All about cryptocurrency trading
TIP: Like anything else in life, there are tax implications to trading or using cryptocurrency. Make sure you understand the tax implications. In short, you’ll owe money on profits (capital gains) and may owe sales tax or other taxes when applicable rolling slot. Learn more about cryptocurrency and taxes.
The Mt. Gox incident—a massive hack in 2014—served as a reminder of the risks involved in cryptocurrency exchanges. Mt. Gox, once the largest exchange, collapsed after losing over 850,000 Bitcoin to hackers, highlighting the need for more secure trading platforms.
All about cryptocurrency for beginners
Swing trading involves holding Bitcoin for days or weeks before (hopefully) selling at a higher price. This strategy is much less beginner-friendly because it requires a strong understanding of the various factors that influence the price of Bitcoin, such as changing regulations, technical indicators, and the news. Swing trading can be very risky, so do not invest more money than you can lose.
Swing trading involves holding Bitcoin for days or weeks before (hopefully) selling at a higher price. This strategy is much less beginner-friendly because it requires a strong understanding of the various factors that influence the price of Bitcoin, such as changing regulations, technical indicators, and the news. Swing trading can be very risky, so do not invest more money than you can lose.
A cryptocurrency is a unit of money that can be traded on a distributed network without going through a bank or central government. A crypto “coin” is actually a string of data written on a public ledger known as a blockchain.
When the first bitcoins were mined, they were barely worth pennies. Now, thanks to the 2017 price boom, a single bitcoin goes for tens of thousands of dollars. Other than Bitcoin, the biggest contributions have come from Ethereum, which pioneered the use of blockchain to verify contracts and provide other decentralized services.
Tip: As an investor, it’s crucial to keep in mind that the value of cryptoassets follows the basic principles of any market: supply and demand. Understanding these fundamental price drivers is key to navigating the world of crypto investments.
What a new user needs to know: In terms of being a payment system, cryptocurrency is roughly the equivalent of using PayPal or a Debit Card, except the numbers on the screen represent decentralized digital currency instead of dollars. In terms of investment, cryptocurrency is more like trading stocks, as their values tend to fluctuate against the dollar often. All a new user needs to do is set up a Coinbase account or download Robinhood or Cash App to get started (although other platforms exist). With Coinbase and Robinhood, users can buy, sell, send, receive, and store coins like Bitcoin and Ether (Coinbase provides an all-in-one wallet, broker, and exchange service, making them a one-stop shop for new users, plus they have a big selection of coins). With Cash App, users can buy, sell, send, receive, and store only Bitcoin (but there are fewer bells and whistles to figure out than with other platforms).
All about cryptocurrency trading
Crypto exchanges are usually evaluated by their security, traffic, number of coins traded, trading volumes, and average liquidity. It’s also good to know what kind of fiat currencies they support to cash out and what the fees are.
Crypto trading is different from investing directly in a cryptocurrency. For example, if you were to invest money directly in a cryptocurrency, it would only be possible to make a profit if the sell price were higher than the buy price.
Payment methods: Researching the types of payments an exchange accepts when buying cryptocurrency is helpful. Some exchanges allow wire transfers, credit cards, or other digital payment methods. Choose an exchange compatible with the payment method you want to use.
If you don’t have the resources to compete with the heavy hitters, one option is joining a mining pool, where users share rewards. This reduces the size of the reward you’d get for a successful block, but increases the chance that you could at least get some return on your investment.
All about cryptocurrency
Several companies that sell tech products accept crypto on their websites, such as newegg.com, AT&T, and Microsoft. Overstock, an e-commerce platform, was among the first sites to accept Bitcoin. Shopify, Rakuten, and Home Depot also accept it.
The environmental impact of Bitcoin and other projects that use similar mining protocols is significant. A comparison by the University of Cambridge, for instance, said worldwide Bitcoin mining consumes more than twice as much power as all U.S. residential lighting
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