A Crypto trading exchange is an online marketplace where Crypto buyers can buy, sell, and trade Cryptocurrency. A Cryptocurrency trading exchange works similar to an online brokerage, as Crypto buyers can deposit fiat currency (such as U.S. dollars), and use those funds to purchase cryptocurrency online.
If you are planning to buy or sell your Cryptocurrency, you will need to use a Cryptocurrency trading exchange platform. The trading exchange is an online service that often works similarly to a Stockbroker, giving the Crypto buyers the tools to buy and sell digital currencies like Bitcoin, Ethereum, and Dogecoin.
The best Crypto trading exchanges make it easy for Crypto buyers to buy and sell the Cryptocurrencies they want with low fees and strong security features.
How to Start Crypto Trading Exchange
If you are broke and you want to be rich through a Crypto trading exchange, you will need luck or a long time to be rich. Crypto trading exchange is not a get rich quick scheme. There are various ways you can earn from the Crypto trading exchange market and they all need skill, luck, or patience.
Airdrops and Bounties
You can earn without any capital by participating in Airdrops and Bounties. Airdrops are like Facebook and Instagram giveaways. You will get free tokens/coins from the Crypto developers and through you, others will get to know about their project as you are required to perform some tasks to qualify. Tasks may include sharing the Airdrop link, tagging people, liking their pages, etc.
Many Crypto companies distribute free Crypto coins to their communities to increase their project’s visibility, increase the circulating supply and stimulate the Crypto trading exchange market. These free distributions are commonly known as Airdrops.
Most of the Airdrops are “bounty” drops, which will reward users with tokens for completing simple social media tasks by Joining the companies Telegram group, reposting on Twitter, etc. This Airdrop offering creates a win-win scenario because the Crypto company gets free marketing, and users will get free crypto.
Other Airdrops will reward users for simply holding a specific Crypto coin without the expectation of any reciprocal consideration. The Airdrop claim process differs from project to project. Some “holder drops” will drop tokens automatically into the wallets of users who own a specific Crypto coin.
Other projects are snapshot-based, and can only be claimed by users who held the required token during the snapshot, which is a record of token holders taken at a specific time/block. List of Real and Valuable Crypto Airdrops
Spot Trading on Centralised or Decentralised Exchanges
Crypto traders can earn from Crypto trading exchanges by engaging in Spot Trading on Centralised or Decentralised exchanges. Spot trading involves buying coins/tokens when you presume/analyse they are cheap and selling when they are more valuable.
This requires patience for maximum profit as some coins may take months or years to increase their small capital to huge gains. We’ve seen people who turn 20k Dollar investment to 2 million Dollars but for it to make the news shows it does not always happen. You also need to be earning in other ways for you to be able to be patient and wait for huge profits. Else hunger can make you sell at a loss.
You can as well have short term smaller targets like 2%-30% profit but you need a huge capital to enjoy this. Imagine you have only $100 and you do 2%? You won’t be happy with your trades. But someone with $10k capital can do 2% daily and manage.
Trading Futures Crypto
Another Crypto trading exchange you can earn from is by trading futures Crypto. With futures trading Crypto you don’t only make money when the price goes up, but you also make money when the price goes down.
You can buy/long when you feel the price will go up, and then sell/short when you feel the price will go down. The leverage feature on Futures makes it sweeter and deadlier at the same time, As you can trade with up to 100x of the money you have. Only the skilled and less greedy will survive.
Crypto futures trading is different from spot trading in many ways as it doesn’t require participants to hold any assets to participate. Instead, Crypto traders look to buy or sell derivatives contracts, which represent the value of given crypto at a specific date in the future.
Essentially, Crypto futures trading allows Crypto investors to speculate on the future value of a cryptocurrency. Crypto traders can go long to wage on a price advance or go short to anticipate a price drop. One of the most important benefits of Crypto futures trading is the use of leverage.
Leverage allows for better capital efficiency as traders do not have to lock up entire amounts of capital. It increases both potential returns and risks, which is why Crypto traders must always exercise caution. A leverage of 2x or 5x would be considered appropriate for those who are new to Crypto futures trading.
Especially, for Crypto traders who want to use Crypto trading exchange to derivatives as a defensive hedge for their portfolios. If an asset were to perform poorly, or opposite what is speculated, a futures trade hedged against this outcome with a certain amount of leverage can compensate for the loss. Why Invest in Cryptocurrency Futures
Crypto Staking or Farming
This is another Crypto trading exchange where you can also earn by Staking or farming. Staking is like a fixed deposit in crypto. You buy crypto and stake then you earn rewards by holding that crypto. This needs patience and also good capital to enjoy the benefits.
For Crypto investors seeking liquidity when comparing Crypto farming vs. staking, the winning strategy is clear. Crypto staking offers increased returns (or APY) when investors choose to lock in their funds for prolonged periods. Yield farming, however, doesn’t require investors to lock in their funds.
Crypto Staking allows Crypto investors to generate rewards immediately during transaction validation. As a result, it can be a good short-term investment that reaps steady profits. For example, a Crypto staking strategy can be used for mining a PoS coin like Cardano ADA. Staking ADA offers no additional risk beyond owning Cardano.
Peer to Peer Crypto Trading
Peer-to-peer Crypto trading refers to the Crypto trading exchange or sharing of information, data, or assets between parties without the involvement of a central authority. Peer-to-peer (P2P) involves decentralized interactions among individuals and groups.
This approach has been used in computers and networking (peer-to-peer file sharing), as well as with trading virtual currencies. With currencies, P2P refers to the exchange of cryptocurrencies, especially Bitcoin, which was created to enable anonymous P2P transactions that don’t require processing by a financial institution.
However, not all cryptocurrency exchanges are truly peer-to-peer. Many of them are centralized exchanges subject to the regulations of the countries in which participants live. This means that governments sometimes require the exchanges to collect information about users’ identities and transactions, resulting in an erosion of the privacy for which Bitcoin was aiming
You can do some peer to peer trading by buying Crypto coins of fellow traders and also selling to those who are in need and adding a small percentage as your profit. Let’s say you buy at 560 and sell at 565 per dollar.
If you can do all of the above mentioned Crypto trading exchanges, you will always be earning from Crypto. But if you are a newbie, you will likely do only spot Crypto trading and that needs some patience.
Every Crypto trader started from spot and spot Crypto trading exchange has turned many novices into millionaires. Only invest what you can afford to lose as Cryptocurrencies are very volatile assets.
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