History was made on April 12th, 2021 with Bitcoin breaching US$ 60,000 for the first time ever. The historic price rise of this cryptocurrency sent shock waves across the globe and gathered huge attention. People like Elon Musk got involved in the crypto game and the world realized that crypto trading is definitely the next big thing.
Not only Bitcoin, others such as Ethereum, Dogecoin, Polygon, etc. have seen a huge rise in their trading volumes that has helped shoot up their price to all time highs as well. With news of people becoming overnight millionaires coming from all parts of the globe, cryptocurrency trading is becoming a MUST DO activity for all.
In India as well, the past one year has been exciting for the crypto space. With Supreme Court overturning the ban imposed by RBI on digital currencies, people have flocked to the cryptocurrency exchanges like WazirX, CoinSwitch Kuber, etc. and crypto trading in India is at an all time high.
The question in everyone’s mind right now is – What is crypto trading? How does it work? How can I find the next Bitcoin? And most importantly, how can it make me a millionaire?
So, without wasting a moment, let’s get started.
What is cryptocurrency?
Cryptocurrencies are digital currencies that can be used in lieu of goods and services. They are acting as a parallel currency to fiat (or everyday) currencies like USD, INR, GBP, etc.
These coins / tokens use blockchain technology to store and transmit data. The technology works in a decentralized manner which eliminates the need of a central authority and is regulated by the community rather than by the government.
Another major advantage of blockchain is its security and immutability. The information once stored in a blockchain can never be changed, hence making it nearly impossible to forge.
As of 1st June, 2021, there are 10,198 cryptocurrencies in the world as per data from CoinMarketCap.com. Bitcoin is the biggest currency in terms of market cap followed by Ethereum.
A majority of these cryptos are tokens which are issued by businesses dealing in platforms, services and products utilizing the blockchain, DeFi & NFT technologies. This means that in order to use / buy their service or product, you need to purchase their tokens.
Apart from this, cryptocurrencies can be used to trade like company stocks and make money like you do with stock trading.
Why is crypto trading so hot right now?
While I have already given the background at the start, let us delve deeper and see why everyone wants to trade cryptocurrencies right now.
Unrealistic returns & price hikes –
The biggest reason to trade in cryptos is the fact that they have the ability to turn you into a millionaire literally overnight. For example – Dogecoin, a meme coin, was trading at INR 0.4153 as of 1st Jan, 2021. Within a span of 4 months, Doge touched an all time high of INR 54.06. This means that an investment of INR 10,000 in Doge at start of January would have yielded a whopping 130x of profits. This promise of huge returns is what makes crypto trading the next big thing.
Current bull run in the cryptocurrency market –
As per experts, the cryptocurrency market is witnessing a bull run. Based on estimates by many prominent sources, Bitcoin is expected to hit $100k by the end of this year. This has created a huge demand for digital assets across the globe and people are eager to get in on the action.
Favorable stance of the regulators regarding crypto platforms –
Over the years, governments have understood the importance of the blockchain technology and are showing a favorable stance with respect to the crypto space.
Ease of access to crypto assets –
With opening of a large number of crypto exchanges across the world, there is an ease of access to these digital currencies. In India, you can trade in cryptos online easily via WazirX, CoinDCX, CoinSwitch Kuber, etc. If you want to know more about these platforms, head over to our detailed article here.
Support from celebrities for many cryptocurrencies –
When people like Elon Musk tweet, everyone notices. A single tweet from Musk a.k.a the Dogefather was able to send Doge to the moon. Such favorable social appeal has also led to the rapid rise in the number of crypto traders at a global level.
How can I become a cryptocurrency trader?
If you’re looking to join in the action, there are many ways. However, I am going to tell you about the easiest way.
In order to be able to trade in cryptocurrency in India, you need to have the following –
- A valid PAN Card & Aadhaar Card
- A bank account under your name
If you check the above, congrats, you are now ready to enter the cryptocurrency market. All you need to do now is to register as a user with any of the available cryptocurrency exchange in India. Once done, you must deposit INR from your account to their platform to start trading.
For a detailed step by step guide, refer to my other article on “How to buy cryptocurrency in India?”
This article will guide you through the process and help you buy your first crypto and that too after doing your own research.
What do I need to take care of before I trade in cryptos?
While the rewards in cryptocurrency market is sky high, so are the risks. It is very important for you to understand that you money is at a very high risk in the cryptocurrency space and you must NEVER invest more than what you can stand to lose.
As a new trader, you have to be very careful and not fall for marekting gimmicks. These often lead to people trade in the low value tokens which ultimately provides no gains in value.
Apart from this, there are a few more things that you need to take care of as a new investor in the cryptocurrency space –
- Always do your own research and learn all you can before investing in a coin / token. Do not fall for the words of the so called crypto experts on Twitter, Telegram, YouTube, etc. Check their credibility before trusting anyone. Using technical analysis like charts, fibonacci retracement, MACD analysis can also help make the correct trade decisions.
- Find a reputed exchange to trade. It is very important to choose a platform that offers you the best deal when it comes to trading fee, withdrawal / deposit limits & the number of cryptos you can trade in.
- Different people have different risk taking capabilities. Understand this and do not invest in something just because a friend or relative is doing it. Avoiding FOMO (fear of missing out) is very important as it can lead to losses.
- Set your sell targets and stick to them. Do not get consumed by greed since if you miss the opportunity to sell at the right time, you might be trapped in a bear market and will have to wait a while before your investment can bear fruits.
- Read about your local regulations for the latest stance of your country with respect to cryptocurrencies. This is important since you do not want your funds to get stuck in the market due to a regulatory hindrance. A good example of this is the recent crackdown on cryptocurrency mining & other dealings by China.
Conclusion – Invest with caution
My personal opinion on the cryptocurrency trade is that you should get in on it, but with caution.
Do not have unrealistic expectations from the start. Begin your journey slow, learn about the underlying technologies and their real world use cases and do not fall for the “easy money” trap.
It is very rare that you’ll be able to become a millionaire in a day (I really hope you do!! Same for me too :p).
However, with research backed investments and some patience, you have a high probability to gain value on your money.
While the future of cryptocurrency seems to be bright, we cannot be certain. The best option right now would be to invest with caution and keenly watch the market.
Are you ready to start with cryptocurrency trading? Sign up on WazirX today and trade on the highest number of cryptocurrencies with INR pairing that include Bitcoin, Dogecoin, Litecoin, Ripple, Ethereum, Shiba Inu, etc. to name a few.
Ashish is Write it Right’s go to man for all things “Finance”. He started his passion for blogging and content writing during his college days back in 2013 and has been on and off ever since.
His hobbies include trying out different cuisines, binge watching shows, traveling and sleeping!!
Currently, he works full time as a Credit & Portfolio Manager and with his blogging, aims to educate the masses about Finance, Fintech and the Cryptocurrency revolution.