Crypto Trading vs Investing: Which Is More Profitable

The rapid growth of the crypto market only took a decade to potentially compete with the stock market. stock trading is different from cryptocurrency trading, an initial investment is necessary to comply with the regulated industry mostly backed by fiat currencies. While crypto is a decentralized network using blockchain and is not controlled by any central authority.

However, both have something in common, they are used primarily in order to generate wealth by investors or traders. These financial ventures are always partnered with calculated risks that can lose money.

Difference trading and investing

The difference between trading and investing can be attributed to their methodologies on how to handle the risk involved. The difference can be a short-term or long-term way of making profits. Trading is usually taking advantage of price spikes and dips which can have frequent profit returns than investing which relies on long-term buy-and-hold strategies.

Overview of trading

When you start trading in the stock market, there are risks involved which could potentially cause losing money for traders. There are trading methods and terms which you might need to familiarize yourself with, for example, momentum trading, swing trading, margin trading, stock trading, and crypto trading.

Traders can have more profit on crypto trading than stocks trading because of high volatility swings. There are several trading services with lower price fees per transaction when you start trading. Trading stocks can be taken advantage of by momentum traders who ride the wave of good price trends.

How crypto trading works

Due to the high volatility of cryptocurrencies, crypto trading is becoming more profitable. As a result, more trading platforms are available to trade cryptocurrencies. When you first start crypto trading, you will need to create a CFD trading account for the traditional exchanges platform online.

Investors will need to observe coin’s price movements in the crypto market taking advantage of the short-term price movements. Then, they need to do proper judgments from the current price trends before making a decision for their investment.

Cryptocurrency trading involves risks that prevent many investors from participating in the cryptocurrency market. The best strategy trading guide is needed to manage the risks and perform appropriate short-term trades.

Overview of crypto investing

Since crypto investing is an unregulated industry unlike traditional finance which uses fiat currencies, the selling price of digital assets initially invested can be more volatile. For example with the rise of Bitcoin price can have a strong influence on other cryptocurrencies and more profits can be gained if the price spikes higher than its initial investment.

However, it can also cause a huge loss for the crypto investor if the price dips lower than its initial investment.

To reduce the risk of losing money, you can use systems for automatic trading, such as bitcoin evolution. We recommed reading bitcoin evolution reviews.

How crypto investing works

If you’re new to crypto investing and how it works, it is natural to feel burned if you never invested money in any coin before. There are essential steps you need to know before you make a sound plan for your cryptocurrency investing career.

You need to create an account on crypto exchange platforms such as eToro, Binance, and the likes. Then, before making an initial investment, there are platforms that teach you the basics of how crypto investing works with their demo account.

There are do’s and don’ts that you need to remember such as, making the right research and planning about the prospected coin. Don’t invest your budgeted investment with your emotions but rely on sound strategy learned from experts, you also need to monitor the crypto’s performance.

Key Differences: Trading and Investing

The fundamental differences between trading and investing are in their time of selling and buying methodology. Trading gains more profit in the short-term while investing gets huge profits in the long term.

However, both methods of investing and trading have underlying risks that need to be addressed in order to avoid bankruptcy. There are advantages of trading vs investing, for example, traders can employ strategies such as swing trading, trend following, and day trading.

Price appreciation is how traders make money, especially with crypto as it provides high volatility swings. In contrast with investors where they have a low trade frequency and long-term HODL is essential.

Between trading vs investing, both have something in common which is to make a profit out of the money invested in cryptocurrency. Furthermore, research is necessary in order to make a good trading and investment decision. The Topcoins provides news about the latest updates in crypto trading and investing in Australia.


Before making crypto trades or investments, you can further plan the market conditions with your own research. Demo accounts from trading or exchange platforms can also help assess your trading and investment capability. Knowing more about your weaknesses and limits are an essential part of your progress which can affect your portfolio diversification process.

Choosing the right cryptocurrency to trade and invest with is the key to high return of investment. The most popular and promising crypto to invest with is Bitcoin, as it is supported by many institutional investors.

When to trade

Before making a trade in the cryptocurrency market, you need to create a vital technical analysis. In crypto trading, the right timing is essential, and knowing the difference between short-term volatility vs bear market is an essential skill that differentiates successful traders from losers.

However, these trading ventures are always partnered with calculated risks that can potentially lose investors money. Bitcoin and most cryptocurrencies are volatile, crypto prices can fluctuate multiple times. For instance, day traders can take profit of the current BTC Price AUD which can change from 60-70k AUD within a day.

Trade only when you have done your due diligence and have mastered the necessary skills such as deciding to buy at the right time when prices go south and sell when the price is high enough to make profits. You also need to know how to manage the risks associated with trading such as credit, legal, liquidity, and operational risk.

When to invest

There are necessary steps needed for cryptocurrency investing before making an investment in the cryptocurrency market. Invest only when you have done your technical analysis, budget, and due diligence. Aside from that, buying crypto when it’s in a bear market is essential to make a huge margin of profits vs investing when the coin is in the momentum of a bull market.

Aside from that, learning from the independent financial advice of expert investors and searching for what crypto they invest in is also a good idea. These experts have already done their hard work on due diligence and other vital market research needed in order for them to come up with sound decisions.

Crypto coin vs Token

There is a difference between crypto coin vs token that you need to know before trading or investing. A crypto coin is a native asset of a blockchain whereas a token is built on top of that blockchain which is created by other platforms.

For example, a coin such as Ether is the native cryptocurrency of Ethereum blockchain while tokens such as DAI, COMP, LINK, and CryptoKitties are built on top of the Ethereum blockchain. These tokens are created by different companies or organizations using the Ethereum blockchain.

Which is the best cryptocurrency for trading and investing

Blockchain technology has made several impacts in the finance industry especially in the recent years led by Bitcoin. Bitcoin’s price has been dominant for many years and large profits have been gained by many early investors. Due to its high volatility swings, it presented huge market opportunities to traders and investors.

However, the BTC blockchain also created many rivals called Altcoins. The rivalry between altcoins vs Bitcoin created more than four thousand cryptocurrencies in the process. Which of these cryptos is the best cryptocurrency for trading and investing? These digital assets also present favorable cryptocurrency prices that are worth investing in.

The future price of these valuable assets has the potential to withstand a downward trend for even decades to come which made them popular from crypto exchanges and belongs to top 5 cryptocurrency.

Final Thoughts

Sometimes, it makes us wonder how this innovation created by an anonymous programmer made a significant contribution to the finance market, opening a new era of the cryptocurrency trading and investing market.

Cryptocurrency trading vs investing can achieve more profits in different ways and with more profit comes with more risk involved as volatility swings can sometimes be unpredictable to the pros and a bit of investment advice is necessary for amateurs before starting to trade or invest.

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