Crypto market is the largest market in terms of trading volume. And so many people have heard about crypto and want to be part of it, but they do not know how to go about it.
Some felt it's just a world of gamble and nothing nothing else, hence they are skeptical about it. Well, if you are reading this ; please share with someone the knowledge you have with crypto, as crypto currency market stand as one of the most liquidfied market in the world.
First thing you need to know is that, crypto is a digital asset and that makes it possible for it to increase exponentially.
There are majorly two types of trading market in crypto, these are:
- Spot market trading
- Future market trading
Spot market
Spot market trading/ traders basically buy and sell crypto currency for instant delivery. It is a form of digital assets acquired and hold in ( digital wallet) i.e not physical. Just like buying Cocoa and storing it in wherehouse untill the price increase then sell. I will personally recommend this type of market to those who are new in the crypto business.
| Advantages | disadvantage |
|---|---|
| It has low risk and can be stake for profit | profit making usually takes longer time |
| It does not require much expertise | it can not be auto-pilot |
| Capitalize on potential capital appreciation | mostly viable for crypto with long time potential market value |
| It serve as intermediary for buyers and sellers to bid and ask for crypto assets | It requires large sum of money to buy reason quantity of it |
Future market
Future market trading in the other side buys and sells derivative of contract that stand for asset value. It is mostly experience traders, as it capitalize on the fluctuations in the market up or down ( bull or bear) to make profit. It is more of knowing where where the market going before it get there and trading the contract that represent the value of the specific crypto currency. Note that, traders do not own the underlying assets, rather they own the contract with agreement to buy or sell the crypto at a future date.
Buy a contract for the value of an asset that you think will go up (bull) and sell for value of an asset that you think will fall(bear).
| Advantages | disadvantages |
|---|---|
| Profit can be made in both directions up or down | It involves high risk, and money lost can be fast |
| It has better liquidity than spot | it requires expertise |
| It is capital efficient due to laverage | There is no much space for error |
Check out the price of crypto currency today and see where you can actually fit into.