What is the difference between trading and investing in Bitcoin?

4月 4, 2021
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Education article: Trading vs Investing in Bitcoin

Bitcoin is the first, largest, and most famous digital currency in the world. It launched in 2009 and its value reached its peak at nearly $20,000 in 2017. Then, it again surprised the world with its record highs in 2020 and the beginning of 2021 and recorded an all-time high near $62,000.

Confuse trading and investing in Bitcoin

Here is a summary of the main differences between investing in cryptocurrencies and trading:

  • Trading (short term)

暗号通貨取引 is the process of buying and selling over a short period of time. Here are some key points about trading cryptocurrencies:

Cryptocurrency trading involves short-term profits, based on rigorous technical analysis and short-term trends.

It requires gaining the necessary experience to trade effectively with more knowledge, research, and learning – as trading is more than just buying the cryptocurrency and keeping it for longer periods of time.

You will be unsuccessful for a long period of time, and you will need to learn how to deal with that emotionally. Limiting your losses is an important part of becoming a successful trader, for example:

The current price in the trade doesn’t matter as much as the investment, since traders focus on the gains in short-term trades, not the general valuation of the cryptocurrency and the concern about whether it might be over or undervalued.

  • Investment (long-term)

Long-term investment in cryptocurrency requires buying bitcoin or another digital currency and then storing it in a secure digital storage wallet (like putting money in your bank securely). Here are some key points about investing in cryptocurrencies:

Long-term investment in cryptocurrencies involves making a buying decision based on long-term fundamentals and trends. The goal is to eventually sell your cryptocurrency at a price much higher than the price you bought it at.

While price volatility can and will happen, the real long-term investor will skip the downturns as well as the upturns, aiming to make the biggest long-term profit.

You will need to do research to find the best storage wallet. The cold storage wallet keeps your cryptocurrency completely offline, which makes it a safer storage method than a hot wallet that keeps your digital currency online. Digital wallets have become easy-to-access items and you can buy it safely online at non exorbitant prices.

著者 モハメド・アブデルハリク

プロのトレーダー兼アナリスト、2004 年から金融および外国為替市場のエコノミスト。エジプトのアメリカン大学で MBA を取得。モハメッドは、多くの国際外国為替および金融取引会社で経済ライターおよびテクニカルおよびファンダメンタルズアナリストとして、英語とアラビア語の両方で日々働いています。