Thursday, 08 September 2022 08:33

How To Buy Cryptocurrency And What Types Of Crypto Exist?

How To Buy Cryptocurrency And What Types Of Crypto Exist? pixabay

Crypto trading and investment have become so popular due to significant fluctuations in the crypto market. Crypto rates may change even many times a day, which opens a lot of opportunities to receive a profit by buying and selling digital assets following trading strategies.

To buy and sell cryptocurrency, investors use crypto platforms that offer a variety of assets and trading tools.

Some trading strategies imply that users open and close positions (buy and selling cryptocurrency) on cryptocurrency exchanges many times within one day. Other strategies are designed for long-term periods. Beginner traders should start their journey to the crypto world with long-term strategies, for example, the “Buy and hold” strategy that implies that you buy cryptocurrencies and hold them for several weeks or months. Such a strategy gives time to reflect and make a weighted decision. 

Strategies like “Day trading” or “Scalping” mean frequent trading when you buy and sell cryptocurrency many times a day. Some trades are opened and closed within 15 minutes. 

Frequent trading is suitable for experienced investors who can react to market fluctuations quickly and make correct decisions in a short time.

Now let’s figure out the types of currencies in the market. 

Types Of Cryptocurrency

Cryptocurrency exchanges offer a variety of crypto assets:

  • coins

  • tokens

  • altcoins

  • stablecoins

  • DeFi tokens

  • NFT

  • etc.

The four major types include utility tokens, payment, security tokens, and exchange tokens. 

Utility tokens. Such assets provide their holders access to platforms or products where they operate. Utility tokens represent the value of a blockchain underlying the product.

Security tokens. They are used to tokenise stocks, property, etc. and to secure their value.

Payment tokens are used for buying and selling goods with no middlemen.

Exchange tokens are native currencies designed especially for cryptocurrency exchanges.