As the digital currency market continues to rise, professional traders are taking advantage of price fluctuations to make a profit by buying and selling digital currencies. But what are the ways to buy and sell digital currencies and what is the best way to trade in this market?
Based on that an article According to the Crypto News website, we have examined the principles and foundations of converting cash into digital currency and “digital currency with digital currency” transactions, and have compared the advantages and disadvantages of these two methods.
Convert cash to digital currencies; A simple and efficient way
Trading and converting cash into digital currencies is the first step for those who are new to the market. Newcomers usually start investing in the digital currency market by buying bitcoins in Rials from domestic exchanges.
Traders who are a little more professional usually transfer their rials to stable currencies such as Tetra, transfer them to foreign exchange offices and then start buying and selling popular currencies in the market. If traders want to convert their assets back into cash, they must first deposit their digital currencies in one of the domestic exchanges and then sell them in the rial markets.
Because the cost of transferring some digital currencies is considerable, traders who want to cash in on their assets usually convert all their currencies into one of the reputable stable currencies to reduce the cost of transferring them and then sell them at one of the local exchanges. میرسانند.
Given the tremendous returns of digital currencies, especially Bitcoin and Ethereum, in recent years, investors who have converted their cash into digital currency and have not touched it for several years have certainly made good profits by now.
As a result, converting cash to bitcoins and other digital currencies can be said to be one of the simplest and, of course, the most important ways to invest in this market. It seams.
Convert digital currencies to each other; How do professionals use market cycles?
Given the current state of the world economy, where printing machines are working faster than ever and fiat currencies are becoming more and more valuable than digital currencies, some experts believe that converting digital currencies to each other is the best way to trade in this market, especially if You are looking to make a profit from market cycles.
Su Zhu, CEO of Three Arrows Capital, tweeted a few months ago:
You can trade your bitcoins for as little as $ 41,000 instead [یا پول نقد] Convert, exchange it with the Ethereum. Turn your digital currencies into other tokens if you want to use market cycles. [چراکه] Digital currencies are always more valuable than Fiat currencies.
The conversion of digital currencies to each other is done with the aim of taking advantage of market opportunities, thus maintaining your capital in the form of digital currency.
Bitcoin, Ethereum and Stable Coins such as Tetra, USC (USDC) and Dai (DAI) are digital currencies that traders often use to maintain the value of their capital.
Benefits of Digital Currency Trading with Digital Currency
Experienced traders who want to take advantage of investment opportunities in the emerging DeFi market and sometimes buy and sell coins can benefit from better services by staying in the digital currency space, as this gives them more flexibility and benefits. .
The following are some of the most important benefits of digital currency trading with digital currency:
- Ability to transfer funds faster
- Greater security of capital by trading in decentralized exchanges
- Opportunity to make a profit from short-term and long-term investments
- Possibility of investing in Difai
If you keep your capital in digital currency, you can quickly make a new transaction when the opportunity arises, in which case you no longer have to wait for a bank transaction.
Using decentralized exchanges to convert digital currencies to each other is a form of digital currency trading with digital currency. Using decentralized exchanges helps keep your assets safe; Because on these platforms, digital currencies are stored insecurely in wallets made by the user.
On the other hand, when converting cash to digital currency, you have to keep your assets in centralized exchanges for a while, however short; Exchanges, many of which are always at risk. This is why many professional traders prefer to keep their assets in digital currency and operate in decentralized exchanges.
If you keep your capital in digital currency, you will be able to invest your assets in a valid decentralized protocol that is likely to be more profitable than your bank account, thus increasing your trading income.
In addition, in digital currency transactions with digital currency, you have the option to deposit or withdraw your assets seamlessly to or from the defy protocols in order to maximize profits. Centralized exchanges that convert cash into digital currency usually do not offer such tools.
Also read: The most comprehensive Defy training; From garlic to onions, decentralized platforms
Disadvantages of digital currency transactions with digital currency
Digital currency transactions with digital currency, despite all their advantages and profitability, also have disadvantages. The following are some of the disadvantages of digital currency trading with digital currency:
- This form of trading is only suitable for professional investors
- Some decentralized exchanges and protocols are vulnerable to security due to technical problems and users’ funds are subject to theft.
- You always need a tool to do the job of converting digital currency to cash for you
Unfortunately, trading digital currency with digital currency is the job of experienced traders. If you are unfamiliar with managing and maintaining digital currencies and how to use smart contracts, you may run into problems in the world of defa.
Although the way users’ capital is stored in decentralized exchanges is more secure than centralized exchanges, the security problems and vulnerabilities of decentralized exchanges pose a serious risk to digital currency traders. Therefore, it is recommended that you use only valid and long-standing decentralized protocols.
Finally, you still need a tool to convert digital currency into cash to cash in on your assets. So you can not keep your capital in digital currency forever, unless one day all banks, stores and even government agencies accept the use of digital currencies as a method of payment.
Also read: The rules of being a Hoodler; Are you a Hoodler?
Buying and selling digital currencies with cash is a method that is more suitable for novice traders and long-term investors (hoodlers). So if you want to buy some bitcoin or Ethereum and keep it for a long time, converting cash to digital currency makes sense.
On the other hand, if you are looking for market fluctuations, using strategies to increase efficiency in defense protocols and taking advantage of trading opportunities in the Altcoin market, trading digital currency with digital currency is a better option for you because of its speed and flexibility.