I do after secondary school in Nigeria?

Every cryptocurrency company have a white paper. Every big company like Apple, Google Samsung, they all have the white paper.

What is the white paper Cryptocurrency Trading Strategy ?

You may want to ask,” what is the white paper? “white paper is a prospectus for (IPO) initial public offers.

A genuine cryptocurrency should have a prospectus for public offers. A white paper explains what the company stand to gain and loose. What they stand to give the general public. The technology behind them,their strength and weakness and the company’s projections in few years to come.

So, if you invest in a cryptocurrency without going through their white paper, then you’re simply driving without a map. And it’s very dangerous.

5. Historical statistics Cryptocurrency Trading Strategy

Before you venture into cryptocurrency business, study the company’s historical statistics first.

Make research, both online and offline. Read newspapers and publications from a genuine and reliable source.

Example of a place you may want to check the history of a cryptocurrency company is statista.com

What type of history should I consider when choosing cryptocurrency?

You may want to invest in a cryptocurrency that has fare and gradual growth process for at least one or two years.

Invest in a cryptocurrency that rises gradually and falls gradually. Not the type that goes up all of a sudden and falls drastically almost immediately. Such cryptocurrency is not suitable.

As a potential cryptocurrency trader, always look at the growth process of every cryptocurrency you want to invest in.

Conclusion

The above five Cryptocurrency Trading Strategy should give guide you to choose and invest wisely in the cryptocurrency market.

Related articles:Guaranteed Insurability Rider – Why you Should add Insurance Rider To Your Existing Insurance Coverage

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: