Investing in cryptocurrencies the easy way

Investing in cryptocurrencies the easy way

For those approaching the world of online investing, cryptocurrencies are one of the first choices, both because they are easily accessible and because they have gained enormous popularity in recent years.

As everyone knows, cryptocurrencies are no longer limited to Bitcoin alone, which is still the most famous and important virtual currency on the market, but there are thousands of cryptocurrencies that allow us to invest in very different fields.

There are many stories of people who manage to make good money through cryptocurrencies, but how do they do it?

Of the various possible systems, one of the safest and most immediate is arbitrage.

What is arbitrage?

One only has to look at the various exchange sites for cryptocurrencies to immediately notice one very important thing: the value of a cryptocurrency is not fixed everywhere, but can vary from one site to another.

This, if we think about it, also happens in the real world with physical products: a packet of rice of the same brand can have two different pieces in two different supermarkets.

Obviously, in the real world, it is not possible to buy rice in a store that offers it at a lower price and resell it, at a higher price, in the second store.

For various reasons, first of all, the legal ones, it is not possible to do so, but for crypto coins, it is not.

It will then be possible to buy from one exchange platform at a cheaper price and then resell the same currency on a second platform at a higher price, simply earning from the price difference.

Said in this way, this technique appears incredibly simple and risk-free: sure, the system behind it is very intuitive and allows one to perform these actions even without an in-depth knowledge of the market, but it is still not without risk.

Here are the main ones:

In the example given earlier, we compared cryptocurrency to a parcel of rice, and exchange sites to two supermarkets.

This is not the case: the parcel of rice will have a different price between the two shops, but the price in question will be fixed over time. On the other hand, the value of a cryptocurrency is never stable but constantly changing.

For this reason, as little time as possible should pass between purchase and sale, as there is a risk that the currency will lose value in that time interval, causing us to make a loss!

Another important fact is the commission that is paid to exchange websites for buying and selling actions: this commission must be calculated carefully as it will affect our final net profit.

Another factor to consider is not a risk factor, but it is still something to take into account to optimize our earnings: there are dozens, or hundreds, of online platforms for exchanging cryptocurrencies, each with slightly different prices.

To optimize our earnings, it will be necessary to buy where prices are lower and resell where they are higher.

All these operations (price comparisons, commission calculations, and, above all, very fast buying and selling actions) are extremely difficult to perform manually and it is, therefore, better to rely on online arbitrage software, which helps and facilitates the various operations and reduces risks.