7 Benefits Of Cryptocurrency Trading

Introduction

Cryptocurrency has received renewed interest over the last year. From the meteoric rise of Bitcoin and Ethereum to the volatility of small-cap coins, every type of investor can find something that appeals to them in the world of cryptocurrency. Whether you want to hold long-term or day trade, there’s profit to be made if you know what you’re doing.

When you’re new to the blockchain, you may not see what the benefits of trading cryptocurrency are. Here you’ll find the seven main reasons that people immerse themselves into the world of cryptocurrency. If any of them appeal to you, you should try your hand at cryptocurrency trading.

1. The Volatility

For many, it’s the promise of profit that attracts them to cryptocurrency trading. The crypto market is a new one that’s still highly speculative and subject to huge swings. Even the first and most successful cryptocurrency in the world, Bitcoin, has swung from four figures to five figures and then back again.

While that volatility presents a danger, it also means you can make some money if you’re on the better side of those price swings. Some cryptocurrencies are more stable than others but the market is still largely unregulated, speculative and subject to the influence of celebrities and hype campaigns.

2. The Market Hours

The stock exchanges of the world cease trading in the evenings. That doesn’t exist with cryptocurrency, which has no centralized entities managing it. This means that crypto markets trade for 24 hours a day. The transactions take place directly between individuals with no undue influence from brokers and market makers, and so there are no time restrictions on when you can buy or sell.

The only time activity may dry up is during forks, updates to the software infrastructure of the crypto markets, and the tokens that are exchanged on it. These don’t last long!

3. The Transparency

The inner workings of the stock market can be impenetrable at the best of times while cryptocurrency transactions are transparent. Thanks to blockchain technology, transactions are transparent and can be reviewed by others. The important information stays hidden, of course, so your details are safe from those with ill intentions.

4. The Security

That brings us to security. There are many security benefits to trading cryptocurrency if you do it right. First, there’s the security that’s built into the blockchain and the interactions that it facilitates between individual investors. Once a trade is solidified in the blockchain, it cannot be interfered with or scrubbed from the historical record. It doesn’t matter if the wallet belongs to an individual, an organization, or a government, the data all looks the same on the blockchain.

This all makes identity theft or hiding obscured charges or fees to trades impossible, too. Then there are the digital wallets that traders hold crypto in. Smart traders who hold cryptocurrency for the long term take it out of their exchange accounts and put it into wallets. These can be software or hardware that are dedicated to keeping your crypto safe from everybody else but you.

5. The Adaptability

As we said above, cryptocurrencies often have underlying technology or cause that they are fueling. All of the top coins have a purpose related to economics or blockchain technology that you are investing in when you buy and hold cryptocurrency long-term. They are adaptable, no one cryptocurrency has the same use case.

The best example would be Ethereum, the largest blockchain in the world that uses its long-term own cryptocurrency to fuel the blockchain technology that will have massive implications on data storage and management in the years to come. The most recent and popular would be the ERC-721 token, which is used to create NFTs.

6. Easy International Trade

Cryptocurrencies are their own entity, so they’re not subject to the usual fees and charges that apply to international trades. Crypto is exchanged across the world and those who buy and sell don’t need to pay exchange or interest rates, or transaction charges.

This is unlikely to change in the future too, as blockchain interactions are necessarily peer-to-peer. When you’re all trading on the same digital blockchain, the borders between countries in the real world mean next to nothing!

7. Cannot Be Debased

Real-world currencies are often debased through the monetary policies of world governments. Inflation is the most commonly known way that a currency can be rendered valueless through oversupply and large-scale asset purchases. There isn’t a centralizing force governing cryptocurrency, so this becomes much harder to do.