4 Things You Must Know Before Trading Bitcoin and Cryptocurrency – Cointelegraph

Interest in cryptocurrencies has been on the rise throughout 2019 and Bitcoin’s (BTC)  impressive 300% rally from $3,130 in February 2019 to $13,800 on June 26 surely had something to do with growing interest. 

Multiple studies have shown that millennials and younger investors, in particular, have grown increasingly skeptical of traditional financial service providers and banks in the wake of the 2008 financial crisis. At least 40% of this demographic has said that they intend to invest in cryptocurrency in the future. 

Fortunately for new investors, investing in digital assets has become much easier than it was pre-2017. But there are still a few crucial factors investors should consider before actually buying cryptocurrency. 

Here are four essential things investors must consider as you make your first cryptocurrency purchase and consider trading. 

Market capitalization

Currently, there are more than 4,900 cryptocurrencies listed across a long list of exchanges. Media tend to only cover the largest cryptocurrencies by market capitalization and these are the tokens most familiar to new and seasoned investors. 

Basically, market capitalization (or market cap) reflects the size of a company and the metric is calculated by taking the asset’s price and multiplying it by the total number of available shares. 

It also provides insight into the level of risk an investment represents and this is why It’s important to check a digital asset’s market cap prior to buying. 

Tokens with a high market cap and large circulating supply are theoretically