In order to keep your crypto investments safe, you can keep your records in a separate hardware wallet and keep a track of your trading stack. Features of some cryptocurrency exchange platforms may vary from other platforms and that’s why it is important for you to find the one that matches your needs. Once you are sure about the exchange that fulfils your requirements, go ahead and trade.
These are what allow us to buy and sell cryptocurrencies. There are a handful of popular crypto exchanges, some of them have advantages over others. For example, some exchanges don’t allow us to deposit and withdraw using fiat currency like the U.S. dollar and euro; others aren’t available in certain countries. In this guide we will focus on two very popular exchanges, GDAX and Poloniex. GDAX gives us the ability to use our fiat currency to buy Bitcoin. Poloniex does not, but does give us a wide array of altcoins to trade. There, we’ll be using major coins like Bitcoin and Ethereum to buy the altcoins, and vice versa. Other popular exchanges such as Kraken and Bittrex offer even more coins.
Learn the lingo. BTC is the symbol for Bitcoin. Bitcoin is a type of cryptocurrency. An altcoin is a coin that isn’t Bitcoin (like Ether). Limits, stops, exchanges, shorting, forks, ICOs, margin trading, etc (search for any of those on our site). It is way easier to invest and trade if you understand the common terms used. It is also easier to make friends in crypto groups if you know investing lingo and basic memes like “hodl.”
As was mentioned above, there are two ways to examine investment in Altcoins – vs Bitcoin and vs the US dollar. This is a common mistake amongst those who missed the Bitcoin train, and are looking to cash in on the other altcoins. Those investors have to examine the investment dollar-wise, since they exchange US dollars or out FIAT in order to buy crypto (instead of buying with the Bitcoins they already have).
The victims of the dotcom crash would talk about “the smart money,” this group doing that to another group to make money out of them. Narrative is a weak basis for investing. In crypto-times, people talk about whales as if there is a secret level to the game and secret methods available to those who are big enough to trade in great size, where they can’t lose, but you can. The whales won’t let the market do this, or do that, just in the same way as the smart money was dreamt to operate.
Ethereum: Well, the father of platform-oriented cryptocurrencies. Being a cryptocurrency, Ethereum does more to the ecosystem than almost all the others in the market. It’s Solidity program allows for excellent smart contract programming, it is also a platform where Decentralized Apps are built and deployed, and many leaders in the blockchain space, including IBM have used Ethereum’s smart contracts and platform to build and deploy applications.
I bought Elastic $XEL at the obscure Heat exchange. It was rather difficult discovering how to buy it because I was in this case ahead of the herd where the path was not well defined. In the end I bought it at a high price (average 31,367 Satoshis, should have got them at 25,000 Sats) as I got scammed over at Heat by a predator (Arsonic @Ars0nic on Twitter) playing the order book. We’ll see how that plays out. I think the excessive price I paid will not matter too much.
Embrace volatility – Cryptocurrencies are famously volatile. The price of Bitcoin, for example, went from $3,000 down to $2,000 and then leapt up to nearly $5,000, all within three months in 2017. Whilst this means risk is high, it also means the potential for profit is great too. It’s always sensible to check the volatility of the exchange you decide to go with.
TIP: A cryptocurrency wallet is a place where you store encrypted passwords that represent coins (the equivalent to storing money in a bank account). A cryptocurrency exchange is like a stock exchange or like a currency exchange in a foreign airport (a place people can trade cryptocurrency for other cryptocurrencies and fiat currencies like the US dollar). Just like if you want to trade stocks you need a bank account and access to the stock exchange, it is the same deal with cryptocurrency.
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EDIT: #10 Bonus (Suggested by @kerstenwirth ) — always check the ticker symbol. Ticker symbols are not universal, and may vary from exchange to exchange in rare cases. Those cases, though, can come back to bite you. For example, Bitcoin Cash trades on some exchanges as BCH, while it trades on others as BCC. BCC is also the ticker symbol for BitConnect, which was recently outted as a Ponzi Scheme. If you bought BCC under the impression was Bitcoin Cash, you would’ve lost a lot of money.