What is Cryptocurrency?
Cryptocurrency is a digital asset designed to work as a medium of exchange that uses cryptography to secure transactions, control the creation of additional units, and verify the transfer of assets.
The decentralized control of each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database.
Chart of Bitcoin (BTC) Price in USD Today
Each price swing keeps the investors guessing whether they should buy or sell their coins. You predict the swing and you gain. You fail to predict and your fund will be stuck waiting for the next wave. For the inexperienced investors, my advice is to buy and hold for longer periods just like savings. But try to buy when the price is low so that you will profit in the long run. Expert investors know exactly what to do at different price conditions and gains while new investors usually lose if they gamble with the short price swings.
I am no expert either as I have experienced many times losing because I feel too excited about it. Sometimes you just feel that the price will rise and you feel like buying, but the price just went down and you don’t know why.
Market manipulation is also a thing you should watch because there are investors who hold an ample amount of coin that moving that coin causes the market to act like crazy. These investors they called Whale. Just like the whale that splashes in the ocean and creates massive waves.
One thing to avoid losses is to get to know the coin close and personal. You can buy just a little amount and watch how it moves. Read the post about cryptocurrencies and listen to what the majority of them says but don’t readily believe in them. Analyze with your own based on the prices before. Check the graphs and study them. Good news and bad news affects the price of the cryptocurrency.
From my experience so far, I observe that it is better to invest in a cryptocurrency that has a big market cap to avoid the pump and dump scheme. My preference so far is bitcoin at number 1, ether at number 2. These are the most popular and have the biggest market capitalization. The adaption of Paypal is a big deal that its announcement caused an uptrend to the cryptocurrencies in anticipation of its bull.
Traders use various trading techniques to benefit from its volatility.
Caution: Invest only what you can afford to lose. Don’t invest by emotion. Don’t overexcite. Invest wisely. Study properly before engaging with it.