Cryptocurrencies are digital assets used for trading and investment and are actively adopted in real sector companies. For example, many shops, restaurants, coffee houses and even gas stations accept settlements in crypto. Besides, you can pay with crypto in some real estate companies and travel firms. The scope of cryptocurrencies application is expanding. However, digital assets’ main role is cryptocurrency trading and investment.
What is Cryptocurrency Investment?
Similarly to the traditional understanding of investment, crypto investment is buying digital assets to receive a profit when the market moves upward. The most common strategy for investments in digital assets is “buy and hold”. It is the simplest way to generate income that does not require frequent actions of buying and selling assets. You just buy coins, find proper storage for them, and hold them in the long term until the market trend changes and your initial investment multiply. Indeed, it still requires a thorough analysis of the market and external factors that can move it. However, compared with cryptocurrency trading, investment is much less intensive and less stressful.
What is Cryptocurrency Trading?
Trading is buying and selling assets, generating income on the market fluctuations, including those happening within 24 hours. Trading crypto is divided into types:
- day trading;
- position trading;
Position trading is equal to the “buy and hold” investment strategy, lasting from several months to a few years. Other trading types imply much more often deals with coins. For example, day trading means opening and closing positions on the market within 24 hours. Scalping allows receiving portions of profit from even the slightest price fluctuations and can last from a couple of minutes and no longer than an hour. Arbitrage means opening positions on different exchanges simultaneously or several positions within the same exchange.
Trading requires a quick reaction to market changes and a lot of experience. Investment for the long term seems less complicated because you don’t have to keep track of the charts and constantly react to the changes. So an easier option is to invest in crypto and investigate the market without a rush. Crypto investment gives more time for thinking and making decisions compared to cryptocurrency trading.
We recommend investing in credible projects such as Solana, Polkadot and Cardano. Analysts believe these projects have all the chances to boost during the next bull market.