I am new to this site and i am new to the world of crypto's. I am not new to the trading/investing world. I am hoping my almost 20 years of experience will translate well to this entirely new investment tool. Well, relatively new, and new to me. The more I learn through my research, I have several questions that I keep coming back to that concerns me about this crypto craze. And these are going to be all over the place, so i apologize...but it all comes down to how to best profit from crypto's.
First, i hate being a bandwagoner. I am also more of a contrarian by nature and early to switch sides between bearish and bullish. So while i knew of bitcoin when i was first made public in 2009, i didn't pay much attention to it...fast forward to now, and while i resisted the urge to investigate because its all anyone talks about now...i couldn't resist. The more I do learn about these...from a purely trading aspect...to a macroeconomic standpoint...the entire umbrella...i cant help but be excited. I recall one quote as saying crypto's could be 'the 4th industrial revolution' ... i do think it has massive potential to change the economic system as we know it.
As a long term investment tool...i believe these are here to stay in some form or fashion. I cant imagine that they wont start to become highly regulated like other financial markets as its popularity grows, but they are most likely not going away. As far as short term price direction...i have no opinion. I can read what the charts tell me...but i do not know the crypto world like i do futures market or equity markets. So, for the point of this post...I am not interested nor do i have an opinion on short term price direction. I am simply thinking out loud here and maybe a few more knowledgeable souls can share some of their knowledge.
* Why would anyone accept bitcoins as a form of payment. Lets pretend i am amazon. In theory, accepting BTC..ok i get it...its easier to send 'money'. But if i am amazon...why would i accept it when its volatility is still through the roof. I could accept 100 dollars worth of BTC for an order...but because of its volatility...tomorrow, it could be worth 75, or whatever. Likewise, on the buyers side....why would i pay for items with BTC knowing that tomorrow i could have essentially paid 150 for those items.
In order to gain popularity and mainstream acceptance, sure we have to have these sites that accept BTC as forms of payments...but i see it as kind of a catch 22. because again...why would you accept it as a form of payment when the value fluctuates so drastically. You don't have to worry about that with the USD. that 100 today is worth 100 tomorrow, plus or minus a few hundredths of a % point.
It seems like an insane risk for a company to accept these. Which leads me to my next question:
* I want to take advantage of what i see to be MASSIVE arbitrage potential between all of these cryptos. I have opened an account with binance (mainly because most days on coinmarketcap.com... that exchange has more volume than any other...and liquidity is absolutely paramount to any trading operation (duh). But in order to fund binance..it has to be in a crypto. Ok, that's fine...but what i am used to in trading...I do my trades during the day...scalping mostly. At night, i close my positions...my 'assets' are in USD and i don't have to worry about that value. Not so with crypto trading. I turn my USD into BTC on coinbase...move my BTC over to binance in order to trade. But at the end of the day, I do not have the option to turn that back into USD (at least on binance)...so i have to leave my 'money' in a currency like BTC... which i do not feel comfortable with seeing that it could fluctuate drastically overnight. For other experienced traders out there...what is your solution to this? Yes, I could get all fancy and hedge my 'cash' position...but i don't want to have to do all that for just some scalping/daytrading. I want to be able to enter in and out of the markets when I am able to sit here and watch, and rest easy at night knowing my positions are closed and my 'cash' is safe. Trading in the crypto world...i get the sense that its never really safe in terms of its value..because it is so volatile. my USD in trading account isn't going to be worth 10% less tomorrow morning....i don't have that same confidence in this world.
* And this is probably the most asked question/concern for newbies in this world...This whole wallet thing. and losing of coins. The margin for error is absolutely ZERO. I can move money easily back and forth from my checking account to trading account and anywhere else...and i am confident that my money will get from point A to point B.... It seems like if there is a glitch or a hiccup somewhere in the chain of moving cryptos...you are simply just out of luck. Granted, i am sure most of these horror stories result in their own error and mistake in the deposit/withdrawal/transfer process...but this isnt something i want to have to worry about. I want to focus on trading. On predicting the next short term move for the next 5, 10, 20, whatever mins. I dont want to have to take all of these extra precautions on my funding. Sure it sounds like laziness on my part...and probably is...but i am used to what i am used..the safety in USD....
Help me understand why I shouldnt be concerned about this. I have put just a few hundred dollars of play around money into coinbase and have started experimenting with the actual funding/buying/selling/etc process (like sending my coins to GDAX and back) ...just to gain the experience. But because this is new to me...I am very hesitant to put any real money into these accounts. I don't yet feel like my money is safe. I don't feel 100% confident that i can get that back into my hands when i want.
I have tons of more questions..but this post is already long enough..so if you're still here i appreciate it
I just recently discovered this forum, and I look forward to becoming a contributor and love being able to bounce ideas off one another. Thanks for reading.
also...are some of these coins shortable? i see the option for margin trading on some of these sites.... and with futures on CME....i would have to think that you could..at least on some of the more active coins.
