The cryptocurrency market is red hot right now. Bitcoin is being taken more and more seriously, and the naysayers are fast turning into crypto investors. For those wanting to dive deeper into cryptocurrencies, trading Monero is an opportunity to do just that.
Monero has been a central figure in the cryptocurrency market for many years. It began trading in 2014 for about $2, and it reached its all-time high of around $475 in May 2021, which is an enormous leap by any standards (expect perhaps Bitcoin’s). As a potential investor, you may first want to know: what is Monero? What makes it different? What are its prospects? How and where can I trade Monero?
Monero is synonymous with privacy in the cryptocurrency world. Understanding Monero means understanding private blockchain ledgers and their pros and cons. Most cryptocurrencies, including Bitcoin and Ethereum, operate with a transparent public ledger. This means that anyone from anywhere in the world can view every transaction on the blockchain. There are some big positives about being transparent. It helps to prove the ledger’s integrity as a shared entity without any centralized input, gaining public trust. Transactions cannot be hidden, making the blockchain easy to audit and nearly impossible to modify or hack. Transparent blockchains have great potential to be used to gather votes for local and national elections. This was even put into practice via the Swiss blockchain company “Agora” during the Sierra Leone elections in 2018 and helped the government to show that the results were fair and accurate.
Monero recognized some downsides to having a transparent blockchain ledger and some positives about making transactions on the network private. One indisputable advantage about a private ledger is it runs much quicker, as the number of participants is smaller. Public ledgers are also much slower to adapt and scale because of their vast network of nodes required. Consensus algorithms are only possible on private blockchains, such as Istanbul BFT and Proof of Elapsed Time (PoET). Private ledgers use less energy which is currently a big problem for Bitcoin and other public blockchains.
The Crypto For Criminals?
Naturally, private ledgers mean complete anonymity for users who gave Monero its reputation as a cryptocurrency for criminals. To what extent that is true is not clear. It should be said that while the public key on public ledgers can be viewed, it is nearly impossible to connect the public key with the private key and reveal the sender’s or receiver’s identity. The problem for many with becoming more private is it necessitates the blockchain becoming more centralized too. As a result, Ripple’s private blockchain can be implemented by banks, such as Santander, to increase their transaction speeds. Monero is only centralized regarding its “mining” (approving transactions on the blockchain); it is yet to show any interest in working with banks. However, miners on the network are beginning to pool, meaning they may soon work together to control the entire network. There is no perfect solution at either end of the spectrum, and blockchain technology, both public or private, is evolving.
So, now you know about Monero, do you think this altcoin makes the cut for your trading portfolio? If you are ready to start trading Monero, there are many ways to profit from this promising digital currency. As with most forms of electronic cash, there are basically two ways to purchase tokens:
- Buy Monero coins directly through a cryptocurrency exchange;
- Trade Monero directly or indirectly through a traditional broker.
If you opt for the first option, the route to your first Monero is relatively short and sweet. It would be best if you found a suitable exchange. Bear in mind that the cryptocurrency market is unregulated and flooded with exchanges – and you should not trust all of them with your money. It is worth putting those extra minutes or even hours into researching and comparing cryptocurrency exchanges and finding one with the right features (24-hour customer support, user-friendly interface, etc.) You will need to verify your identity (passport, driving license, or an equivalent with your photo) to open an account. Once verified, you have to make your first deposit and buy Monero (XMR.) At this point, many crypto investors and traders will choose to withdraw their coins and deposit these in an offline wallet. This is a safer option as even the mainstream cryptocurrency exchanges are vulnerable to cyberattacks or scams.
Many traders choose the second option as trading Monero through a brokerage platform widens your options. You could trade Monero, or other digital coins, with derivatives and leverage. For example, instead of investing solely in Monero coins in a single exchange, you could open a CFD (“contract for difference”) with your broker and speculate on the price movements in the cryptocurrency market without having to own any underlying asset!
Where To Trade Monero
Find a broker with a suitable set of tools to equip you for trading the markets. Many traders will look for a platform with competitive market analysis tools. A round-the-clock customer support team is also highly valuable.
Here at TradeOr, we offer all the above and more. If you are interested in Monero trading, you can buy and sell cryptocurrency pairs and trade in forex, commodities, indices, and more. One popular way is to open a CFD trade with your broker and close it soon after and make a profit from any price change. If you want to open a more significant position than your capital will allow, at TradeOr, we let you trade with leverage of up to 500:1. Finally, many traders choose us for our stellar charting tool: TradingView. Both programs allow you to visualize and analyze market patterns. You can also monitor your progress and execute trades directly on the charts.
When it comes to cryptocurrency, one of the first words you will encounter is “volatile.” Many altcoins had peaked and crashed before their names even made it into the public vernacular. As digital coins go, Monero has had a relatively smooth journey through the markets. In 2018, Monero was the 11th largest cryptocurrency. Fast forward to 2021, and the altcoin has only dropped six places, occupying the 17th largest slot. The digital currency is not without its controversies, however. Monero’s murky history with illegal use has tainted its name – but not enough to drag down its market cap. The success of cryptocurrencies such as Litecoin, Ripple, and Ethereum is down to their steely technology and faithful community. If Monero continues to grow, it will be thanks to these key features:
Monero’s privacy is a bit like marmite – you either love it or hate it. Many people see it as a red flag encouraging illegal trade and association with criminals. Yet, for plenty of investors and cryptocurrency enthusiasts, this is precisely what drives the price and value of Monero.
While yet to be released, the hardware wallet for Monero is in the pipeline. Many traders are holding onto their XMR until the grand reveal.
As we have seen, Monero’s trajectory in the cryptocurrency markets has not been so much peak and crash as gentle ups and downs. For traders, this may not promise great profit with short-term trading, but it is another feather to Monero’s bow for long-term investors.
If you’re ready to take the plunge and start trading Monero, remember that the cryptocurrency market is highly volatile, which works both ways. Have a trading strategy in place and take advantage of the market analysis tools and expert guidance we can offer you at TradeOr.