The cryptocurrency market has been bustling in recent years. With a rapid development speed, the cryptocurrency sector creates many opportunities as well as many challenges for investors. So what is the crypto market? What to keep in mind when entering the market? All will be deciphered through the following article.
I. What is the crypto market?
The cryptocurrency market is an important component of the blockchain ecosystem. This is the environment where the cryptocurrency exchange takes place.
For mining groups, after successful crypto mining, they will announce the number of coins they own to the market. As for investors who do not directly mine, they will trade cryptocurrencies on crypto exchanges.
The crypto market is a place to trade cryptocurrencies – Image: u.today
While the cryptocurrency market is fundamentally comparable to the traditional financial market in many ways, there are also some significant differences. For example, crypto markets have prominent features such as non-stop trading, but they lack regulatory oversight, etc.
Learn more about crypto here.
II. What is Cryptocurrency Market Cap?
Crypto market capitalization is the total value of a cryptocurrency. In simple terms, the stock market capitalization is calculated by multiplying the share price by the number of shares outstanding.
So the cryptocurrency market cap is calculated by multiplying the cryptocurrency price by the number of coins in circulation.
Cryptocurrencies with large market caps typically represent a more stable investment. And conversely, small caps are often more sensitive to overall market sentiment.
Learn about Crypto Market Cap – Image: academy.moralis.io
III. Things to keep in mind when participating in the cryptocurrency market
1. Enhance knowledge
The cryptocurrency market is a risky playground and it is not suitable for those who do not understand the market. The first and most important thing before entering the market is to equip yourself with knowledge.
- Constantly updating news, and market trends
- Focus on learning about a project that you want to invest in. You can read the whitepaper of the project for more detailed information about it
- Join reputable online communities where crypto enthusiasts and investors exchange news every day
2. Have an investment strategy
An investment strategy is a must-have for an investor. Depending on the amount of initial capital, risk tolerance and many other factors, each person’s investment strategy in the market may vary.
For example, many people prefer to trade daily to ensure quick profits without considering the broad market. Besides, others prefer the long game. So they will hold the asset for months or years before taking profits.
Short-term and long-term investment strategies – Image: academy.moralis.io
3. Beware of scams
Scams are common and they are mostly aimed at less experienced investors. To recognize and avoid scams, investors need to have a broad understanding of the cryptocurrency market and be aware of the following common scams:
- Websites, and apps that fake or mimic the original
- Email Scams: Calling to invest or asking you to reset your password on a certain platform so they can steal your account
- Sending a direct message: This is a fairly common form. Scammers can pretend to be famous, influential people in the community to support users with a certain problem, …
Conclusion
Thus, the above is the basic information about the concept of the “crypto market” as well as things to note when participating in the market. In reality, of course, knowledge of what surrounds the cryptocurrency market is vast. Investors need to continuously research to improve their knowledge and experience, always have a strong market mentality, and not follow the crowd. And lastly, don’t forget patience is the key to success in this market!
