Speculation in digital currencies

 Speculation in digital currencies


Speculating in digital currencies is one of the most profitable and easiest ways to make money. Many people today learn how to trade cryptocurrencies by getting in and out of the market within a day, and taking advantage of fluctuations in currency rates to profit. This guide explains the basics for anyone who aspires to learn to speculate in cryptocurrencies.

Fundamentals of speculation in digital currencies

Scalping in cryptocurrency is a strategy that involves entering and exiting a position in the market on the same day. The aim of speculation is to profit from small movements in the market. It is considered particularly profitable given the volatility of cryptocurrencies compared to other assets which can rarely see a 10% jump in value in a single day.

You need a proper cryptocurrency scalping strategy, and a good understanding of fundamental and technical analysis. Most speculators rely on price action, volumes, chart patterns and other indicators to determine entry and exit opportunities and make their investment decisions. They also monitor fundamental news and other updates that could affect digital asset prices, especially in the short term.
Why learn to speculate in digital currencies?
The main reason to learn to speculate in digital currencies is to make profits. Cryptocurrency prices are more volatile than any other asset class, providing ample opportunity for speculators with knowledge of the market. As long as you have a solid scalping strategy and can analyze trends, the cryptocurrency market could be profitable for you.
Another advantage of cryptocurrency speculation is that it offers short-term opportunities. Instead of buying, holding or taking long positions, you can speculate and profit from the market in a very short period.
How do you speculate in digital currencies?
As mentioned earlier, cryptocurrency speculation will only be successful if you have a good strategy. Below, you will learn about three strategies that can help you increase your profits.
Scalping
Scalping is a speculative cryptocurrency strategy where scalpers look to take advantage of increased trading volume, as they can exit trades within minutes after entering them, making small gains along the way. Some scalpers also use trading bots to automate their activities, so it is one of the most convenient strategies for them.
Speculators need a huge amount of capital to earn good returns from this strategy since the gains are very small.
Arbitrage
Arbitrage is one of the most popular strategies in the market, and it is based on buying a digital currency on one platform and then selling it on another, taking advantage of the price discrepancy between the two platforms. Bitcoin on Binance could be $45,000 for example, while the same asset is trading on Coinbase at $45,500. If you buy Bitcoin on Binance and then sell it on Coinbase on Coinbase within minutes, you can make a return of $1,000.
Just like scalping, arbitrage tends to result in small gains. So you have to increase your order size to increase the profits you can make.
The best cryptocurrency trading platforms
If you are looking for the best platform for cryptocurrency speculation, we recommend eToro. Created in 2007, this platform has been known for its versatility and flexibility. It also offers one of the best cryptocurrency applications in the market, and is fully regulated by several high-profile financial institutions.
With a well-designed interface and a low minimum ($10), eToro allows beginners easy access to the market, and is known for its low trading fees of just 1%.
Some of the other reasons why eToro is one of the best cryptocurrency scalping platforms is that it offers a Copy Trader feature that allows beginners to easily make money by finding top traders on the platform and copying their moves.
What are the best digital currencies for speculation?
There are many options that you can choose from when it comes to cryptocurrency speculation, but here are the best ones:
Lucky Block
The LBLOCK token from Lucky Block is first in the list of the most preferred cryptocurrencies for speculation, due to its great value and the strong project it backs.
LBLOCK was launched in January 2022 by Lucy Block, a blockchain game. The platform uses blockchain technology to promote transparency and fairness in online gaming, providing fast speeds and great openness to the world.
With LBLOCK, Lucky Block users can access all the games available on the platform. The asset launched with a listing price of $0.00020, before rising to an all-time high of $0.0096 less than a month later.
With a current price of $0.0039, LBLOCK is still 10 times more valuable than when it was launched.
Dogecoin
Dogecoin comes in as the second best cryptocurrency for speculation, thanks to the huge price volatility it enjoys, which provides great opportunities for speculators.
Other advantages offered by this digital currency is that it focuses more on fundamental news than technical reports, which makes the task of analysis easy for speculators who do not know much about technical analysis. Remember to only risk a very small percentage of your capital on Dogecoin as it is a very unstable currency.
Bitcoin
Bitcoin is a great option for speculation in digital currencies, as it is the largest digital currency in the market, with very large liquidity and high trading volumes. So if you are a speculator, Bitcoin will give you many opportunities to make good daily profits.
Investment and speculation
What are the main differences between “investment” and “speculation” and where do cryptocurrencies fall into the range of buying opportunities?
The global economic volatility witnessed by the COVID-19 pandemic has clearly demonstrated the best and worst sides of investing. For those who have remained calm during the uncertainty and stuck with their investments over the past two years, they are reaping the fruits of the market rally in 2021.
The decision on how and where to invest your money is really up to you. If you are looking for a fun time, then speculation might be ideal for you, but if you are looking forward to long-term profits, then you should consider the more traditional ways of investing your money.
What is the difference between investment and speculation?
An investment is an asset or item acquired with the aim of generating income or increasing value in the future, while speculation is a financial transaction that involves significant risks, but with the expectation of significant gains.
The main difference lies in the amount of risk involved in each. We know that all investments carry some level of risk, however the potential for massive gains or losses is significantly higher when it comes to speculative buying.
One of the basic tenets of aggressive investing is “time in the market” rather than “timing the market.” But when it comes to speculation, you deal with the market like a casino, where you have to be right twice in order to “win”, that is, to be right in buying at a low price and in selling at a high price.
Investing and speculating in digital currencies
In the words of social commentator John Oliver: “Bitcoin is everything you don’t understand about computers combined with everything you don’t understand about money, so what could go wrong?”
What is digital currency? According to the NASDAQ, it is a system that runs on blockchain technology as a digital ledger of transactions. No single system controls this ledger, rather a network of decentralized computers keeps the blockchain working and authenticates its transactions.
Digital currencies are notorious for their unpredictable price fluctuations, which can make them financially speculative rather than a long-term investment.
Speculating in cryptocurrencies is a very profitable endeavor especially for short-term traders. But as long as you have a proper strategy, you won’t have a problem.
Disclaimer: The content of this article is for informational purposes only. The information provided should absolutely not be considered as an investment advice or recommendation. There is no express or implied warranty as to the accuracy of the information or data contained herein. Users of this article agree that Money Secrets does not accept responsibility for any of their investment decisions. Not every investment or trading strategy is suitable for anyone. See the risk warning statement.