Trading VS investing: pros & cons you should know

[Bitcasino.io Support]

Hi, crypto fans

Still at the crossroads of picking between trading vs investing in cryptocurrency?

Consider the pros and cons of investing in cryptocurrency and trading, as well as your profit goals to find the right option for you.
Here's an overview for you.

Trading vs investing crypto side by side

Although investing and trading in crypto appear the same, they work in distinct ways. Investing is buying an asset and holding onto it until its value appreciates over time while trading involves buying and selling coins to profit over movements in the market. Learn more about these two when we compare them side by side below:

Pros and cons of investing in cryptocurrency

Investing in cryptocurrency is fit for long-term investors who can wait years to profit from their assets. This involves buying a crypto asset like Bitcoin (BTC) and Ether (ETH) and waiting for its value to increase over time.

Most crypto investors tend to do the ‘HODL’ strategy which is a slang term that means ‘hold on for dear life’ onto their assets no matter if the price drops. Rather than being swayed by volatile price changes in the crypto market, these types of investors choose to hold onto their coins and wait for the right time to sell them. Know more about the pros and cons of investing in cryptocurrency below so you can choose if this is the best option for you. Here’s all you need to know:

Pros

* This can be done passively
Investing in cryptocurrency can be done during your spare time without having to be fully active on the market. All you have to do is buy a performing crypto asset and see how its prices move within the next few months or years.

* Suited for long term goals
Investing focuses on long-term profit or gains that are often bigger compared to trading. Price drops don’t concern investors for long term investments in cryptocurrency since they look at the trends in the long run and know that prices can rise again in the future.

Cons

* Results take longer to earn
Like most investments, cryptocurrencies also don't pay out overnight and it can be difficult to predict when with the market’s volatility. Along the way, you might be faced with doubt or impatience of profiting immediately. However, if you keep track of your assets’ performance through market predictions by experts and look at things from a long-term perspective, you can potentially gain substantial amounts from your investment.

* It has a higher risk
The crypto market is known for being highly volatile and therefore, risky. And while the famous saying goes ‘high risk equals high returns’, this also means the possibility of losing big money. Additionally, your investment can still result in zero return no matter how long you wait for it to appreciate if it’s not doing well in the market. So, make sure to choose your investments wisely. All you can do is try to protect your crypto from market volatility as best you can by being open-minded, cautious and knowledgeable of the pros and cons of investing in cryptocurrency.

Pros and cons of cryptocurrency trading

Crypto trading involves buying and selling coins to profit by predicting the price trends using a CFD (contract for differences) trading account. Opposite to investing, trading is more fit for short term profit goals since it allows you to earn through buying and selling coins within a few hours, days or weeks. Here are the pros and cons of cryptocurrency trading you should know:

Pros

* It works well with the market volatility
Crypto trading is rooted in the market’s volatility rather than investing in crypto that doesn’t heed to short-term price changes. This means that once prices go down, you can buy more crypto and profit by selling them later for a higher price when it appreciates. Rather than seeing price fluctuations as a bad thing, traders see this as an opportunity to gain in the near future.

* It is faster and more accessible
If you want instant profits in the crypto market, trading is the best option for you. This can easily be done by simply buying and selling tokens through various platforms like exchange sites. To make the most out of your assets, make sure you know all the different strategies, trends and analyses used in crypto trading.

Cons

* Should be active in the market
Since trading is aligned to the market’s volatility, you are expected to monitor the latest changes. Unlike investing where you can be passive, you have to always be active when trading so you can enter and exit the market whenever necessary. If you don’t stay alert on certain market trends, you might miss the opportunity to profit or suffer great losses when prices drop. Bitcoin trading bots, however, can help you by aggregating all of this information and help you make the most informed trading decisions.

* Smaller returns for each trade
Although you can get faster returns in crypto trading, they usually come at smaller prices. Since price drops happen minimally especially for lesser-known coins, the profit you can get from buying and selling multiple currencies will also be small.

* It requires more knowledge on crypto
Compared to investing where you can buy and leave your assets alone, trading requires you to brush up on your knowledge about crypto to profit from it. You need to be updated about the recent happenings in the market especially those that can affect the asset’s prices and understand how the entire system works for you to make substantial profits from crypto trading.

Is there a risk in cryptocurrency?

Like all kinds of investments, there is a certain level of risk as well as pros and cons in cryptocurrency you should keep in mind. This includes the high market volatility, which means prices tend to rise and fall.

