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Cryptocurrencies Trading In India, How to make money with cryptocurrencies?

Cryptocurrencies Trading In India, How to make money with cryptocurrencies? Explains the trading mechanism and risks

Cryptocurrencies Trading In India, How to make money with cryptocurrencies? Explains the trading mechanism and risks: In February 2021, US electric car Tesla bought virtual currency Bitcoin for 1.5 thousand dollars (approximately 160 billion INR).

Besides, he clarified the idea that Bitcoin would be used to pay for Tesla car purchases soon and received many expressions.

Until now, cryptocurrencies have had a good image of “thinking,” but since the beginning of 2020, wealthy people and investors have increasingly stepped into their capital.

In the meantime, I will explain how to make money (profits) by investing in virtual currencies and exchanges for trading.

What is Cryptocurrencies Trading In India in the first place?

Cryptocurrencies Trading In India is a trading that does not contain any commodity such as banknotes or coins like the general currency and is traded on the Internet.

Fiat currencies are administered by the central bank of each country, but virtual currencies do not have a central body to govern them.

Thus, the business data is managed by users of a device called the blockchain.

Today, there are many virtual currencies, and it is said that there are more than 1,000 types. Bitcoin is a typical example, but other virtual currencies such as Ethereum and Ripple are also known.

By law, virtual currencies are called “assets”. Initially, it was called virtual currency, but since it has risen to become a crypto asset in the global community it has become integrated into crypto assets through the transformation. amended the 2020 law.

Mechanism to make money with virtual currency

There are two principal ways to “make money” with virtual currency. Similar to stock investment, there are two methods, one is to aim for capital gains and the other is to receive compensation by “mining” virtual currencies.

Earn gains from rising prices in cryptocurrency trading

The value of virtual currency changes daily like stocks and FX. For example, the price of Bitcoin is said to be 10,000 Bitcoin for two pizzas (approximately $ 25) as of 2010.

However, as of March 2021, the value of 1 Bitcoin was close to $ 60,000. If Bitcoin had been bought 10 years ago, the rise in price volatility would have been significant.

Cryptocurrencies Trading In India, How to make money with cryptocurrencies?

In this way, it is possible to generate income by selling the virtual currency when the price increases compared to when it was purchased. 

Besides, Bitcoin can be bought from commodities such as 0.001, so it will be able to invest even at low prices.

There are two types of investments in virtual markets: “in-market” and “in-market”.

“Spot trading” of virtual currency

In-kind trading refers to trading in or buying currency. As a matter of fact, when selling, it is a must first that you have a virtual currency first.

Therefore, it is necessary to buy virtual currency in law such as INR and dollar in advance.

Therefore, in the business of physical marketing, it is unique in that it can not trade more than cash on hand.

“Futures trading” of virtual currency

A futures market is an exchange that promises to “buy and sell” virtual futures in the future. Since it buys and sells before the point, it does not determine the timing of the exchange.

For example, suppose you promise to sell 1 BTC a month later when the value of 1 Bitcoin (BTC) is 5 million.

If the next BTC 1 month is 5.2 million INR, you will receive an interest of 200,000 INR.

Futures markets have the advantage of being able to invest larger cash flows on demand cells.

On the other hand, there are cases where you will lose more than your cash on hand, so you need to be careful. Besides, some exchanges may not be able to support future transactions.

How to make money by mining cryptocurrencies?

Mining is a word translated as “mining”, but in the Bitcoin market, it means “the process of agreeing to exchange information”.

Cryptocurrencies Trading In India, How to make money with cryptocurrencies?

Rewards for these jobs are paid for in the new Bitcoin, so you can earn money by doing mining jobs.

However, high-spec PCs are required for color-only operation. Therefore, for the individual to make money by trading virtual money, it would be realistic to earn money from the benefits mentioned by buying and selling.

How to buy virtual currency?

To purchase virtual currency, you need to use an exchange or a sales office. I will explain the differences between them.

Difference between exchange and sales office

In “exchange trading”, exchanges are made with virtual exchanges. On the other hand, in the “exchange market”, the exchange is not with one currency exchange but with another.

