Investing vs. Trading Cryptocurrency: What is the Difference

Investing and trading are two distinct approaches to cryptocurrency. Both can be profitable, but they require different skills and mindsets. Investing in cryptocurrency means buying a long-term stake in a coin, with the expectation that its value will rise over time. Investors aim to hold onto their coins for at least several months, or even several years, to give them time to appreciate in value. Cryptocurrency investment can be a good way to diversify a portfolio and benefit from the long-term growth potential of the digital currency market.

Crypto currency trading, on the other hand, involves buying and selling coins on a short-term basis in an effort to take advantage of price swings in the market. Crypto trading requires a more hands-on approach than investing and often involves making quick decisions based on real-time market data. Traders typically hold onto coins for only a few hours, or sometimes even just a few minutes, before selling them for a profit.

Crypto Trading Styles

Both investing and trading have their advantages and disadvantages. Investing in cryptocurrency can be a low-risk, long-term strategy, but it also means tying up funds for an extended period of time. Trading can be more dynamic and potentially more profitable, but it also involves more risk. Traders use these styles depending on the lengths between buying and selling coins:

• Scalping - intensive trading that may last from 2 to 15 minutes
• Intraday trading - trades that open and close within one day
• Swing - taking advantage of crypto market swings within several weeks.

When it comes to cryptocurrency, it is important to carefully consider your goals and risk tolerance before deciding whether to invest or trade. Whether you are an experienced trader or a long-term investor, it is important to stay informed about the market and the coins you are interested in.

In conclusion, investing in cryptocurrency and trading each has its unique benefits and drawbacks. It is up to individual investors and traders to determine which approach is best for them based on their financial goals and risk tolerance. Ultimately, the most important factor for success in the cryptocurrency market is having a well-informed and disciplined approach. To find your trading methodology, you may practice demo trading on the WhiteBIT demo account. It will help you learn the strategies and understand what your trading style is. Besides, when using a demo account, you can quickly learn to navigate the WhiteBIT tools and interface, wich will be useful to you when you trade on real markets.