Has Crypto Accelerated the Rise of DIY Trading Platforms?
Investing and trading have gone from the relatively quiet and secretive activities of those with the wealth to do it to something that anybody can do with a bit of their savings. Whether they can do it successfully is another question altogether.
However, one thing is for certain: the blossoming presence of mobile app technology, internet trading apps, and even traders on YouTube who aim to expose some of the practices and teachings of prominent investment banks and hedge funds has resulted in a world with more retail traders than ever before. So, how is cryptocurrency featured in this? Let’s take a look.
Understanding the Blockchain
Cryptocurrency has become such an evolutionary force in finance because of the cryptography and blockchain technology that validate every transaction. By forming each transaction into a set of blocks that can’t be changed or amended, therein lies the security.
When you use your traditional bank account and send money to a friend or family, it’s not you sending it to your friend or family. Your bank account sends your money to your friend’s bank account, and it’s their security in the middle, which is essentially the whole reason you’re using a bank and what helps to validate each payment.
Blockchain undercuts any need for a third party—all you need is the wallet address of the person or company to whom you want to send your funds, and with one click, it’s there. There’s no worrying about cross-border fees, expensive wait times, or the bank having you jump through hoops to send your own money.
Traditional digital platforms have decided to explore how their customers can benefit. Cryptocurrency casinos are the obvious use case example, and the rise of gaming at a live casino using crypto has been one of the easiest methods the industry has to showcase to people just how innovative cryptocurrency and blockchain can be. Live games are innovative in their own way as they connect players to casino dealers rather than just an interface.
Playing a live casino at a crypto provider operates much like a traditional one. However, as we have touched on - players can connect a crypto wallet and place a bet rather than enduring time-consuming KYC processes. Transfers are usually faster and fees may be lower for players using cryptocurrencies.
Tackling Investments
We must say here that nobody should invest in products or services they do not understand. All investments carry risk; even if you have performed ample market research, you could still lose your money. It’s crucial not to lose sight of this fact in a world where all sorts of Instagram “forex experts” promise fascinating insights and tips - but ultimately, it’s a load of hot air to get attention on social media and gain followers.
Unlike forex or commodities markets, traders will have to pay a fee to a broker and are often impacted by colossal investment giants who have tens of billions of trading options, tools, and information at their disposal. Cryptocurrency platforms have championed the DIY rise of people looking to develop their knowledge and profit from trading.
Again, we must reiterate that some retail traders lose money, regardless of the market. However, with the ease at which people can open a crypto wallet and register for an exchange without having to pay some of the excessive fees that come with more traditional investment markets, this is the biggest contributor to the rise of cultivating your DIY trading tools and giving it a go yourself online.
The Power Of Social Media
Stocks, forex, and commodities are specialist markets, and you’re usually putting your small amount of inexperienced capital up against some of the most substantial institutions on Earth that have the sharpest trading minds working on their trading floor. Some traders have made money purely because they bought Dogecoin before Elon Musk tweeted about it or got involved in the Gamestop short squeeze, which saw a hedge fund lose billions of dollars.
Social media can send the price of cryptocurrencies through the ceiling, as with the meme coin Jeo Boden, which surged 350,000% in the space of a month.
Twitter, Instagram, and YouTube can also be great tools for those looking for more information about how the markets work and what drives price action. However, unlike more regulated investment markets, cryptocurrency investors on social media should not be treated as gospel, and many cannot give financial advice. Use their information as a guide to build your own knowledge, not as gospel truth.
Final Thoughts
We’d say that social media has played a more prominent role in the rise of DIY platforms than crypto has. However, cryptocurrency has definitely been able to onboard more people and show them that trading isn’t perhaps this secret market is simply used by many more now. By taking the time to learn and having the right fortitude to trade, retail traders may be able to learn more about using these DIY platforms.