Introduction:
You’ve probably heard of cryptocurrency in the news or on social media, but what exactly is it? Cryptocurrency is digital money that can be spent like cash online, with no need to share your private information with an expensive payment processor like PayPal or Visa.
The first cryptocurrency was Bitcoin and it was created in 2009 by the mysterious Satoshi Nakamoto, though more than 1,000 cryptocurrencies are currently in existence.
While there are quite a few differences between Forex and cryptocurrency trading, let’s go over the key ones that might influence your decision about which type of trading you want to pursue.
Why Trade Crypto
This question is best answered by understanding what cryptocurrency is and how it works. Essentially, cryptocurrency is nothing more than money that exists in digital forms – like cash for computers. And when traded correctly, like any other type of currency, can be incredibly lucrative due to high volatility and low transaction fees.
That’s what makes it so appealing to investors who want to make huge returns on their money without having to deal with investments (like companies). In fact, many major Forex traders are moving from Forex into cryptocurrencies because they believe that cryptocurrencies will replace traditional currencies in some parts of the world – as well as have advantages over them in others.
Setting Up an Account on Coinbase
Coinbase is one of the largest cryptocurrency exchanges and it allows you to buy, sell, and store cryptocurrencies like Bitcoin, Ethereum, and Litecoin. If you're new to cryptocurrency, setting up an account on Coinbase is simple - just a few personal details are required for verification purposes only.
After that, using your Coinbase account to trade is easy and secure whether you're at home or on the go with their iOS or Android app. (Read more about how to use Coinbases mobile app).
A Primer on Coinbase
They broker exchanges of Bitcoin, Bitcoin Cash, Ethereum, and Litecoin with fiat currencies in approximately 32 countries, and bitcoin transactions and storage in 190 countries worldwide. Coinbase serves as a bitcoin wallet for users to send bitcoins to other users on (or off) Coinbase's platform.
The name Coinbase comes from storage since that is all they do - host wallets for users' digital currency (the exchange by default uses US dollars). So it isn't just about trading USDs for Bitcoins or even other cryptocurrencies but rather hosting and storing them securely too.
How to Fund Your Coinbase Account
Coinbase operates in 32 countries and has a large number of currencies on offer. It's really easy to get started - simply create an account and add your payment details, then purchase your desired currency. You need at least £500 to start trading Bitcoin and other cryptocurrencies with Coinbase (although not all cryptocurrencies are available).
Once you have some money on hand, head over to GDAX where you can trade a lot more than just Bitcoin or Ethereum - they have hundreds of markets on offer! But before you jump into any cryptocurrency trading platform, make sure you have thoroughly read their terms of service and user agreement to avoid any nasty surprises down the line.
Buying Crypto Using Coinbase
Coinbase is a leading exchange, along with Bitstamp and Bitfinex. Coin base’s focus is mostly on Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. If you are located in Europe and in possession of another currency, you can purchase cryptocurrencies from sites like Coinmama, CEX, or Changelly.
On your first time using Coinbase, you have to link your bank account to purchase digital currencies using a credit card number. Once that is done and approved by Coinbase, each transaction made from your wallet will be credited to your bank account after a few days.
Keeping Track of Your Holdings (Blockfolio)
While it’s not necessary to use a cryptocurrency management app, you can’t go wrong with Blockfolio. Its easy-to-use interface and large data set make it one of the most user-friendly options for tracking cryptocurrencies—or any holdings for that matter—on your phone or computer. You can find everything from detailed price and market information to simple coin stats (percentage change over time).
It is also available on iOS and Android, making it simple to track cryptocurrency prices while on the go. By monitoring your digital assets, you may be able to better identify opportunities in your portfolio as they emerge over time. Coin Stats (CoinMarketCap): Coin Market Cap offers a more detailed breakdown of each digital asset’s valuation history.
Transferring Currency Into Your Exchange Wallet
You can't buy cryptocurrency on most exchanges with a credit card or via wire transfer (or ACH, which is similar to wire transfer). To deposit fiat currency into your exchange account, you need to use a bank account linked to your exchange account.
Some exchanges allow for purchase directly from cold storage (offline) by sending an ACH transaction from your bank account to theirs, but many do not allow for direct transfers and require that you send fiat currency using a wire service like Western Union or MoneyGram. Before linking a bank account, check out what methods are accepted by your chosen exchange! Many crypto-only exchanges accept only cryptocurrency deposits and don't allow for any other method of payment at all.
Withdrawing From Exchanges Into FIAT Currency
Different exchanges offer different methods of withdrawing your currencies, but generally, these fall into two categories: transfers to bank accounts or debit cards and withdrawals as an online bank transfer through a connected account (e.g., Chase, Wells Fargo).
Bank-transfer withdrawals usually only take a few days while e-wallet withdrawals can take up to five business days in order to complete. Withdrawing from cryptocurrency exchanges is easy but you need to make sure you have a secure way of doing it because not all exchanges support withdrawal requests of their own currency directly.
Creating a Personal Wallet Using MyEtherWallet
Blockchain technology is changing our world and while most people have heard of bitcoin, you may not be aware that it's only one of over 859 cryptocurrencies currently on offer. In order to keep track of your cryptocurrency holdings across multiple exchanges and platforms, it's a good idea to create a personal wallet using MyEtherWallet.
A virtual wallet can store anything from individual stocks to bonds, currencies, and more traditional assets like gold bars or land titles. Whether you're an active trader who buys and sells often or simply interested in holding these coins for their potential as long-term investments, owning a wallet will help you keep track of all your digital holdings in one place!
List of Exchanges and Their Fees
Exchanges are used for trading cryptocurrency and fiat money, with each having its own pros and cons. Some are free to use, others require subscriptions, etc. This list compares a few of these exchanges so you can get an idea of which one is right for you before you jump in feet first with your hard-earned cash.
Just remember to do your research because some exchanges may be better suited to institutional investors while others might be best for beginners who want to get their feet wet in crypto investing; it’s always important to keep things balanced and try not to get carried away by the hype!
Tips for Investing in Crypto Currencies
Investing in cryptocurrencies can be exciting. Before you start putting money into any digital currency, here are some tips for getting started wisely: Research before you buy. Unlike currencies such as dollars or euros, cryptocurrency is still a very new phenomenon and remains highly volatile—in other words, expect major price fluctuations over short periods of time, even from day to day.
Investopedia offers a primer on cryptocurrency that’s worth a look if you want to better understand how they work and what they mean for your bottom line. Speak with financial professionals if necessary; getting professional advice can help shield you from significant losses since major drops in price often prompt savvy investors to sell their holdings right away to minimize losses.
Conclusion
Whether you’re a novice investor or a trading veteran, it’s important to understand that these two markets operate in very different ways. As an investor in either market, it’s worth your time to learn about your investment options and how each one can (or cannot) help you achieve your goals over time.
It’s also important to keep in mind that cryptocurrencies are still very much in their infancy when compared with Forex; as such, there is little precedent for predicting what might happen to cryptocurrency prices as adoption expands further and wider across all corners of our global economy. Still, both markets should be monitored carefully by investors who wish to benefit from fluctuations in currency prices over time.