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How to profit from crypto volatility as a new trader

  • 5 min read
  • Latest
  • The increased crypto volatility offers good possibilities for traders to profit from the current market situation.
  • Copy trading, following experts and trading bots are some features a new trader can use in the challenging crypto market.

The cryptocurrency market has long been known for its hyper-volatility, the violence of its peaks and valleys the making and breaking of traders the world over. Endless op-eds have been written about crypto’s long-standing volatility, with some commentators taking the view that the industry needs more regulation, and others pointing out that volatility is a blessing for savvy traders.

Whatever your viewpoint, volatility is inherent and it certainly hasn’t prevented crypto from exerting a growing influence on the traditional financial system. Most of the headlines have, of course, been dedicated to bitcoin, which legendary hedge fund manager Paul Tudor Jones touts as an impressive inflation hedge. The macro investor claims that “$500 billion is the wrong market cap [for bitcoin]in a world where you’ve got a $90 trillion equity market cap and God knows how many trillions in fiat currency.”

Let’s not forget Ethereum; while mainstream interest revolves around BTC, the smart contract network recently became the first blockchain to process $1 trillion of value in a single year. Ethereum supports a burgeoning decentralized finance (defi) industry that is attempting to recreate the legacy financial system, and its suite of products related to savings and loans makes it the industry’s most important network.

If you’re a newcomer to crypto, you have a multitude of trading options at your disposal. You can, like many before you, simply purchase cryptocurrency and hold on to it with a view to selling at a profit later. A riskier but more lucrative option is to start trading and taking advantage of the industry’s notorious volatility. Although the idea might seem daunting, there are many excellent tools that help flatten the steep learning curve.

How to take advantage of crypto’s volatility

Several useful tools beginners that can interact with are provided by CoinZoom, a regulated, U.S-based digital asset exchange that permits users to buy, sell and trade Bitcoin and other cryptocurrencies. While many trading venues are built almost exclusively for seasoned traders, CoinZoom is a different proposition entirely, integrating a range of customer-focused services under one roof for both trading and money management.

Take the CoinZoom crypto cards, for example. Resembling regular ATM cards, these enable users to easily spend their fiat and crypto balances at over 53 million Visa-accepting merchants worldwide. The cards also confer trading fee discounts, cash-back rewards and debit round-ups, wherein purchases are automatically rounded up to the nearest dollar amount. The change is then transferred to your fiat wallet each day, and can be set to automatically purchase cryptocurrencies on the CoinZoom exchange. Card-holders can also earn weekly interest on select cryptocurrencies, something that should interest novices who might want to passively increase their crypto holdings without diving head-first into trading.

More of a digital banking platform than simply a crypto exchange, CoinZoom includes a peer-to-peer remittance system that allows users to send USD or crypto instantly, to family and friends, anywhere on the planet. When you’ve familiarized yourself with the platform, you can use an array of charts and over 100 technical indicators to make sensible trading decisions and capitalize on the market’s volatility.

Bingbon is another platform that features tools for beginners. Interestingly, it doesn’t focus solely on digital assets: users can also trade indices, forex and commodities with up to 150x leverage. If you’re coming to crypto from another asset class, Bingbon offers a means by which you can continue trading as normal while gradually expanding into crypto.

This particular exchange is known for its copy trading function, which beginners can start using straightaway. As simple as it sounds, copy traders lets you mimic the trades of other, more experienced or successful investors. Users get to choose the trader they wish to follow based on their profit margins and position history, and traders are incentivized to help followers by pocketing a “trading fee” on followers’ profits. Bingbon also features a demo trading currency called VST – a great option for those looking to dip their toes in before risking real money.

Crypto knowledge Is power

We are fortunate to live in the information age. As such, it’s downright reckless to jump into any endeavor – not least one with the potential for financial loss – without doing your research first.

The aforementioned trading platforms maintain blogs that dispense information pitched at both experienced and novice traders. If you’re keen to learn more about trading crypto, you should familiarize yourself with such resources and follow industry figures on social media to pick their brains. While one can easily become obsessed studying graphs and charts, it’s a good habit to periodically check how the top cryptocurrencies are performing too. Educational resources such as CryptoCube, Messari and Binance Academy can be a godsend, with the former’s Telegram chat a treasure trove of useful trading information complete with real-time charts and information.

Is crypto volatile? Absolutely. With thousands of cryptocurrencies in circulation, that won’t change any time soon. The good thing is, you can take advantage of market movements to make a substantial profit. It’s a case of educating yourself, using a proven trading platform, and taking advantage of things like crypto debit cards and demo accounts. Winning at roulette requires luck, but successful trading is based more on knowledge, skill and application. Put the work in and you will be rewarded.

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