Of course. In fact, we at CoinBeat would argue there is far more money to be made trading cryptocurrencies than simply investing in cryptocurrency. Needless to say, unlike simply investing, trading is a profession and takes years to master. However, once mastered, it can provide great returns and the ability to use both the bull and bear trends in the market. In other words, you can make money while the market is rising and when it is falling too.

That being said, trading is definitely not for everyone, and shouldn’t be done unless you have a deep knowledge of financial markets and strong hands that are not prone to panic. Additionally, it is key to stay on top of all the news from around the sector, and CoinBeat aims to help our readers do, just that.

Why Trading Works

In a single day, cryptocurrency rises and falls and actually has tremendous volatility in comparison to other markets. For example, it is not uncommon for the cryptocurrency markets to see double-digit gains or falls. Specific cryptocurrencies like Bitcoin have been known to rise and fall as much as 20-30% in a single 24-hour period. This means that if you were to buy and sell at the right times, you could exponentially build your capital. In the chart below is 3 days of price volatility of Bitcoin.

If you were to buy during the dips and resell in the subsequent peaks, you would make a very healthy profit. In this particular chart, if you had simply held Bitcoin the whole way through, you would have actually lost around 10%. However, if you had traded, you could have potentially made 20% and that’s in 3 days. Imagine if you were to trade regularly.

Also, there are some exchanges that allow for traders to use leverage and short positions. Leverage means that you can borrow against your trading capital and can thus buy more coins. If your positions go up, you make more based on your chosen leverage.

On the other hand, if those positions that are leveraged go against you, you could also lose more, too. Short positions are when you essentially bet against Bitcoin going up, and get paid when you close a short position similarly to selling Bitcoin at the top of a peak. Both of these methods are used by professional traders and can be very profitable if used properly. They can also be fatal to your capital if they are used improperly.

Get Advice from a Professional

Unfortunately, most people are not equipped with either the knowledge or the time to take on trading cryptocurrency. Unlike the conventional markets, cryptocurrencies are traded around the clock, 365 days a year. This means that traders don’t get the same off-time as in other markets, and portfolios and positions need to be monitored around the clock. This poses a lot of problems for both the average investor and amateur traders.

Fortunately, CoinBeat’s team of writers and analysts connect cryptocurrency investors with professional traders. Through CoinBeat, investors and readers can mimic and copy the positions and trades of expert traders, get valuable insight and analysis, and stay up to date on news that matters to the market. Additionally, subscribing to our daily and weekly market recaps will definitely give you an advantage on making trades based on market news and patterns that have been analyzed by a pro trader. CoinBeat’s aim is to keep our readers ahead of the informational curve and ensure they get the latest news first.

Getting back to the question, trading is likely much more profitable in comparison to simply buying and holding. That being said, it is not for everyone and does involve some professional level knowledge and a vast amount of time to dedicate to it.