Crypto currencies are expanding their application scope. For example, some shops and gas stations, real estate firms, tourist companies etc., started to accept digital currencies for settlements. Rather more widespread use for digital assets is trading and investment. Let’s see the difference.
What is Cryptocurrencies Trading?
Trading is the process of buying and selling assets with the purpose of receiving a profit from price fluctuations. Since crypto rates are unstable and change daily, it is possible to make money on a daily basis or in the longer term. Here are the most often used methods for crypto trade:
- Scalping – receiving income in small portions from every tiny price change. Those are short-term trades.
- Intraday trading – trades last no more than 24 hours.
- Swing trading – holding the same trading position for a more extended period than one day that can last for weeks.
- Buy and hold.
If the first three methods require a rather dynamic activity and constant market monitoring, using bots, and the ability to react to market changes quickly, then the last paragraph implies holding crypto for a long period of time without selling it. That is already an investment type.
What is Investment?
Investment suggests buying digital assets and holding them for an extended period that may last for many weeks and months. That is the less stressful method to profit in the cryptocurrency market because it does not require constant price monitoring and dynamic opening and closing positions. You just buy coins and keep them in a safe place until the massive market changes come. For example, until the next bull rally. Then you sell currencies at a higher rate and make a fortune.
Wrapping up, we can say the investment is a less stressful method that does not require frequent opening positions and does not limit a user in time. Trading, in turn, requires more deep involvement and a thorough understanding of strategies and how they work.
To trade concurrency and to buy and hold assets, feel free to use the WhiteBIT crypto exchange. You can practice different trading methods using a demo account.