A Beginners Guide Trading Cryptocurrency Everything You Need to Know to Start Trading Cryptocurrencies Like Bitcoin, Litecoin, and Ethereum

1. How toTrade Cryptocurrency
– For Beginners

2.  Everything You Need to Know to Start Trading Cryptocurrencies Like
Bitcoin, Litecoin, and Ethereum.
 How to invest in cryptocurrency?
 TIP
 WhatYou Should Know BeforeYou StartTrading Cryptocurrency?
 A cryptocurrency exchange is not part of the regular stock exchange
 A beginner might prefer to trade cryptocurrency stocks
 I think the simplest place to buy, sell, and store coins is Coinbase
 The cryptocurrency market is insanely volatile in 2018
 TIP
 On Cryptocurrency Mining
 WhatYou Need to Know to StartTrading Cryptocurrency
 DO’s OR DON’T

4. We explain how to trade cryptocurrency for
beginners. To start trading cryptocurrency you need
to choose a cryptocurrency wallet and
an exchange to trade on.
From there it is as simple as filling out a form and
waiting for the transaction to process (once your
information is verified with the exchange you pick).
In other words, if you want to trade cryptocurrency
you need:
 A cryptocurrency wallet (or two).
 A cryptocurrency exchange (or two) to trade on.

6. If you want to invest in cryptocurrency, and not just buy/sell/trade, then
you have a few options. New investors can choose between
 The GBTC trust as sold on the stock market.
 A cryptocurrency IRA (we don’t want to recommend one until we have
reviewed them).
 An exchange to buy coins on and a wallet to store the coins in.
 An exchange-broker-wallet hybrid like Coinbase/GDAX (which allows
customers to buy/sell/store cryptocurrency).
 Each option has its pros and cons, but notably, only an exchange-broker-
wallet hybrid like Coinbase/GDAX allows one to trade and invest directly
using a single platform. This page will focus on that option due to its ease
of use for beginners.

8.  A cryptocurrency wallet is a place where you store
encrypted passwords that represent coins (the
equivalent to storing money in a bank account). A
cryptocurrency exchange is like a stock exchange or
like a currency exchange in a foreign airport (a place
people can trade cryptocurrency for other
cryptocurrencies and fiat currencies like the US
dollar). Just like if you want to trade stocks you need
a bank account and access to the stock exchange, it
is the same deal with cryptocurrency.

9. There are only a few things to know about trading
cryptocurrency beyond what was noted above. Below
are a few of the most important things to know before
getting started:
 A cryptocurrency exchange is not part of the regular
stock exchange
 A beginner might prefer to trade cryptocurrency stocks
 I think the simplest place to buy, sell, and store coins is
Coinbase
 The cryptocurrency market is insanely volatile in 2018.

11. Below we will suggest using an
exchange/broker Coinbase, but you can also
use the related GDAX (the pro version of
Coinbase with lower fees). Neither of these is
the same as Wall Street and its exchanges
(same general mechanics, different specifics,
and different entities).

12.  on the stock market (GBTC is a trust that owns
Bitcoin and sells shares of it; trading this avoids
you having to trade cryptocurrency directly). The
main Bitcoin stock here in 2018 is GBTC. Be
aware that GBTC trades at a premium (meaning
bitcoins are cheaper than buying shares of the
GBTC trust), which isn’t ideal. Also,
cryptocurrency trading is a 24-hour market,
where the traditional stock market is not. Learn
more about the GBTC Bitcoin Trust and the
related pros and cons before you invest.

13. but you can only buy, sell, and store Bitcoin,
Ethereum, Litecoin, and Bitcoin Cash on
Coinbase. If you are serious about trading
cryptocurrency, you’ll need another exchange
like Coinbase’s GDAX, Bittrex, Binance,
or Kraken (and you’ll likely want to find a wallet
to store your coins in). See a top 5 list of
cryptocurrency exchanges and the Best Bitcoin
Exchanges ranked (those above are my picks).

14. You can make a fortune in a moment and lose it
in the next whether you trade Bitcoin, another
coin, or the GBTC Bitcoin trust. Consider
mitigating risks, hedging, and not “going long”
with all your investable funds.
TIP: If you trade only the top coins by market
cap (that is coins like Bitcoin Ethereum), or
GBTC, then the chances of losing everything
overnight are slim (not impossible, but slim).
Other cryptocurrencies are riskier (but can offer
quick gains on a good day).

15.  There are a few sides to cryptocurrency. 1. you
can trade and invest in it, 2. you can use it for
transactions (anywhere a coin type is accepted),
3. you can break out a graphics processing unit
and some software and mine coins (see how to
mine coins). Those are all valid and interesting,
but with that in mind, this page is focused on
“trading” cryptocurrency (and therefore also
investing in it). With that said, even if you want
to do the other things with cryptocurrencies, you
still need to be set up for trading.

16.  As noted, one way to invest in cryptocurrency is
via cryptocurrency mining. That is a valid way to start
investing if say you love computer gaming and need a
new rig and want to invest in small amounts of
cryptocurrency while maybe making back some of the
cost of the rig (and maybe even breaking even) but
that is an entirely different subject. The average
investor will want to trade USD for cryptocurrency on
an exchange and avoid the complexities and
investments of mining. In all cases, unless you already
have a good rig with a great graphics card, you’ll need
to put down USD upfront anyway.

17. For those who want to trade cryptocurrency
despite the above notes:
 A beginner should start by choosing a company
with a good reputation that offers an exchange
and wallet (to help keep the process simple).
 A beginner should also start by trading
prominent coins. Currently, in 2018, we are
referring to coins like Bitcoin (BTC) and
Ethereum (ETH). In the future, this could
change.

18.  Since the above is the case, a good start for any
American wishing to trade cryptocurrency is
starting with Coinbase.com (the most popular
cryptocurrency website in America, and a service
that offers a single platform for a Bitcoin wallet,
Ethereum wallet, Litecoin wallet, Bitcoin Cash
wallet, and a currency exchange).
 After you master Coinbase, then you are ready
for say GDAX and other exchanges like Bittrex,
Binance, or Kraken.

19.  TIP: A good first foray into cryptocurrency investing is
the obvious, buying a major cryptocurrency like
Bitcoin. After that, you’ll probably want to trade USD
for crypto on an exchange like GDAX. Once you have
done that, you could try trading BTC and ETH for
other cryptocurrencies. Trading “crypto pairs” can be
rewarding, but it is more complex and often more
risky than just buying a single cryptocurrency as an
investment.
 TIP: Do not do “margin trading” unless you know
exactly what that is and are an expert. Cryptocurrency
is volatile; you can end up losing all your money in an
instant if you aren’t careful.

20. If you don’t understand the tax implications
of trading cryptocurrency tread very
carefully. There are some nasty traps you
could fall into when trading coins. For one,
they are not necessarily considered “like-kind
assets.” If that is confusing, then consider
sticking with trading USD for coins in
Coinbase until you grasp the concept. Learn
about cryptocurrency and taxes.