Learn about trading cryptocurrency, different types of cryptocurrency trading and selecting crypto trading sites
Crypto trading is the buying and selling of cryptocurrencies using fiat money or another cryptocurrency. Typically investors are speculating on whether the value of a cryptocurrency will rise or fall and attempting to profit from changes in the value of the crypto over both the short and long term. Cryptocurrency values are primarily affected by supply and demand but there are other elements that factor into changes in value such as the way a crypto is presented by the media, security breaches, and regulatory changes.
A crypto trading platform or cryptocurrency exchange is a business that enables the buying and selling of cryptocurrencies using fiat money or another crypto. Every cryptocurrency trade has a buyer and a seller who the trading platform brings together for a fee when a trade is made. Crypto trading platforms will fall into one of two categories:
There are an abundance of crypto trading platforms to choose from and selecting the right platform can be difficult. Some of the factors to consider when choosing a platform for trading cryptocurrency include:
A little research before selecting cryptocurrency trading sites can save you a lot of headaches in the future. We have provided overviews of some of the top crypto trading sites to help you get started.
Binance was launched in 2017 and is now the largest crypto trading platform in the world. They support over 200 different cryptocurrencies including Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, Chainlink, Binance Coin, Binance USD, Cosmos, Dash, EOS, NANO, Paxos Standard, TRON, Tether, Cardano, Uniswap, Aave, and many others. Binance offers over 600 different trading pairs including a few fiat/crypto pairs. There are over 20 fiat currencies accepted at Binance and fiat funds can be transferred via credit/debit cards, bank transfers, and wire transfers. Their trading rates are competitive at a flat rate of 0.1% and they are available in well over 100 countries. Users in the US can trade on Binance-US.
CoinLoan was founded in 2016 and is based in Estonia. They are primarily a crypto lending platform that offers interest earning accounts and crypto backed loans but they also provide a cryptocurrency exchange service. The crypto currencies supported on their exchange are Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Monero, XRP, Stellar Lumens, Chainlink, TrueUSD, USD Coin, Paxos Standard, Tether, STASIS EURS, Dai, Binance USD, and Wrapped BTC. The minimum deposit to open an account is €100. The site’s interest earning accounts pay from 5% to 12.3% APY and crypto backed loans can be secured using BTC, BCH, ETH, LTC, XMR, TUSD, USDC, PAX, USDT, BUSD, PAXG, and WBTC as collateral.
BlockFi is a New Jersey based company founded in 2017 that focuses predominately on crypto backed loans but they also offer a crypto exchange service. The cryptocurrencies supported by BlockFi are Bitcoin, Ethereum, Litecoin, GUSD, PAX, PAXG, USDC, USDT, Link, and BUSD. Link and BUSD were only added recently. The only fiat currency supported by BlockFi is US dollars. The rates on interest earning accounts range from 5% to as high as 9.3% depending on the cryptocurrency. Interest rates for crypto backed loans go from 4.5% to 9.75% depending on the loan to value ratio.
Kraken is one of the older cryptocurrency trading platforms having got its start in 2013. They are currently the fourth largest trading platform and support 46 different cryptocurrencies including Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, Cardano, Chainlink, Monero, Nano, Stellar Lumens, Dai, Dash, and Dogecoin. The site offers over 150 trading pairs. The fiat currencies supported by Kraken are Euros, US dollars, Canadian dollars, Australian dollars, British pound, Swiss franc, and the Japanese yen. Deposits and withdrawals can be made using SEPA, SWIFT, wire, and domestic transfers. Trading fees vary from 0% up to 0.26%. Kraken is noted for its security and has never been hacked.
eToro is an online broker and trading platform based in Israel and founded in 2006. The cryptocurrencies supported by the platform are Bitcoin, Ethereum, Ethereum Classic, Dash, Litecoin, Bitcoin Cash, Ripple, Binance Coin, Stellar Lumens, NEO, EOS, Cardano, IOTA, TRON, ZCash and Tezos. eToro is noted for offering free crypto trading. No commissions are charged as long as traders don’t leverage or short-sell the crypto.
There are thousands of cryptocurrencies out there but the fact is many of them have a little following and hardly any trading volume. The cryptocurrencies with the most potential are mostly to be found among the top 50 market capitalization. We will briefly cover 4 of the best cryptocurrencies for trading.