Another thing to be wary of is the safety of your assets. Crypto’s core tech such as blockchain and cryptography secures your assets, however, other financial platforms that make investing and trading possible may not be as safe. This includes popular cryptocurrency sites used in trading that are often centralised and operate online, which means they can be a target for internet threats like hacking and malware.

Investing apps such as wallets where you choose to store your coins also pose their own risks such as hacks and getting lost. Ensure that you secure your Bitcoin wallet by keeping your password safe and using 2-step verification.

So despite its built-in security features, there are risks in cryptocurrency that users like you should be wary of. Do your own research on the steps you can take to improve the safety of your coins. Consider all the pros and cons of cryptocurrency when deciding because, at the end of the day, your assets are only as secure as you make them.

Into the realm of crypto: Where to get your crypto

Now that you know the pros and cons of investing in cryptocurrency, ready to step into the world of volatile markets? To help you get started in either trading or investing, find out where you can buy these coins first. Here are the three best platforms for beginners:

* Exchange sites
Big exchange sites like Coinbase and Binance allow traders and investors to buy and sell coins in one place. It acts as the intermediary that facilitates transactions between two parties (buyer and seller).

To make an exchange, all you have to do is create an account on your chosen platform and begin trading or investing. You can instantly get any of the well-known coins like BTC and ETH using your fiat money or other cryptocurrencies.

* Peer-to-peer marketplaces
If you want to directly buy and sell your crypto assets with another person, you can use Peer-to-Peer (P2P) marketplaces. These sites allow you to contact any interested party for the transaction. Additionally, the prices of the coins are usually determined by the seller. Some examples of P2P marketplaces you can consider are Paxful, Bisq and Localbitcoins.

* Payment apps
You can also buy crypto from payment apps like PayPal and Robinhood. These apps make crypto available to their userbase so they can easily buy crypto on-demand without finding a seller.

 
Thanks for reading and hopefully it was useful.

Cheers,
Karl from Bitcasino

 
Source: Bitcasino blog

[Charles-Tim]

* Results take longer to earn

If someone do not have strong wings, it would be best for the person to just work and go easy. Some people do not know how to trade, some people trade and lose easily, but bitcoin investment is still more guaranteed for profit, I do not know about shitcoins which should be seen as gambling, although some altcoins are good too but many are shitcoins, that is why I prefer bitcoin when it comes to crypto investment.

* It has a higher risk

If there are risks, then the person is trading or not patient enough, if someone can hold bitcoin for 5 or more years, it has never failed in the past, it all resulted to profit for such long term holders, but some people will sell their bitcoin holding when the price is falling, but people that just do not worry but expecting the price to rise all make profit from it.

[jackg]

Being aware of what the market has done in the past (in depth) also makes holding less risky as you're less likely to just cut your losses/give up.

I'd also advise against trading bots as I'm not sure they're any good and seem quite expensive - unless you can text your strategy works before leaving it to run.

[tranthidung]

* Peer-to-peer marketplaces
If you want to directly buy and sell your crypto assets with another person, you can use Peer-to-Peer (P2P) marketplaces. These sites allow you to contact any interested party for the transaction. Additionally, the prices of the coins are usually determined by the seller. Some examples of P2P marketplaces you can consider are Paxful, Bisq and Localbitcoins.

On Paxful, something newbie traders need to know.

• Avoid offers that are "Too good to be true". Such offers are mostly come from scammers.
• Avoid traders who only have one-sided trading history such as using fiat to buy Bitcoin. Fiat resource might come from illegal activities, money laundering.
• Narrow down your filter to trusted trade partners: Ambassador, Associate, Corporate account, Expert trader, Power trader, Peer. Customize it in the User type of the filter
• If you don't want to spend time with filter like above, simply Turn on Trusted offer only at the top of offer list. From the list of Trusted offer, narrow it down by choosing trade partners who have big number of past trades.

[dansus021]

good article but for me everything having risk

i think the simple answer if you have enough time i will take the trading if you dont i will take the investing 

[sheenshane]

Pros and cons of investing in cryptocurrency
.....
Cons
* It has a higher risk

I don't think there's a risk in investing if the investors know the concept about the Bitcoin price.  Once an investor becomes a panic seller when there's a FUD comes, the risk was there but if the investor knows how Bitcoin works and knows that investing in the long term will really give profit, I don't think there's a risk on it.

