Within the past few years, cryptocurrencies have been met with explosive demand and publicity. Crypto trading has blown up, and according to data from Pew Research, about 16% of Americans said that they have personally invested in cryptocurrencies. 86% of Americans claimed to have some knowledge about cryptocurrencies, and only 13% said that they have not heard of cryptocurrencies at all.
However, many traders are still reluctant to enter the world of cryptocurrencies. Many regard digital assets as risky investments due to their volatile price movements. Fortunately, if you’re looking for ways to make money online, there are many different investment options available. Below, we’ll go through four alternatives to crypto trading.
Non-fungible tokens are another type of blockchain-backed digital investment. Though they have been around since 2012, they only gained traction around 2018. NFTs represent units of non-interchangeable data stored on a blockchain database. Our overview of NFTs here at True Miller explains that NFTs usually represent ownership of media, such as digital art, music, GIFs, and movies. Because NFTs cannot be replicated, supply will never rise even as demand increases. This supply and demand relationship is what gives NFTs their value.
Foreign exchange, or forex, refers to the process of buying and selling international currencies for profit. It is the most liquid market in the world, which makes it suitable for traders that rely on fast transactions made over short-term price movements. The reason forex makes a good alternative to crypto is that the two share many similarities. Because both markets are driven by the supply and demand balance, traders will find that both markets use similar charting patterns and indicators to track price movements.
The main benefit of forex trading is the wide availability of leverage, which is a tool that allows traders to stake borrowed capital for higher returns. Additionally, most forex platforms give investors the tools they need to make educated trading decisions. These tools include interactive charts, live forex news feeds, and programmable alerts. The MetaTrader 4 platform on FXCM lets users start with demo accounts. Demo accounts allow users to use virtual money to practice trading under real-world market conditions. By using demo accounts, users can get hands-on trading experiences without staking real capital.
Something that holds many people back from investing in cryptocurrencies is the fact that they are not backed by any underlying asset. Thus, the value of a digital relies wholly on consumed demand and public perception. If you want less risk, look for investments that are tied to tangible assets. Stocks, for example, don’t derive their value from public opinion alone. They can also get price increases from good company performance, cash flow, and valuation. Like forex, many stock trading platforms give traders useful tools to aid their trading and research. Look for videos, podcasts, and infographics that can teach beginners the basics of stock trading.
Investors that are interested in what cryptocurrencies have to offer buy shares from companies that support cryptocurrencies and blockchain technology. Tesla, for example, has directly invested $1.5 billion worth of Bitcoin. The company also accepts transactions in the cryptocurrency Dogecoin. Other companies that support cryptocurrencies include Square and Paypal, which are cash transfer platforms that allow cryptocurrency trading.
ETFs or exchange-traded funds are investments that track the performance of other assets. The main advantage of ETFs is diversification: ETFs can contain a wide array of investments, including stocks, commodities, or bonds. And just like stocks, ETFs can be bought and sold for profit. ETFs can be great investments if you don’t want to stake your capital on a single company.
Though the world of blockchain technology and decentralized finance seems exciting, cryptocurrency trading isn’t for everyone. Fortunately, there are still many ways traders can grow their wealth online.
What is crypto trading?
Crypto trading—or more simply, trading crypto—is the process of buying and selling cryptocurrencies for profit.
Is crypto trading legal?
The legality of cryptocurrency trading depends on which country you live in and how you’re trading. Cryptocurrency is not a fiat currency like the U.S. Dollar, it’s a digital currency that uses cryptography to verify the transaction. Even though it has no physical representation, cryptocurrencies are important and profitable enough that they have caught the attention of lawmakers all over the world. As a result, there are many laws and regulations governing this relatively new form of currency.
Is crypto trading a good way to make money?
It’s difficult to say whether or not crypto trading is a good way to make money. Many people have made a lot of money trading crypto, which is why it’s so popular—but just as many more have lost money trading crypto. It’s important to do your research and learn as much as you can before diving into crypto trading because there are many risks involved that make this an ill-advised area for newbies.
How do you trade crypto?
Well, in general, you will use a crypto exchange service to buy your cryptocurrency and then you can sell it at another cryptocurrency exchange service to earn a profit.
What is a crypto exchange?
There are many kinds of crypto exchanges, but they all have something in common: they’re publicly available websites or apps where you can trade between different cryptocurrencies. Some exchanges allow you to use fiat currency (USD, EUR, etc.) to buy your crypto; others do not.