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Exploring the Cryptocurrency Markets

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5 min read
Exploring the Cryptocurrency Markets

Some incredibly complex projects are being built, but exploring the crypto markets can be easier than you may think.


When you are introduced to the cryptocurrency markets, the range of metrics and stats can seem confusing. However, while some incredibly complex projects are being built, getting your feet wet and exploring the crypto markets can be easier than you may think.

What is Circulating Supply in Cryptocurrency?

For cryptocurrencies, supply refers to the amount of this asset that is available. In terms of circulating supply, this is the amount currently in the market and available for trading. On the other hand, total supply is the maximum amount of coins or tokens that can exist.

Understanding the difference can be made easier by looking at a cryptocurrency created through mining (such as bitcoin). In this context, as coins are mined that can be considered part of the circulating supply, the total amount that can be mined in the future would be added to form the total supply.

What Does Market Cap Mean in Cryptocurrency

Market capitalization, commonly referred to as market cap, is a prevalent metric used in the crypto markets. Market cap is the combined value of all the coins or tokens that are being traded. For example, if a token had 1 million coins and each of those coins was worth 1 dollar, the market cap would be 1 million dollars.

While market cap is a convenient way to see how a crypto has performed, it doesn't mean that you could attain that value if there isn't sufficient volume and demand if you were to sell a significant amount. In addition, there is a range of other things that can result in slippage and price movements when buying or selling, especially when you are trading larger volumes.

Factors that can Affect Cryptocurrency Prices

  • Goals and progress
  • Supply and demand
  • Development progress
  • Changes in cryptocurrency regulations
  • Competition from other projects
  • Trading volume and overall sentiment

How Do Cryptocurrency Pairs Work?

When trading, cryptocurrencies are usually traded as pairs. These pairs can be two different cryptocurrencies (ETH/BTC). They are also commonly against other traditional assets like the US dollar (BTC/USD), British Pound, or even the Euro. Trading pairs make it easy to understand the current value of a specific cryptocurrency compared to another asset.

What Does Volume Mean in Cryptocurrency?

Volume is a frequently used metric by cryptocurrency traders for a range of reasons. For example, high volume can point to increased interest if it is primarily on the buy side, while low volume can be a sign of disinterest or even a dead or dying project.

Volume is calculated by looking at the amount of a specific cryptocurrency traded that day; it can be broad or specific to only certain pairings and even exchange listings. Most commonly, you'll see volume displayed in terms of total trade volume during the last 24 hours, as this provides an excellent short-term overview of the current state of the market.

Where Can I Trade Crypto?

There's a range of ways to trade cryptocurrency; each has its limitations and benefits. However, if you're looking for the best way to trade cryptocurrency, peer-to-peer trading is highly flexible, with the best P2P exchange being our own LocalCoinSwap. When you're first getting started trading, P2P is a great choice; you can choose from a massive range of payment methods and exchange crypto with traders from around the world. Other options include centralized exchanges and decentralized exchanges like Uniswap, which only supports crypto-to-crypto trading.

Is Crypto Trading Still Profitable?

A quick look at the booming volume in the markets will show you that there is still a lot of potential in the space. New projects are launching all the time, and it is only natural that the demand for cryptocurrencies is increasing as older projects continue to become better established. However, if you're new to the space, it's worth taking it easy and getting a handle on the different opportunities that may be interesting to you before jumping in headfirst. While cryptocurrency trading can be profitable, cryptocurrencies can also be extremely volatile. While volatility can lead to great profits, it can lead to significant losses as well.

How Does Tax Work When Trading Cryptocurrency?

Tax is a topic that many cryptocurrency traders don't like to think about, but it's essential to understand your trading obligations. The last thing you want to be dealing with at tax time is realizing that perhaps you haven't kept the information you need to calculate your tax obligations or that you haven't been properly keeping your tax obligations up to date. The best thing to do is look to the regulatory bodies in your region that handle taxation and check for statements regarding cryptocurrency trading. Most often, trading crypto falls under capital gains taxes, but other tax types can apply, and it may depend on the kind of trader you are as well.

How Many Cryptocurrencies are There?

There are thousands of cryptocurrencies being traded. While most volume tends to be heavily weighted towards the most popular cryptocurrencies, trends, new projects, and other hype frequently result in projects rising through the market rankings and catching traders’ attention. However, while new cryptocurrencies are seemingly created daily, many coins and tokens end up dying out due to a lack of support, development, or exchange listings.

If you are looking to make long-term investments in cryptocurrencies, it can be helpful to look back on the previous years and which projects were once popular but may not even be active today. This kind of retrospective look can help you better understand that the market is constantly changing and evolving. However, even if you are a dedicated crypto trader, you should be careful when making decisions, especially those with longer-term targets.

Does Cryptocurrency Trade 24 Hours a Day?

Yes, unlike many other markets (e.g., stocks), there is no opening or closing of the markets. The cryptocurrency markets operate 24 hours a day and around the world. Whatever the time of day, or whatever your timezone, if you are looking for some action in the cryptocurrency markets, you'll be able to find some. Between P2P trading, margin trading, futures, spot, there's so much activity going on all the time, especially when it comes to the most established cryptocurrencies like Bitcoin and Ethereum.

The cryptocurrency markets are fascinating to observe and explore. Thanks to all the incredible projects being built, the innovation in the space, and even the hint of chaos that seems to occur from time to time, there’s something for everyone.

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