Back in 2017 or there about, bitcoin made an entrance into the Nigerian financial market. This newspaper warned Nigerians about getting into the business of trading bitcoin because it was being promoted both on radio and television as a get rich quick scheme with no risk by people who did not understand the intricacies of complex financial instruments. Both the Central Bank of Nigeria and the Securities and Exchange Commission perceive the same danger and eventually banned the promotion of trading of the emerging currency in the media. Before the ban, many lost money not just to the volatilities and vagaries of cryptos but also to the antics of unscrupulous people who claimed they were trading on behalf of others.
The crypto world is here to stay
Today, bitcoin sits on the apex of the cryptocurrency world That world is expanding rapidly at the moment with new currencies added almost every month. World governments are also scrambling to regulate operators and protect investors from scammers. Before now, investors were on their own. To a large extent investors are still on their own as government officials around the world struggle to understand how the crypto world which is 100% virtual can be integrated into the real world and how to hold accountable those who are determined to scam others or use the system to launder funds. Just last week the Nigerian Security and Exchange Commission released guidelines that will help build the market here in Nigeria and regulate operators.
Already, the widening acceptance of cryptos as a means of exchange and store of value by millions has engendered a “forced” form of integration with fiat money. Now, you can convert almost any crypto currency into your local currency and vice versa.
Should you trade cryptos?
The short answer is yes. The blockchain technology is here to stay, so are the cryptos it is giving birth to. At the moment there are over 2000 cryptos with a current market capitalization of over $323b and still counting. There is money on the table to be made on a daily basis. A big chunk of that money is picked up by the Chinese who have become the warrior merchants of cryptos. The wild fire is spreading across all continents as more and more people are taking a dive into the ocean of cryptos.
The long answer to the question raised above is yes but beware. Not all cryptos are here to stay. Some have come and evaporated quickly, taking investors funds irretrievably down the abyss where angels of darkness dwell.
The ICO market
The most tempting and dangerous are initial coin offerings (ICOs) which enter the market at a very low price and begin a dizzying upward trend, gaining 100%, 200% and sometimes 1000% in one day or over a few days. Some greedy investors throw everything they have into the game, hoping to become millionaires overnight. Some do. However, others fall over landmines and go into collosal loss induced coma.
The Secondary Market.
This is where daily trading of tested cryptos take place. Most trading is done in the basis of technical analysis and market or traders sentiments. The beauty of the secondary market is that you can make money whether prices are on an upward or downward swing. You can also make money when the market consolidates or swings sideways, that is without making a remarkable upward or downward swing. It is all about your strategies and the trading tools available to you on the trading exchange you are hooked up to.
First, you must train.
Before you jump into the stormy waters of cryptos, you must take your time to train, understand how the market works and develop a trading psychology. Once done, you can begin social or copy trading. This enables you to test the waters by copying and amending the trades of others who are much better than you. Thereafter, you are certified to go to the war front by yourself.
A universal caveat
Dont be greedy. Trade with caution and only with money you can afford to lose. Follow your trade attentively. A good trade can become bad if not attended to when the market does a dramatic turn Cut your loss and close a trade that isn’t going as planned. Don’t leave any profit on the table. Once a trade starts making profit, begin the withdrawal of your capital and profit.
A final note.
The most alluring thing about trading digital currencies is that you are your own boss. Besides, you don’t have to step out of your house to do your thing. You set your own time table and if you do well, you can have a lot of time on your hand to do other things that are important to you. You can make money wearing your pyjamas. No commute, no I beg to apply, no nasty office politics, To that you can now add, pandemic or no pandemic.