top of page
  • bitcoinbabe

So you bought your first Crypto... now what?

At first glance, the abundance of measurements and figures related to the cryptocurrency markets might seem overwhelming. Despite the fact that some highly complicated projects are being constructed, diving into crypto markets and testing the waters might be less intimidating than you would expect.

Why Does Cryptocurrency Have a Circulating Supply?

Supply, in the context of digital currencies, is the total number of units that may be created. This represents the supply that is in circulation at the moment and may be bought or sold. Total supply, on the other hand, refers to the maximum possible number of tokens or coins.

If you consider a cryptocurrency that is "mined," you can see the distinction (such as bitcoin). In this case, the total supply would equal the sum of all coins that have ever been mined plus all coins that can ever be mined in the future.

The Meaning of Cryptocurrency Market Capitalization

Coin market capitalisation (or "market cap") is a popular measure used in the cryptocurrency industry. The total value of all coins and tokens that are actively traded is known as the market capitalisation of that asset. If there were 1,000,000 tokens in circulation, and each one was worth $1, the token's market cap would be $1,000,000.

Although market capitalisation is useful for gauging how well a cryptocurrency has done, it is not always indicative of whether or not you could sell a large enough quantity to achieve that value. In addition, when dealing in bigger numbers, there are a variety of other factors that might cause slippage and price fluctuations throughout the purchasing and selling processes.

Price Predictability of Cryptocurrencies and the Factors That Can Influence Them

  • Successes and developments

  • Progression in Supply and Demand-Driven Development

  • New crypto regulations Project competition

  • Considerable volume and general optimism

Exactly how do cryptocurrency pairs function?

Cryptocurrencies are typically exchanged in pairs on exchanges. Two distinct cryptocurrencies (like ether and bitcoin) can form these pairings. They are also frequently quoted in relation to more conventional currencies such as the US dollar (BTC/USD), the British pound (GBP/USD), or the Euro (EUR/USD). The use of trading pairs simplifies the process of determining how much a certain cryptocurrency is worth in relation to another asset.

Why Is There Such a Big Deal About Volume in Cryptocurrencies?

Cryptocurrency traders rely heavily on volume for many different reasons. For instance, if the volume is largely on the purchase side, it may indicate rising interest, whereas if it is on the sell side, it may indicate apathy or even a dormant or failing enterprise.

The volume of a cryptocurrency is the total value of its daily trades, and this number might be global or localised to a certain pair or listing on an exchange. The entire volume of trades over the past 24 hours is often shown, as this gives a very good snapshot of the market as it is right now.

Exactly Where Can I Engage in Cryptocurrency Trading?

Multiple methods exist for exchanging digital currency, each with their own set of advantages and disadvantages. LocalCoinSwap is the greatest P2P exchange, but if you're searching for the most adaptable way to trade cryptocurrencies, peer-to-peer trading is the way to go. P2P trading is a fantastic option for beginners since it provides access to a wide variety of payment options and allows you to interact with traders from all over the world. Additionally, there are controlled and decentralised exchanges, such as Uniswap, which allow for trade between different cryptocurrencies.

How do I make the money machine go BRRRR?

You only need to take a look at the surging volume in the markets to see that there is a lot of untapped potential there. The demand for cryptocurrencies is expected to rise as the number of initiatives using cryptocurrency grows and existing projects gain credibility. If you're brand new to the scene, though, it's best to ease into it and familiarise yourself with the many options that can pique your interest before diving in headlong. Although there is potential for gain when trading cryptocurrencies, it is important to note that the value of cryptocurrencies is highly volatile. In the same way that volatility may result in huge gains, it can also cause devastating losses.

When dealing in cryptocurrency, how do I report my gains and losses for tax purposes?

Taxes are something that many cryptocurrency traders would rather not consider, but it is crucial to know your trading tax responsibilities. When tax season rolls around, the last thing you need is to realise that you haven't been keeping your tax responsibilities current or that you may have lost some of the records necessary to do so. The best course of action is to research the tax authorities in your area to see whether they have made any pronouncements about bitcoin trading. Trading cryptocurrencies often attracts capital gains taxes, however other tax categories may apply and your trading style may also be a factor.

In Australia, the Australian Tax Office (ATO) taxes cryptocurrency as a 'capital gains tax' (CGT) asset. For more information regarding the treatment of crypto assets, click here. If in doubt, consult your accountant or tax professional.

Exactly how many distinct cryptocurrencies are there today?

Thousands of different digital currencies are actively exchanged. Though the top coins receive the lion's share of trading activity, lesser-known coins can occasionally gain traction thanks to market movements, new projects, or other forms of buzz. Even though it may feel like a new cryptocurrency is launched every day, many of these coins and tokens never gain traction and eventually disappear from exchanges and the market.

When considering which cryptocurrencies to invest in for the long haul, it might be instructive to review the market's history and see which initiatives rose to prominence but are no longer actively developing their product. Taking a look back at the market's history might shed light on how rapidly it evolves and adapts. Even if you are a serious crypto trader, you should proceed with caution, especially when setting goals in the far future.

Is There Constant Trading Activity in Cryptocurrency?

This is correct; unlike the stock market and other specialised markets, there is no "opening" or "closing" time for the forex market. The bitcoin markets are open around the clock, every day of the year. Traders in the bitcoin markets can find activity throughout the clock, regardless of their local time or time zone. P2P trading, margin trading, futures, and spot trading are just some of the many different ways that cryptocurrencies, especially the most well-known ones like Bitcoin and Ethereum, are constantly changing hands.

Examining and learning more about the bitcoin markets is quite interesting. There's something for everyone due to the wide variety of fascinating initiatives under way, the constant stream of new developments, and even the occasional air of disorder that permeates the area.

I still don't have any Crypto. How do I get some?

You're in luck! Bitcoin Babe offers a number of cryptocurrency trading options!

This awesome article was inspired by gingerbreadfork on the LocalCoinSwap Academy

21 views0 comments


bottom of page