Today, many newcomers on the crypto market have a lot of questions about the crypto industry. Many people don’t know how much money they should have to start trading cryptocurrency. There are doubts and fears around the amount of money to trade and the platform to start. But the most difficult task is not to lose the starting capital. All in all, is it possible to invest $100 in bitcoin and gain a profit? Let’s figure it out in this article.

Features of the crypto market

First of all, keep in mind that trading is a quite risky way of earning money, requiring special knowledge and skills. Trading crypto-currency can be dangerous for newbies without a special knowledge-based approach as crypto-assets are highly volatile. On the other hand, high fluctuations in the value of digital money not only allow users to quickly lose capital but also multiply it.

Spot market

Many financial experts advise newbies to begin their cryptocurrency trading experience on the spot market. This will provide you with the opportunity to become acquainted with technical analysis, test different trading strategies without exposing your funds to high risks. Furthermore, experts believe that you should invest the sum of money you are ready to lose and do not start with a lot of cash. At the same time, your investments should be enough to trade for a long time in order to be able to improve your trading skills and discover how to operate on the crypto-currency market. 

How to start?

It is believed that $100-200 is enough to explore the market’s functioning features. At the beginning of your trading experience, running after the big profits is a bad idea as you will just waste your energy and desire to trade which will probably shatter your psychological stability. At the initial stage, the main task should be to discover the approach to trading and a trading strategy, profitable enough to bring you vast amounts in the future. 

DCA strategy

Finding the perfect moment to buy bitcoin is literally impossible. Whatever price a trader buys an asset at, it is very likely to fall before entering a long-term growth phase. Therefore, some investors use an “averaging” strategy. This strategy works like this: the user divides his capital into several parts and buys bitcoins with them over time. This way, if the price of the asset falls, you can use this as an opportunity and buy more coins. In this case, the average purchase price of BTC will go down. The best option is to invest $10 in BTC every day. 

At the first successful experience, the average return should be analyzed as the average return obtained while working with a small deposit. Experts also recommend setting a goal that should be achieved in a year or a month. For example, if the yield is 10% per month, the deposit must be $10,000 to receive $1000. 

Theoretically, it would be perfect to trade with an income of 10%, as the income will grow depending on the deposit. But there are no perfect situations in trading crypto-currency, so you should stick to your chosen strategy for long distances.

As experts explain, one of the main crypto market advantages is that users do not need a large start-up capital to start with. In their opinion, a novice trader will only need 100 dollars to buy some crypto on the stock exchange and start trading using the chosen strategy. On the one hand, this amount is sufficient to buy crypto-currency, and on the other hand – not so large as to be afraid to lose it. People must realize that without experience, knowledge, and practice, they may not succeed.

The amount for cryptocurrency trading should be carefully considered to avoid risks without using leverage. Let’s give an example – $13,7 thousand is enough to trade Bitcoin “1 to 1”, or about $400 at the current exchange rate to buy ETH. The more funds in the account, the more comfortable and safer trading will be, and the fewer funds, the greater the amount of borrowing is needed to buy or sell digital assets.

However, trading can be profitable and effective for the experienced trader, having some knowledge in the field of financial analysis. But a newbie needs to learn how to control risks and avoid losses in order to reach a desirable income. Therefore, the initial amount of funds should be sufficient and correlate with the current value of the assets that the investor is going to trade.