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What is Cryptocurrency Trading?

Updated: Apr 4

Ever since 2017, cryptocurrency trading has been an area of interest for new and old investors alike. Notably, cryptocurrency trading involves speculating on future price movements within the market. In its simplest form, trading requires the buying and selling of cryptocurrencies in a manner that produces profit. In order to accomplish this task, you need to have a firm grasp on what cryptocurrencies are and what affects their market movements.


Cryptocurrencies are decentralized digital assets that rely on a network of computers to validate their authenticity and the overall state of the network. Unlike fiat currencies such as the dollar, there is no government or central authority backing these coins. Instead, cryptocurrencies rely on mathematical protocols to reduce human intervention and provide the world with a truly unique financial instrument.


Importantly, cryptocurrencies exist only as a shared digital record of ownership. This means you can’t handle or even touch a cryptocurrency. Instead, these assets exist only in the digital realm. Consequently, no crypto transaction is complete until it is verified by the network nodes (miners) and added to the blockchain.


Interestingly, there are multiple different types of blockchain assets one can trade today. Each asset has its own regulatory and trading requirements that you must adhere to. The three main types of blockchain assets in the market today are cryptocurrencies, utility, and security tokens.