Friday, March 31, 2023

What is Cryptocurrency – Important Things to Understand 


What is Cryptocurrency

There is much buzz around cryptocurrencies these days because a lot is happening in the crypto market. The price of many digital currencies is fluctuating due to the current bearish runs, and everyone is making predictions.  

As a crypto investor, paying heed to everything that people tell you is not something you should do. Cryptocurrency has always bounced back strongly after a bearish run is over in the past and crypto experts expect something similar to happen soon. 

But when you are investing in cryptocurrency, there are certain things you should be careful about. It is crucial that you should plan your crypto investment in a comprehensive way to avoid losses when price fluctuations take place.  

Let us find out what you need to know as a crypto investor.  

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Understand Cryptocurrency  

The first thing every crypto investor should do is to build an understanding of the crypto market and how things work. Cryptocurrency is relatively a new currency as compared to Fiat or traditional currencies and understanding them is important.  

Bitcoin (BTC) was the first-ever cryptocurrency which was launched in 2009 and people at that time were accustomed to bank transactions. Using a digital currency for purchasing goods and services was an alien phenomenon and many believe cryptocurrency to end soon.  

But things have changed quite remarkably in the favor of the crypto world. Fast forward to 2023, BTC is the world’s largest cryptocurrency by market capitalization and over 10,000 alternative coins, collectively known as altcoins, have been launched too in the market.  

Cryptocurrencies are digital currencies which exist on blockchain technology and have no physical presence. These are decentralized or unregulated currencies which are free from financial regulations imposed by banks or government institutions.  

To ensure maximum security of users, blockchain technology is protected by cryptography which consists of complex mathematical problems. This incredible technique effectively enhances the safety of crypto users as it makes it extremely difficult for any hacker to hack the entire blockchain in one go.  

Carl Runefelt, alias, The Moon, is a global crypto leader who has invested in more than 350 crypto startups.  

On buying his new watch with cryptocurrency, he said, “If I’m gonna pay exactly what this watch is worth, then I’m gonna have to either find a gold bar which is exactly the right weight or I’m gonna have to use a bunch of small gold bars and either way it’s not gonna be very easy, but with a crypto, I can send the exact amount and within seconds or minutes.” 

Invest Wisely  

The second thing a cryptocurrency investor should do is invest wisely. Cryptocurrencies attract investment because of their versatile nature but you should take each step carefully.  

Crypto experts recommend investors invest in a cryptocurrency that they can easily afford to lose. Since cryptocurrencies are decentralized currencies, their value can fluctuate at any time.  

A bearish run in the crypto market can be a huge problem for anyone since cryptocurrencies tend to lose value in such a scenario. So, instead of putting all your life savings into a digital currency, you should start your investment with a small amount.  

Devise a Trading Strategy  

Devising a trading strategy is yet another important task for any crypto investor. Without a trading strategy, you might end up losing a lot in the crypto business.  

Successful crypto investors devise a trading strategy and follow it throughout. There are multiple trading strategies you can follow when doing the crypto business.  

Carl Runefelt, on his YouTube channel, The Moon, believes, “Trading is fun as well of course but that’s active management and you know there are different times for different strategies but if you want to make money passively and always have like a stream of income then I think to look into different strategies.” 

You can follow the dollar-cost average trading strategy under which you can trade cryptocurrencies when their value fluctuates. You can sell a digital currency when it hits the top value and purchase other coins that are cheaper.  

Likewise, diversifying your investment in multiple cryptocurrencies is another important trading strategy you can follow. Instead of putting all your money in one cryptocurrency, you can invest in multiple cryptocurrencies which can help you avoid losses and facilitate trading.  


Cryptocurrency has withstood the test of time and many digital currencies are doing remarkably on the blockchain.  

The bearish run in the crypto market presents an excellent opportunity for investment since many digital currencies lose value and are affordable.  

You can follow the above-mentioned tips when investing in cryptocurrencies and make handsome profits by avoiding losses.  

What is Cryptocurrency

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