Cryptocurrency trading is now one of the fastest ways to make money in Africa. With the increasing adoption of blockchain technology across the continent, Africans now invest in cryptocurrencies to diversify their investment portfolios and generate passive income.
As a result, cryptocurrency trading has become a popular option for people who are seeking to achieve financial independence.
In this article, I’ll share how to trade and make money with cryptocurrency
What is Cryptocurrency?
Cryptocurrency is a type of digital money that is designed to be secure, decentralized (independent of any central authority, such as a government or financial institution).
It uses advanced cryptography to ensure that transactions are secure and transparent. Unlike traditional currencies, which are physical and issued by central banks, cryptocurrencies exist solely in a digital form and are stored in a digital ledger called a blockchain.
How to Trade Cryptocurrency in Africa
To trade cryptocurrency;
Set up an account with a cryptocurrency exchange
Since Bitcoin became popular in 2008, we’ve seen different tech companies introducing their digital coin and the list of digital assets keeps growing everyday
Now we have the likes of Ethereum, Solana, Solygon, Bnb, Litecoin and other numerous digital currencies that are valuable assets.
The increase in digital currencies ushered in the creation of exchange platforms where you can buy, sell or swap your cryptocurrency.
Some exchange platforms are:
And of course setting up an account is very easy, just go to play store and download the exchange app you want then fill in details like name, address, ID card and any useful information required to get you started.
Read Also: How to Earn Money Online without Investment
After setting up your account what you need to fund it. Funding your account will allow you to buy any cryptocurrency of your choice and also increase your knowledge on how cryptocurrency trading works.
You can fund it with any amount of your choice, but for most platforms, the minimum is $10. As you progress you can increase your portfolio.
When you’re done funding it, make a purchase of the cryptocurrency. After purchase, the cryptocurrency will be stored on the digital wallet you have created in the exchange platform.
Store cryptocurrency securely
Storing your cryptocurrency safely is very important if you don’t want to lose your investment. When setting up an account in a cryptocurrency trading platform, you’ll be given a phrase to write out. The phrase will be used to access your wallet whenever you want to login on another device.
You can use cold storage (offline wallet). Cold storage means saving your private key in a piece of paper or any other place besides the internet.
Now that you’ve done the above requirements, it’s to start cryptocurrency trading.
Here are different strategies for cryptocurrency trading:
- Day trading
- Bot trading
- High frequency trading
- Buy and Hodl
1. Day trading
Day trading is a practice of buying and selling cryptocurrencies within a single day, with the aim of making profits from the price fluctuations. It requires close monitoring of market trends and quick decision-making to capitalize on short-term opportunities.
You need to monitor the market closely to know when to buy low and sell high; this doesn’t require any special skills. You only need to be alert and watch the market trends.
Arbitrage is the practice of taking advantage of price differences between two or more markets to make a profit. It involves buying and selling the same asset in different markets simultaneously to exploit pricing discrepancies.
3. Bot trading
Bot trading means that your trades will be carried out by automation. One good thing about this method is that it is stress free, you can set it up while you go about your daily activities.
4. High frequency trading
High frequency trading is a type of automated trading that uses powerful computers to buy and sell financial assets as quickly as possible. The term “high frequency” refers to how quickly these trades are carried out . They may take place in minutes, seconds or even milliseconds!
5. Buy and HODL
HODL, as an acronym for “hold on for dear life,” implies not selling when the market goes down or becomes volatile.
It is more like a long-term approach to cryptocurrency trading. Most cryptocurrency holders use this strategy because they believe cryptocurrency will soon replace government issued fiat currencies (paper note).
Swapping might not sound like you’re actually trading cryptocurrency but believe me this is also a very profitable strategy if you want to make money from cryptocurrency. To swap means to trade your current cryptocurrency for another cryptocurrency.
If you’ve learnt how to read market trends and know which coin will skyrocket soon enough, then this strategy will be profitable to you. You’ll be surprised how you can make $1k by just spending cryptocurrency that isn’t up to $400 or $500. You can use tools like DEX Screener and DEXTools to initiate this strategy
Cryptocurrency trading in Africa is not as complicated as it may seem, and you are sure to get a good return on investment within a limited time.
However, remember that cryptocurrency trading involves risks, and prices can be highly volatile. Never invest more than you can afford to lose, and seek professional advice if needed.
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