Despite the continued growth of the cryptocurrency market, this has yet to enter the conscience of mainstream investors in the UK. In 2017, it was estimated that around 97% of Brits had yet to buy cryptocurrency, despite the fact that Bitcoin’s price increased by more than 2000% throughout the course of the year.
This suggests that further education is required if investors are to fully embrace cryptocurrency in the UK, as this will help individuals to mitigate their risk and profit from the growth potential within the marketplace.
Understand the Economics of Cryptocurrency
If you’re to successfully , it’s imperative that you understand the unique economics that underpin the market. The most important aspect of this is supply and demand, as there’s a finite source of crypto tokens like Bitcoin available in the world.
This is because they have to be “mined” electronically through a complex and time-consuming process. In total there’s thought to be a circulating supply of 16.7 million Bitcoins on the market.
This relative lack of supply underpins the volatility that defines cryptocurrencies like Bitcoin, while it was also thought to be largely responsible for its rapid price growth as demand grew exponentially in 2017.
Make the Most of your Available Crypto Trading Resources
Once you’ve grown to understand the economics behind cryptocurrency, the next step is to build a diverse portfolio using a number of resources. To begin with, you’ll definitely need to have access to a viable trading platform like , as this enables you to build and manage a portfolio through a single interface and in real-time.
This platform also offers you access to a wide range of objective charts and analytical tools, which can inform your crypto trades and increase your chances of achieving a profit.
You should also consider reviewing technical analysis indicators like the Relative Strength Index (RSI), which measures the speed and strength of individual price movements in the market by analyzing a token’s past performance.
Diversify your Trading Portfolio
The importance of diversification is central to every successful portfolio, as this spreads risk across strategically-selected assets and markets. In this instance, it’s crucial that you identify each coin’s individual risk level, as this can inform every single selection and contribute to a balanced (and ultimately sustainable) portfolio.
Essentially, tokens can be divided into three distinct categories: low, medium and high-risk cryptocurrencies. Over time, this could translate into an effective and profitable trading strategy, and one that can help deliver returns over time.
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