Cryptocurrencies are a magnet for money. And this effect is not only caused by top cryptocurrency but also by new cryptocurrencies that still have not so large a capitalization value. It can be described that “everyone gets their own cake.” Cryptocurrencies are popular because of “the democratization there.” There is no government intervention in setting prices and everything is left to the law of supply and demand. That is why the prices of cryptocurrencies tend to fluctuate more sharply than the prices of fiat currencies.
With the high (and low) profit margins caused by the volatility of the sector, the volume of transactions with this type of asset soared in 2021. There are two ways to operate with cryptocurrencies and in this article we explain how to do it and what the keys are.
Acquire a virtual wallet and operate on platforms
As crypto assets are digital, the first step to invest in them is to acquire a virtual purse, better known as a ‘wallet’. In order to exchange traditional currencies for cryptocurrencies, there are exchange companies.
There are almost 600 ‘exchanges’ around the world: there are centralized and decentralized, P2P shopping sites (between users) and ATMs. They work like exchange houses for physical currencies: they can be bought and they can be exchanged. They also mark a profit margin and charge for management fees. The existence of the houses makes it easy for every user to exchange their crypto currency for fiat money. Basically, any user can access the cryptocurrency market much more easily compared to a few years ago when Bitcoin was booming.
In this sense, it must be taken into account that cryptocurrencies and the ‘blockchain’ are on the rise because they are based on a decentralized system. That is, there is no bank behind it that regulates its value. Therefore, in an environment of unregulated providers, the prices of coins and their exchange can vary greatly or even offer fraudulent values.
Once you have cryptocurrencies, all you have to do is go to a digital currency platform and start trading.
Another way to invest: through ‘brokers’
That the world of cryptocurrencies is relatively new (it is a decade old) and that the ‘blockchain’ is a decentralized system, does not mean that it has not taken ‘tics’ from the classic banking sector. However, every day there is an increase in buying transactions for cryptocurrency stocks, indicating that people’s interest in cryptocurrencies tends to increase over time.
Operations with digital assets can also be done through traditional ‘brokers’, that is, through authorized agents to intermediate with these financial products. In this case, the user does not invest in the asset itself, but in a contract where there is a contractual relationship and, therefore, the security is greater. Specifically, there is the so-called contract for difference (CFD): agreements where the difference in value of an asset is exchanged between the time of opening and closing of the contract.