The following article will show you how to make money with cryptocurrency in Australia.
It’s a simple, step by step guide for those who are looking to get started with crypto trading or just want to learn more about it.
For the purpose of this discussion, I am going to assume that you know absolutely nothing about cryptocurrency trading and want to start from scratch. So, if you don’t know what Bitcoin is, then I would suggest reading up on it first before continuing any further!
That being said, let’s begin!
What To Do First?
Before investing any of your own money into cryptocurrencies, my biggest tip would be: TAKE YOUR TIME AND RESEARCH! Do not rush in headfirst without doing your research. I cannot stress this enough.
“But how do you really make money from Bitcoin?”
The truth is, there are several ways to earn money from bitcoin and other cryptocurrencies: it can be by trading them on an exchange, by accepting them as a means of payment or even mining new coins. So what we want to focus on today is “trading” or “cryptocurrency trading”.
What Is Cryptocurrency Trading?
When you trade cryptocurrencies such as Bitcoin, Litecoin and Ethereum with fiat currencies such as Australian Dollars (AUD), US Dollars (USD) and South African Rand (ZAR), for instance, you are engaging in cryptocurrency trading. Although the currencies we mentioned above are the most common ones to trade, you can easily trade Bitcoin and other cryptocurrencies for goods and services.
At its core, cryptocurrency trading is very easy: You buy a bitcoin (or any other crypto) at a lower price than what you sell it at and pocket the difference. For example, if 1 BTC = AUD 10,000 today yet you manage to purchase 1 BTC for AUD 9000, then you have just earned yourself AUD 1000! But before jumping in head first with this kind of investment strategy, there are some important things that you should understand about trading cryptocurrencies.
Trading Cryptocurrencies Is NOT A Get Rich Quick Scheme
Unfortunately, many new traders seem to think that they will be able to buy a cryptocurrency at one price, wait for it to go higher and then sell it back at that price for a profit. Unfortunately, the volatile nature of the cryptocurrency market makes this impossible.
To give you an example of how difficult this actually is, let’s take a look at Ethereum prices over time:
Ethereum has made more than 10 000% gains in 2017 alone! While these kinds of returns are great if you were smart enough to invest early on, most retail traders missed out on these kinds of gains because they bought high or sold low. Imagine buying 1 BTC when ETH was $10 but selling it when it hit $100? You would have lost your shirt! And that, my friend, is the EASIEST way to lose money in cryptocurrencies. Trading requires patience, discipline and most importantly, knowledge!
Why Do Cryptocurrencies Experience Such Large Price Swings?
The volatility that is associated with cryptocurrencies stems from several factors. It includes but is not limited to:
- Lack of liquidity small market capitalization
- Low transaction volumes
- Little to no regulation
- No central authority backing
- Lack of historical data
- Negative news coverage
While many traders will simply attribute the high volatility of cryptocurrencies as a key reason for day trading these currencies, there is much more than just this. If you want to learn more about the factors that affect the price movements of Bitcoin and other cryptocurrencies, then check out this article.
Where Can You Buy and Sell Your Cryptocurrencies?
You can buy and sell your cryptos on several different exchanges. Depending on where you are in the world will decide which exchange would be most optimal for you to use. These days, there are so many cryptocurrencies exchanges available that it can become quite overwhelming when choosing one.
To help make things easier for you, I have tried out some of the top exchanges in Australia and prefer to use Saxo Bank as they offer excellent online tools.