In crypto space, RISK and VOLATILITY are the main factors that we consider most especially in trading.  There's a lot of things that we must be monitored before we can say that it's easy to gain money on crypto but knowing the fact that Bitcoin itself didn't give promises on USD regarding profit, it's financial freedom.

[Oshosondy]

good article but for me everything having risk

i think the simple answer if you have enough time i will take the trading if you dont i will take the investing 

The risks are more in trading than investing, trading is also time consuming, the most frustrating and depressing thing about trading is that you will devote your time, energy and money just because you want to gain, but most traders will later lose, this has been the reason yj do not like trading when it took all of my yearly earning away after all the time and money I used. If I had invested, I would be having enoghoney now, investing is not risky like people are saying, someone can just wait and be patient and invest at the appropriate time without any panic of checking the market price always.

[TheNineClub]

at the end of the day, it takes a different kind of person to trade than to invest. Investing can be, in a way, done by anyone, and trading, as we can witness, is not something any person can do. I am saying this because there needs to be more education for newbies regarding trading and they should not go all in before they gain some experience.

[dansus021]

The risks are more in trading than investing, trading is also time consuming, the most frustrating and depressing thing about trading is that you will devote your time, energy and money just because you want to gain, but most traders will later lose, this has been the reason yj do not like trading when it took all of my yearly earning away after all the time and money I used. If I had invested, I would be having enoghoney now, investing is not risky like people are saying, someone can just wait and be patient and invest at the appropriate time without any panic of checking the market price always.

yes when i answering this i just loss 50$ that i have earned for 3 days and gone for no matter of minutes 

Greedy, is my main problem right now and money management 

investing is also risky if you just buy without see the price like you buy stock at highest peak it could be dangerous

[Oshosondy]

yes when i answering this i just loss 50$ that i have earned for 3 days and gone for no matter of minutes 

Greedy, is my main problem right now and money management 

investing is also risky if you just buy without see the price like you buy stock at highest peak it could be dangerous

The last time I lost in traing, I gained over $500 for like 3 to 4 weeks, but lost $300 in just a day, that makes me to think differently about trading. If I hold the bitcoin, I would have gained more than $500.

Greed is a very difficult thing to handle while trading, some people would have lost all their money before they will realise their greediness and be blaming themselves, risk and money management are very important for traders to be able to trade with the amount of money that will not affect them.


The investing I am talking about is bitcoin holding and no others, if you invest in bitcoin, the risk is not much at all, it is not risky like trading.

[pawanjain]

I personally think that trading has a higher risk than investment. Investment are generally done for a long term.
Long term investments mostly give profits and so it has lesser risk of losing money.
Trading on the other hand is for short term and if not done correctly then it can lead to a loss and hence higher risk of losing money.
Many of my trades have lead me to a loss but all of my investments have given me good profits.

[Rengga Jati]

Investing will be good enough and less risky if we know the fundamentals of coins that are strong enough, the team, and also their use. And about Bitcoin itself, we have known the worth of Bitcoin investment, moreover for a long-term hold. That is very worthy. Put our money there, let it be, and then several years will be multiple times for Bitcoin price. This has been proven.

However, for altcoins. we must be very careful in investing, if we don't know the right coins to invest in for a long-term period, it will give high risks. We know how the coins in 2017 seemed to be very promising, but the value decreased and decreased even after 5 years, and they are likely trash coins. That is why be selective altcoins for long-term investment.

And trading, yeah this also takes high risks, moreover for newbies, trading maybe like gambling.
but at least, if we are trading in the spot market, it will be less risky than in the future or margin.

Just do what we really understand, just do what is suitable for us (including the time, funds, risk management, knowledge, and also readiness for every risk.)

We can also do both if we are able to do.

[boyptc]

good article but for me everything having risk

i think the simple answer if you have enough time i will take the trading if you dont i will take the investing 

Everything that has the potential to gain profits has a risk. Both investing and trading have it.

But I'll choose what's best for me, whether there are lesser cons or pros, I'll be focusing more on investing. I'm free to move any time I want being an investor.

[GreatArkansas]

good article but for me everything having risk

i think the simple answer if you have enough time i will take the trading if you dont i will take the investing 

Trading and investing require both time and effort.
When you do invest, you also study and research there, you just do not buy random coins and hold them for the long term, same goes with trading right, you need first to study the basics of trading.

