Cryptos are currencies with no physical form. That means you cannot touch them, but you can use them to buy, sell and trade things online. Cryptos use encryption technology that converts legible information into an almost uncrackable code to track purchases and transfers. Cryptos are relatively new, having come into existence in 2009 only after Satoshi Nakamoto published their invention of Bitcoin.
Day trading involves buying low and selling high to make a profit. While you can day trade any crypto, some are better suited than others.
Bitcoin is the original crypto and was created in 2009. It’s the most popular crypto because it has a large market cap (the price of all existing coins added together). There are plenty to go around, making them cheap to buy.
While many cryptos are off-limits due to their high prices, you can buy Bitcoin for under $10,000. With every Australian adult holding about $3,100 in digital currency, that makes your day trading profits you pocket larger compared to owning other cryptos worth over $10k per coin. BTC operates via blockchains 2. A blockchain is a public ledger where transactions made in Bitcoin are recorded chronologically. It makes it easy to track transactions which you can find on blockchain.info. You can make profits by buying low and selling high or being ‘paid’ in Bitcoin when using your debit/credit card at places that accept crypto.
Bitcoin is riskier than other cryptos because BTCs entire value depends on how secure the blockchain is. If a hacker gained access, they would have complete control of all Bitcoins – giving them money to spend anonymously while real owners are left with nothing.
Ethereum has similar features to Bitcoin, but its scripting language lets developers build decentralised applications more efficiently. It was invented in 2013 by Vitalik Buterin and had a fast-growing market cap as it has many uses.
Ethereum launched in 2015, offering benefits like faster block times (blocks are confirmed/approved every 12 seconds instead of Bitcoin’s 10 minutes) and lower fees (about 1/10th the amount). Like BTC, Ethereum is divisible by eight decimal points and can be bought for under $500 (priced at around $90 per coin), making it easy to buy smaller amounts to trade with.
With new cryptos being created all the time, you need something different if you want day trading success. ETH has a solid team, which makes it more reliable than others that may or may not have long-term plans.
Litecoin was created in 2011 and is almost identical to Bitcoin but has a larger coin limit (84 million vs 21 million). It processes blocks every 2 1/2 minutes, making transactions take seconds to be confirmed instead of about 10 minutes with BTC. While other cryptos rely on miners for transactions, LTC uses scrypt hashing, which means ASICs cannot mine it (instead, it can only be mined by GPUs and CPUs). The benefit of this is that those types of mining setups are way cheaper than the rigs required to mine BTC or ETH.
LTC also has lower fees than both BTC and ETH. Its price is currently around $45, and like ETH, Litecoin can be bought for under $500 and sold for a profit.
Monero was created in 2014 and has become one of the most popular cryptos used in cryptocurrency trading due to its high anonymity level when making transactions. Stealth addresses are used, which means that all transaction data is completely private on the blockchain, meaning there is no link between you and your transaction history/balance on the ledger. If you’re more interested in complete privacy while using cryptos, XMR provides this, unlike others where identity leaks are possible. Monero’s community is smaller than BTC or ETH, which means it isn’t as widely accepted yet, so buying things with it may be challenging in the future.
Monero is not divisible by eight decimal points, meaning no matter how much you hold, it will always cost 1 unit of XMR to send. It makes it impractical for day trading. However, its price has skyrocketed recently, so it could be worth holding if you believe in its long term success.