Difference Between Crypto Investing & Crypto Trading

view original post

What is crypto?

Cryptos are basically a decentralised network that steers away from the traditional form of investing i.e. the authoritative banking system. It involves blockchain technology to allow complete transparency. Crypto assets are typically traded between two parties without the involvement of a third party.

What is crypto investment?

Investment is the process of using money, gold, or other valuable commodities to gain profit or make more money from them. Over the years, crypto too has paved its way to the portfolio of ardent investors.

What is crypto trading?

Crypto trading in general is not much different than crypto investing. While there are long-term strategies that an investor can experiment with, crypto trading inclines more towards the shorter or quicker route.

So what is the difference between crypto trading & investing in crypto?

Crypto investing is the act of buying and holding crypto assets to derive higher appreciation in the future. The assets are held over longer tenures and the dip or rise in the current market value is usually not regarded. On the other hand, crypto trading involves a short-term strategy. It seeks refuge in the volatility of the crypto market to make the best of price fluctuations. Crypto trading, unlike crypto investing, demands more effort and stands to generate overnight profitability.

Now that you know better about crypto investing and trading, you must understand that both techniques can be used from time to time. The strategies are intertwined but employ different routes to increase your investment value. The strategy that you pick completely depends upon your financial goals.