The "enough time" for me here is not the time only you are watching closely to the chart, some traders are also using high timeframe when they are trading, some of them don't always monitoring the chart, once they have already a plan, open a position, set stop loss, set target price then they are good to go.

[Wexnident]

Honestly, I'd choose to invest over trading anytime, especially if you aren't prepared to spend hundreds of hours learning how the market works, possibly together with losing hundreds to thousands depending on your budget just to understand how to break even for each day. If I were to be asked is it worth the investment, it definitely is if you continue doing so but if you were to ever stop midway, it's really not worth it since you basically lost a lot for nothing.

* Peer-to-peer marketplaces
If you want to directly buy and sell your crypto assets with another person, you can use Peer-to-Peer (P2P) marketplaces. These sites allow you to contact any interested party for the transaction. Additionally, the prices of the coins are usually determined by the seller. Some examples of P2P marketplaces you can consider are Paxful, Bisq and Localbitcoins.

I'd generally avoid p2p marketplaces when you're still starting out. Centralized exchanges may be much more strict on KYC, but it's a lot safer and has a lot more room for errors compared to p2p imo. It's beginner-friendly so to speak.

[zanezane]

at the end of the day, it takes a different kind of person to trade than to invest. Investing can be, in a way, done by anyone, and trading, as we can witness, is not something any person can do. I am saying this because there needs to be more education for newbies regarding trading and they should not go all in before they gain some experience.

So in your conclusion, it's a matter of who are we talking about because no same people have a verisimilitude characteristics and behavior, there's always and will be a minute difference albeit some will be invisible to the eye. For me, they first need to learn all the basics of trading before jumping right into it, it's like going to war without knowing how to use a gun.

[elisabetheva]

at the end of the day, it takes a different kind of person to trade than to invest. Investing can be, in a way, done by anyone, and trading, as we can witness, is not something any person can do. I am saying this because there needs to be more education for newbies regarding trading and they should not go all in before they gain some experience.

it takes enough time for someone to really want to trade, because it's not just a will, it takes enough analysis and experience when you want to do it and it's not that easy to do everything. because without the experience that has been done so far, you will be able to experience losses, but not with investment because it is enough to buy the best coins such as bitcoin and ethereum, it can be ascertained that time it will produce an increase.

So in your conclusion, it's a matter of who are we talking about because no same people have a verisimilitude characteristics and behavior, there's always and will be a minute difference albeit some will be invisible to the eye. For me, they first need to learn all the basics of trading before jumping right into it, it's like going to war without knowing how to use a gun.

I agree that everyone has different characteristics and indeed that is a gift given to everyone. learn the basics and analysis of course as a beginner you have to do that, the main thing is obviously never to do anything that quickly panics and must still be patient so that you can control what will be done later. because in true trading it is very complex and all ultimately depends on the patience of the trader.

[Strongkored]

* It requires more knowledge on crypto
Compared to investing where you can buy and leave your assets alone, trading requires you to brush up on your knowledge about crypto to profit from it. You need to be updated about the recent happenings in the market especially those that can affect the asset’s prices and understand how the entire system works for you to make substantial profits from crypto trading.

Actually, when prefer to invest over trading, you still need knowledge because investing is not just buying and then save it for a long time while waiting for prices to rise, because in the crypto world no one will know what will happen tomorrow, a week, a month or a year ahead, so as a investors must keep updating their knowledge about the crypto that we choose as an investment, the only advantage is that we don't do it like a trader when there is bad or good news can cause panic both buying and selling, an investor is calmer than a trader because traders do it in a relatively shorter and faster time, trader will always take profit in every opportunity.

[Ararbermas]

Yes i agree that both were almost the same wherein we buy and hold until we get the value that what we want from it, and the risk also.. But for me its a good idea to have such options where people can choose the way  for them is fine, i mean some can do it full time in trading and part-time for investment.. Indeed it doesn't matter at least you have enough knowledge how to handle such way it's totally fine and worth it especially when it comes crypto..

[Japinat]

In terms of risk, I think I will measure it the same.

Long term and short term trading both have a risk, and as a trader or investor, you should have a different way to treat it.
Short term trading normally is good for people who consistently monitor the market as it requires instant decision making since the market is very volatile and it could change significantly in just minutes, hours or days. Everyone surely have their own strategy, but we only differs in our approach or implementation in trading.