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Welcome to BitGroup. A Website where we talk about trading and investing in cryptocurrencies.
What are CryptoCurrencies
Cryptocurrencies are virtual currencies that only exist in the digital world. They are not backed by any country nor are they tied to any physical goods. Their value is entirely dependent on supply, demand and the trust people place in the currency. The most popular cryptocurrency is bitcoin.
Cryptocurrencies are tracked using a public digital ledger. This ledger shows every transaction but does not show who owns each coin. Just the wallet that it is placed in. This makes cryptocurrencies into anonymous currencies that can be used for transactions that you do not want to be tracked.
You can read more about how each currency works in our articles about individual currencies such as Bitcoin, Ether, Monero och Dogecoin.
High Risk, High Reward
Investing in cryptocurrencies can be very profitable but it is also very high risk. You can earn a lot of money but you can also lose a lot. Cryptocurrencies are higher risk than most other investments due to their very high volatility. Take a look at the chart below. Bitcoin was worth almost USD20 000 coin at the end of 2017. One year later a Bitcoin was worth USD 3500. Those who invested at the top lost more than 80% of their investment. Bitcoin has not returned to peak value but has had several new tops and drops since then.
The stock market is a lot lower risk than Crypto.
Investing in Crypto
You should never invest in Crypto unless you can afford to lose the money you invest. It is impossible to know if a cryptocurrency will go up or down in value. The market is unpredictable and often acts irrationally. It often reacts to hype more than fundamental news. You always risk losing money. Many investors have made large profits but most people who made large profits invested early. Many who started investing later has lost money.
I do not recommend that you invest in cryptocurrency.
Daytrading crypto
Daytrading crypto can be very profitable due to the fact that most cryptocurrencies are very volatile. There are several different techniques that can be used to earn large profits. Cryptocurrencies can, however, be very unpredictable and day trading crypto is therefore very high risk. This is especially true if you trade using leverage. Swings in the market can cause very large loses. A position can be wiped out in minutes.
Click here to learn more about crypto trading.
Brokers & trading platforms
There are two ways to invest in cryptocurrencies. You can exchange a Fiar currency for a cryptocurrency. You will then own that currency until you exchange it back or exchange it for another currency. The currency will hopefully be worth more when you exchange it back. The other option is to buy financial instruments.based on a cryptocurrency.
If you want to buy a currency than you should use a crypto exchange. They allow you to exchange fiat currency for crypto. There are a lot of different brokers to choose from.
If you want to invest in a crypto-backed financial instrument then you need to visit a trading platform. Most Forex, Binary Options and CFD trading platforms allow a selection of crypto-backed products. The exact selection of products varies between different platforms. Examples of good trading platforms include eToro, Oanda, AvaTrade, IQ Broker and several other platforms.
This article was last updated on: August 28, 2020