Home Finance Why is trading better than investing in cryptocurrencies?

Why is trading better than investing in cryptocurrencies?

Trading is a short-term game, and investing, indeed, is long-term. There has always been a tussle between investors and traders: “who will be wealthy in the end?” and, unfortunately, it never ends. There is no statistical data to prove who has made a fortune in the end, but there are certain facts that fall in the trader’s favor.

In this article, we will discuss four points that make cryptocurrencies more tradeable.

Faster growth

Cryptocurrencies are extremely volatile. Due to this, they can give an average return of 20–30% daily. On the other hand, stocks rarely move more than 4% in a day. This nature of cryptocurrencies is most liked by traders because, if the market conditions draw prices down, a trader can short sell it, whereas an investor can only enter into the market when there is a long trade opportunity.

With the right strategy, one can mint money and exit the position after making a profit, whereas an investor has to block his funds until he is profitable.

Consistent income

A trader will always have an upper hand when it comes to consistent income because there is no fixed time horizon in which he has to block money into the market. This is just a matter of a few minutes to hours in which he can exit his position either with a loss or profit but his money will never be stuck in the market for a longer period of time. This in turn, will make him generate income consistently and run the household solely on the trading income.

Fear of missing out

With trading, you always have the benefit of exiting your current position and deploying that money in something that will soon skyrocket. This isn’t possible in investing due to a bigger time horizon which makes no difference in the portfolio in the short run. To liquidate an investment is no smart move when it comes to killing the FOMO inside your mind.

No intrinsic value

No cryptocurrency in this world has intrinsic value. It simply means they aren’t backed by any underlying asset or earnings the way stocks are.

An investor always looks for the intrinsic value before investing and the absence of intrinsic value keeps investors away from trying their hands at the crypto universe. Whereas traders love trading in the crypto market due to its high volatility, they can take leverage and get filthy returns from the market in a single trade.

Huge profits

Believe it or not! When it comes to minting big money, traders only prefer crypto trading because you get the facility of taking leverage up to 200x. However, we never suggest you to take higher leverage as it increases the possibility of account liquidation. Being mindful of taking leverage will surely help you to grow your accounts to big figures.

Takeaway

Trading in cryptocurrency is like playing the stock market except you earn money by doing something other than opening your money. It is difficult to regulate cryptocurrency. If you want to get regular update about best crypto signals telegram channels so then make sure to check us as https://www.wealthstand.com/best-crypto-trading-telegram-channels we post a plethora of insightful content under the sky of finance.

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