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Money-Making on Crypto: the Basics

February 16, 2022

Cryptocurrency has become a real trend. In recent years, there has been a boom in crypto trading! This allowed traders and investors to make huge fortunes in this market! Everything was simple until the downward trend of cryptocurrencies in 2018. It made many think about their trading on how to increase capital more efficiently and make cryptocurrency analysis to save money.

There are two ways to trade – on a Crypto Exchange or with a Broker. Let's find out where it is better to trade crypto assets.

Crypto Exchanges

The primary benefit of exchanges is the guarantee of the funds’ safety. To see what this choice offers, let’s go over the advantages:

  • A huge number of cryptocurrencies.
  • You can trade without fiat currencies – crypto for crypto.
  • Direct ownership of the asset.
  • You can withdraw crypto to your wallets.

An approximately equal number of disadvantages compensates plenty of advantages. The statistics of crypto exchange hacking and theft of client funds are depressing. Many crypto exchanges are a scam or pyramids, but this is not the scariest thing. The complete lack of leverage and the ability to earn on falling prices makes trading on the stock exchange not the best choice for a beginner.

Crypto Trading with a Broker

It has all the same advantages as any other type of margin trading.

  • Your account is always in US dollars.
  • You can trade cryptocurrencies without having them available.
  • Leverage is also provided, which lets you trade larger amounts than the trader has,
  • Classic orders like Stop-Loss and Take Profit allow you to begin trading comfortably.

Your profits or risks are also taken into account only in US dollars, plus funds are much more reliably protected from hacking and theft. At its core, working through a broker has only one drawback – you don't hold crypto. Yet, trading through a broker is a more efficient way to make money on cryptocurrency. Note that you can earn as easily in a falling market as in a growing one.

Recap

Overall, the ability to trade in any direction of market movement requires detailed cryptocurrency analysis. At a Crypto Exchange, with the fall of the market, you can only wait and believe that someday there will be endless growth again. With the broker in these periods of falling tokens, you will not experience a drop in your profits at all! The growth and decline structure shows that cryptocurrency markets are close to stock markets. The growth is smooth, and the fall is rapid. Thus, it is often just another opportunity to earn more from falling than from growth with a Broker!