On exchanges, you can buy and sell immediately after ordering, but in exchange, you have to wait for another trader to place an order against you (if you want to sell). ).

On the other hand, forex trading is characterized by lower prices than commodity exchanges.

What are the representative exchanges?

There are many virtual exchanges in India, but the prices and types of virtual combinations vary depending on the trader.

Below are the names of the exchanges and the characteristics of each exchange, so please use them as a reference when selecting a virtual exchange.

Compatible with both exchanges and sales offices

As mentioned above, when buying and selling virtual markets such as Bitcoin, there are two trading methods, “market trading” and “commodity exchange”. Both of these changes are possible with bitFlyer.

You can use both “market exchange” and “stock exchange”, so you can say “until you have used virtual currency, you can do that sell exchange, and once you get used to it, you can do more business. With stock exchange “. You can use it in many ways.

Difference between virtual currency and stock

Many of those who are just starting to invest in cryptocurrencies already have experience in investing in stocks. There are some differences in the investment of cryptocurrencies and commodities.

Before you start investing in cryptocurrencies, it is a good idea to understand the differences.

It can be said that virtual currency has a higher degree of independence in terms of “you can do business without worrying about time”. On the other hand, there is also the disadvantage that “price changes are always stressful”.

The magnitude of volatility

The exchange rate means the difference in the exchange rate. If the conversion rate is high, you can make a big profit in a short period, but on the other hand, you can make a big loss.

It should be noted that the exchange rate of cryptocurrencies is much higher than that of currencies.

As mentioned above, the value of Bitcoin has increased significantly over the past several years. 

However, prices still fluctuate a lot, and prices can fluctuate according to hundreds of thousands of people during the day.

Cryptocurrencies Trading In India, How to make money with cryptocurrencies?

On the other hand, in the case of sales, such cloud exchange rates do not occur.

Especially in the case of Indian commodities, it can be said that it is unlikely that the loss will be greater than expected because there is a system called “stop price” and “stop price”. “that stops the market when the exchange rate is higher than one.

By the way, there is no “low stop” or “high stop” in American products.

Cryptocurrency risk

If you start investing in cryptocurrencies, you must also understand the risks. 

In addition to the “price fluctuation risk” and “liquidity risk” that are common in stock investment, there are “wallet damage risk” and “theft risk due to cyber-attacks” in the investment in virtual currency.

Wallet damage risk

When you make a wallet on your computer or smartphone, the account itself may never be used again due to loss or damage. 

When creating a wallet online, it should be noted that there is a possibility of damage due to the inadequacy of the crypto asset operation/management service provider.

Risk of theft due to cyber attacks

On January 26, 2018, the crypto asset exchange “Coincheck” was hacked from the outside, and the virtual currency “NEM” worth 58 billion INR was stolen. As represented by these incidents, cyber attacks can result in the loss of crypto assets held.

Risk of changes in laws and regulations/tax system

In the future, the Indian government’s legal regulations and tax system for cryptographic assets may change. 

It should be noted that this may lead to problems such as the increased risk of price fluctuations, restrictions/suspension of transactions, and increased tax burden.

Invest with a small amount of money or surplus funds

To avoid various risks, it will be necessary to take measures such as reducing the investment amount itself or investing with surplus funds to reduce the damage.

Take advantage of a cold wallet

For the risk of wallet damage, it is desirable to store virtual currency in an offline environment that is not connected to the Internet by using a cold wallet.

Talk to a legal and tax expert

As a countermeasure against the risk of changes in legal regulations and tax systems, it is desirable to follow the latest trends in legal regulations and tax systems and consult with legal and tax system experts.

Open an account and start cryptocurrency trading with surplus funds

If you want to start trading cryptocurrencies, you have to open an account on the exchange. How about opening an account after comparing the characteristics of the services of each exchange?

Conclusion

Thank You For Reading my blog about Cryptocurrencies Trading In India, How to make money with cryptocurrencies? Explains the trading mechanism and risks. I hope It was Useful For Everyone I Tried to make it Short and Simple.

If you have further queries, don’t hesitate to comment below. I will be happy to help you out.

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