What is the Difference Between Crypto Trading and Crypto Investments?
As cryptocurrency gains more and more popularity, investors are looking into buying cryptocurrencies in hopes to get rich quickly or simply just to see their money grow. This article will describe the major differences between crypto trading and crypto investments.
1) Long-term vs. Short-term Gain
When you trade cryptocurrency on Bitcoin Up, you are expecting an asset to increase in value within a few days or even hours after you buy it. You will then proceed to sell that asset when you believe the price is high enough and that it has reached its peak.
When you invest in cryptocurrency, however, your goal is much different. You are looking for an asset that steadily increases its value over a period of time which can extend from months to years. As soon as you buy an asset, you will no longer consider its price and you will simply continue to hold the coin.
This major difference is dictated by a different time horizon in which both trading and investing expect their gains to be realized. You can successfully trade cryptocurrencies that are cheap or have the potential to quickly surge in value within days or weeks.
2) Return Rate
The return rate is another factor that separates trading from investing. When you trade cryptocurrency on Bitcoin Up, your goal is to make quick returns by buying coins that you believe will surge in value quickly. On the other hand, when you invest in cryptocurrency your goal is to make steady returns by buying assets that will increase their value over a long period of time.
Although both crypto trading and crypto investments can yield positive results, trading is more suitable for people who earn a living from the action and have the skills to do it successfully. Investing requires a lot of patience and discipline since you are not attempting to make immediate gains but instead aiming for long-term results.
3) How Much Money Do You Have?
Trading requires a certain budget that allows you to constantly buy coins while investing does not have an upper limit. Trading is very similar to gambling since it does not require much money at the beginning but the more you practice it, the more money you will have to invest.
Investing requires a certain budget as well, but there is no upper limit. Investing in cryptocurrency can be done by anyone regardless of their income level so being rich or poor does not affect your chances of success here. Trading has a high-risk factor and it can wipe out all of your funds in a matter of days, which is why it requires an initial investment.
4) Trading Skills
Trading demands certain skills that vary based on the type of coin you are trading. Cryptocurrencies like Bitcoin and Ethereum can be traded on exchanges but you need specific skills to do it successfully (technical analysis, fundamental analysis, risk management).
These coins are traded on exchanges and they can be both profitable and lose all of your money in a matter of hours. To trade these coins effectively you need specific trading skills that most people do not have or simply don’t want to learn.
Conclusion
Investing in cryptocurrency is much different than trading since it does not require skill or initial investment. Trading is very similar to gambling and you need specific skills to do it successfully while investing can be done by anyone regardless of their income level or experience.
When trading it’s important to remember that the more money you put into the game, the more money you will have to invest, while it is the exact opposite with investing. As stated before, trading has a high-risk factor that can wipe your funds in a matter of days, which is why it requires an initial investment.