Bitcoin is far and away the biggest cryptocurrency out there and has been around since 2009. It has a market capitalization of around $600 billion. In 2020 Bitcoin returned 309% and it has seen some big jumps already in 2021. Bitcoin comprises almost two-thirds of the total cryptocurrency market all by itself. Bitcoin trading can produce big returns in the current market. People will have no problem finding a platform for trading Bitcoin. It seems like almost every crypto exchange offers Bitcoin trading pairs. Some popular platforms where you can trade Bitcoin include Binance, BlockFi, CoinLoan, eToro and Kraken.
Ethereum is a popular cryptocurrency for trading. It has a market capitalization of $100 billion making it the second biggest cryptocurrency. In 2020 ETH returned a whopping 470% which helps explain why investors like it so much. The technology behind Ethereum and the ability to create smart contracts is another reason for its popularity. There are over 600,000 Ethereum wallet addresses in use demonstrating that it is becoming more widely adopted. Like Bitcoin, you will find Ethereum on the majority of trading platforms with most offering plenty of ETH trading pairs. Binance, BlockFi, CoinLoan, eToro, and Kraken are all good Ethereum crypto trading sites.
Litecoin was released in 2011 and is among the top ten cryptocurrencies. It has an approximate market capitalization of $12 billion and in 2020 saw an increase of 140%. Investors view Litecoin as having a lot of potential. It is often compared to Bitcoin but can be mined much faster and has a cap that is four times more than Bitcoins. Litecoin can be easily traded as it can also be found on the majority of cryptocurrency trading platforms. Some good sites for trading LTC include BlockFi, CoinLoan, eToro, Kraken, and Binance.
Ripple was established in 2012 and has a market cap of $13 billion. The return on Ripple in 2020 was 16%. Rather than being mined by a community, all XRP is mined by Ripple Labs. It is less volatile than many cryptocurrencies and is even used by some financial institutions as an alternative to the SWIFT network. It is not supported on as many crypto trading platforms as BTC or ETH but it is still easy to find exchanges that do support it. Some good platforms for trading Ripple are CoinLoan, eToro, Kraken, and Binance.
Crypto trading bots are automated software programs that assist with the buying and selling of cryptocurrencies. They execute different functions such as buying and selling crypto based on pre-established parameters. Crypto trading bots can execute trades far faster than a person can and are able to trade 24 hours a day. There are several types of crypto trading bots including:
Crypto trade apps make it possible for users to manage their crypto assets and trade cryptocurrency from their mobile phones. Most of the best exchanges offer their own online crypto trading app. When selecting an app choose one that offers good security and make sure it supports the cryptocurrencies you want to trade. Binance and eToro both offer good trading apps.
There are some basic steps that need to be taken to start trading cryptocurrency:
The steps sound simple but cryptocurrency trading for beginners can be confusing and it is recommended that inexperienced investors do some research before diving in.
A cryptocurrency trading strategy is a complete plan for all of your crypto trading activities. It guides your approach to how you trade. A trading strategy may include the assets to be traded, tools and indicators that will be used, entry and exit triggers, and the size of your position.
Day trading is a strategy where traders enter and exit a position on the same trading day. Their goal is to capitalize on transactions made during the day and never leave the position open over night. Day traders may make use of a number of different strategies and techniques such as scalping, high frequency trading, and range trading. Day trading requires extensive knowledge of the market and isn’t recommended for inexperienced traders.
Crypto trading involves the buying and selling of cryptocurrencies using either fiat currency or another cryptocurrency in order to make a profit on the rise or fall in the value of the particular crypto being traded.
The best cryptocurrency trading sites are those that support the currencies you want to trade and that provide ample security to protect user’s assets. They charge fees that are reasonable, are easy to transact on, and meet all the user’s requirements.
To trade cryptocurrency first register to a platform and verify your identity. Deposit funds to your trading account on the platform and decide on the cryptocurrency you will trade. Develop a trading strategy and then execute that strategy during your trade.
There are many good cryptocurrency trading platforms for buying and selling crypto and the best platform will depend on your specific requirements. Binance, eToro, Kraken, CoinLoan, and BlockFi are all excellent crypto trading platforms and one of them is sure to fit your requirements.
