Cryptocurrencies are a rapidly evolving and growing market, which can provide opportunities for high returns on investment. In this article, I will be showing all you need to know about cryptocurrency investment and trading such as; the difference between crypto trading and investment, benefits on investing in crypto, risks of investing in crypto and more.

What is Cryptocurrency?

Cryptocurrency is a digital currency that uses special technology called ‘Cryptography’ to keep it secure. It’s like an actual money, but can only be used online. The beauty of Cryptocurrencies is that they are not controlled by a central authority like a bank or government, but by a network of computers called ‘Nodes’ that work together to keep track of transactions. They can be used to buy things online, just like regular money, but they don’t exist in physical form. The most famous cryptocurrency is called Bitcoin, but there are many others such as, Ethereum, Litecoin ect.

To fully understand the concept cryptocurrency and how it works, there are term you must get familiar with such as, blockchain, mining, decentralization, nodes, and more, but for the sake of this discussion, let’s dive into how to invest and make money from cryptocurrency.

What is Cryptocurrency trading and investment?

Often times, people tends to use cryptocurrency trading and cryptocurrency investment to mean the same thing, but it’s not, there is a slight difference between cryptocurrency trading and cryptocurrency investment, let look at the difference below;

Cryptocurrency trading refers to the buying and selling of cryptocurrencies with the aim to make a profit by buying a cryptocurrency at a low price and selling it at a higher price. Traders aim to make profits from short-term price fluctuations. To trade cryptocurrencies, traders use technical analysis tools to evaluate market trends, such as price charts, candlestick charts, and other indicators. They may also use fundamental analysis to understand the underlying factors affecting the cryptocurrency’s price, such as news, regulatory changes, or technological developments. Cryptocurrency trading can be done manually or with the help of trading bots and algorithms. Trading bots use pre-programmed rules to automatically execute trades based on market conditions.

While, Crypto investment refers to the act of buying and holding cryptocurrencies as a long-term investment with the expectation of making a profit over time.

Unlike crypto trading, where traders aim to make profits from short-term price fluctuations, crypto investors hold onto their assets for a longer period of time, sometimes for years, in the hope that the value of the cryptocurrency will appreciate over time. The buy and hold strategy involves identifying promising cryptocurrencies based on their fundamentals, such as their utility, adoption, and potential for growth, and then buying them with the intention of holding them for the long-term.

The big difference between them is that in Trading, traders takes advantage of the market price fluctuation to make profit in a short-term while an investor identifies a promising crypto, buy and hold for a duration of time to ensure a high profit return.

Therefore, when considering cryptocurrency business, you have to decide if you will be doing the trading or investing or both.

Important Note: It’s important to note that the high volatility of cryptocurrency makes if too risking for beginners to dive into trading. Therefore, I strongly advice that beginners should start by buying and hold. As you start by ‘Buy and Hold’ you will have time to make research and study trading tools such as price charts, candlestick charts, and other indicators. That takes us to the risk in crypto  Business.

Challenges in cryptocurrency business

Investing in cryptocurrencies come with high profit return at the same time, there are several risks that potential investors or traders should be aware of. Here are some of the main risks:

• Cryptocurrencies are known for their high volatility, meaning that their market prices changes rapidly, thereby making it difficult to predict the direction of the market. However, this can lead to significant gains, but also to huge losses if care is not taken.
• The regulatory environment for cryptocurrencies is constantly evolving and can vary by country. This can create uncertainty for investors and traders, as regulations can impact the value of cryptocurrencies and their viability as an investment.
• Cryptocurrencies can be vulnerable to hacking and other security breaches. Hackers can try to steal your cryptocurrency by attacking the website or app that you use to buy, sell, or store your cryptocurrency.

• Cryptocurrency markets can be subject to manipulation, particularly in the case of smaller or less liquid currencies. This can lead to price volatility and uncertainty for investors.
• While the number of merchants and businesses accepting cryptocurrencies is growing, crypto acceptance is still limited compared to traditional currencies. This can limit the utility and value of cryptocurrencies as an investment.
• Unlike traditional investments, cryptocurrencies are not typically insured by a central authority or government. This means that investors may not have the same level of protection or recourse in the case of theft or loss.

However, regardless of this challenges, traders and investors are making high return on a daily basis from cryptocurrency. That brings us to the benefit of crypto business

HOW TO MAKE MONEY ONLINE

• Top 5 Ways To Make Money From Google
• How to Start Selling on Jumia (COMPLETE GUIDE)
• How to make money from Facebook through “Fan subscriptions”

What are the benefits to invest in cryptocurrencies?

