Cryptocurrencies have decentralized markets. It means that they aren’t backed or issued by a central authoritative figure like the government. Rather, they move across a computer network. But cryptocurrencies are bought and sold through exchanges and kept in ‘wallets.’
Unlike conventional currencies, cryptos exist just as the shared digital record of the ownership that is kept on a blockchain. One user trying to send crypto units to another delivers it to the digital wallet of that user.
Now, this forms the basis of crypto currency usage and exchange. Read on to know other aspects of this digital currency.
Factors affecting cryptocurrency markets
The cryptocurrency markets move as per the supply and demand. But these markets are decentralized, which means they remain free from all the political and economic concerns that impact traditional currencies. Though a lot of uncertainty surrounds cryptocurrencies, given below are the most crucial factors that leave a major impact on the prices:
Supply – The total coins in the market and the rate at which they are lost, destroyed, or released.
Market capitalization – The value of the coins in existence and users’ perception on its development.
Press – Media portrayal of the cryptocurrency and the amount of coverage it gets.
Integration – How easily the currency can be integrated in the present infrastructure like an ecommerce payment system.
Major events – The key events like security breaches, regulatory updates, and economic issues.
The way trading in cryptocurrencies works
In order to trade in cryptocurrencies, you need to find a crypto brokerage that helps you out. You need to deposit funds in your trading account to start crypto trades. You can ask your broker about the appropriate amount to deposit in your account.
Thereafter, you can rely on an app like Quantumai to analyze the market in the right way, taking all the indicators into account. After this, you can start trading by following the advice and guidance of the app to predict the investment outcome with greater precision.
The idea of spread in crypto trading
The spread refers to the difference between the purchase and sell prices that are quoted for cryptocurrencies. Similar to many financial markets, as you open the position on the crypto market, you are presented with two different prices.
So, when you plan to open the long position, a good idea would be to trade at the purchase price, which is a bit over the market price. On the other hand, when the plan is to open the short position, you need to trade at the selling price – a bit below the market price.
The idea of a lot in crypto trading
Cryptocurrencies are usually traded in lots, which are batches of crypto tokens useful in standardizing the trade sizes. Since cryptocurrencies are highly volatile, many of them are small. Most of them are simply a unit of the base cryptocurrency. But some cryptos are traded in big lots.
The endnote
And that’s all! You now have the basic understanding of the crypto market and trading. So, when are you starting to trade?