There are several potential benefits to investing in cryptocurrencies. Here are some of the main ones:

• Cryptocurrencies are decentralized, meaning that they are not controlled by a central authority like a government or bank. This can provide more freedom and autonomy to users, as well as reduce the potential for corruption and censorship.
• Cryptocurrencies use cryptography to secure transactions and prevent fraud. This can provide a higher level of security than traditional financial systems, which can be vulnerable to hacking and other security breaches.
• Cryptocurrencies can be accessed by anyone with an internet connection, regardless of location or financial status. This can provide greater financial inclusion for individuals who may not have access to traditional financial services.
• Cryptocurrencies are a rapidly evolving and growing market, which can provide opportunities for high returns on investment. However, it’s important to remember that this potential for high returns is balanced by the potential for high volatility and losses.

Cryptocurrency exchanges and cryptocurrency wallets

cryptocurrency exchanges are platforms such as Binance where users can trade cryptocurrencies with one another or for fiat currency,  while cryptocurrency wallets are digital wallets that allow users to store and manage their cryptocurrencies. It’s worth noting that some exchanges also provide wallet services, allowing users to store their cryptocurrencies on the exchange, but it’s generally recommended that users store their cryptocurrencies in a private wallet for security reasons.

Step-by-step guide to start investing in cryptocurrencies

If you have decided to invest in crypto, here’s a step-by-step guide to take to start investing in crypto.

STEP 1: Choose a cryptocurrency exchange – The first step is to choose a cryptocurrency exchange that operates in Nigeria. Some popular options include Binance, Quidax, Luno, and Roqqu. Binacne is a very good cyrpto excahnge, it also provides wallet service. i have a binance account i use in investing. Rooqu is a very good crypt wallet for investor in Africa, it recently expand to Europe. It support instant buy and sell of different cryptos and direct transfers to bank and e-wallets in Africa

STEP 2: Create an account – Once you’ve chosen an exchange, create an account and complete the verification process. You’ll need to provide personal information, such as your name, address, and ID documents.

• Create account with binance exchange: CLICK HERE
• Create wallet with Roqqu wallet(instant buy and sell, and bank withdraw): CLICK HERE

If you are registering with any of these platform and you encounter challenge with your verification, please contact us for help.

STEP 3: Deposit funds – After you’ve verified your account, deposit funds using a payment method that’s accepted by the exchange. Popular options include bank transfer, credit/debit card, and online payment systems like Paystack or Flutterwave.

STEP 4: Choose a cryptocurrency to invest in – Once your funds are deposited, choose a cryptocurrency to invest in. Bitcoin is the most popular option, but there are many other cryptocurrencies to choose from, such as Ethereum, Binance Coin, and Dogecoin.

STEP 5: Place an order: To buy the cryptocurrency, place an order on the exchange. You can either place a market order, which will execute at the current market price, or a limit order, which allows you to set a specific price at which you want to buy.

STEP 6: Store your cryptocurrency – Once you’ve bought your cryptocurrency, it’s important to store it securely. You can either store it on the exchange, or transfer it to a personal crypto wallet for added security.

SEE: Why you should start Domain Flipping Business right now

Our tips

If you want to get started with crypto investment in Africa, here are some steps you can follow:

1. Research: Before you invest in any cryptocurrency, it is important to do your research and understand the market, the risks involved, and the various cryptocurrencies available.
2. Choose a reputable exchange: To buy and sell cryptocurrencies, you will need to use a cryptocurrency exchange. It is important to choose a reputable exchange that is secure and reliable.
3. Set up a wallet: A cryptocurrency wallet is a digital wallet that allows you to securely store your cryptocurrencies. You can choose between a software wallet or a hardware wallet, which offers more security.
4. Start with a small amount: It is recommended that you start with a small amount of money that you can afford to lose. Cryptocurrency investment is high-risk, so it is important to only invest what you can afford to lose.
5. Monitor your investments: Keep an eye on the market and your investments to make informed decisions about buying or selling.
6. Consider professional advice: It is a good idea to consider seeking professional advice before investing in cryptocurrency, especially if you are new to the market.

Conclusion

Remember that investing in cryptocurrencies carries risks, and it’s important to do your own research and understand these risks before investing.

Additionally, always keep your crypto investments within your risk tolerance level, and never invest more than you can afford to lose.