Interested in Day Trading Crypto? 5 Things to Think About

Now, more than ever, people are looking for new and exciting investment opportunities. With so many people working from home due to Covid-19 and no longer commuting, people find themselves with more time on their hands and are motivated to go out and make money on their own, outside of traditional nine to five jobs.

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For these reasons and more, day trading cryptocurrency is becoming an increasingly popular venture. If you’re thinking about jumping into the crypto day trading world, there are a lot of things to consider. To help you on your journey, we have put together a list of five top considerations if you’re thinking of taking the plunge into day trading cryptocurrencies. Also to stay ahead in your trading strategy check out Bitsgap.

1. Understand the risk

The absolute number one thing to consider when you are thinking about day trading crypto is that it is not for everyone. You should always think about the risk when considering any new investment opportunity. This is especially true in the crypto world.

One of the major reasons that people are drawn to day trading crypto is the same reason that many people ultimately decide to stay away. The market is incredibly volatile and there is a lot of risk involved.

This lends itself perfectly to day trading. When a commodity or investment is highly volatile, fast-paced short-term transactions can turn into big profits under the right circumstances. The speed at which cryptocurrency prices swing means that it is much easier to make big profits quickly. It also means, on the flip side, that you can get in over your head quickly.

This is not meant to either encourage or discourage you from day trading cryptocurrency. The only point is you need to consider the risks. If you are relatively young and have disposable capital that you can afford to lose, day trading is a great way to swing for the fences. If you are a more mature investor that is on a slow and steady track, you may be best served by other types of investments.

2. Know the coins 

Chance are, the reason that you are considering day trading crypto is that you have been inspired by the stories of Bitcoin millionaires. Bitcoin was the first and is still by far the most popular form of cryptocurrency.

The problem with Bitcoin is twofold. First, as the most well-known crypto, the market is saturated with investors looking to be the next Bitcoin success story. That leads to issue number two: the price of Bitcoin is very high.

While the volatility of Bitcoin can still allow you to make money day trading, there is a big barrier to entry. In late 2020, the price of a single Bitcoin was over $10,000. Even when it dipped at the beginning of the pandemic, it was still at $5,000. This makes it difficult for new investors to get into the game.

The good news is, there are plenty of other, less-heralded cryptocurrencies (collectively known as altcoin) that are much easier and less expensive to get into with day trading. Cryptos like Ripple, Litecoin, Tether, XRP, and literally thousands more give new crypto day traders the opportunity to find their favorite digital currency and start trading.

3. Read the fine print on fees 

There are many different trading platforms you can use to start day trading cryptocurrency. Exchanges such as Kraken, Binance, Coinbase, and more offer you a place where you can easily trade all different types of cryptocurrencies. The important thing to think about when choosing a platform, though, is the fee structure.

As this guide from Cove Markets notes, fee structures can vary significantly depending on how much you’re trading. Some sites give big discounts for traders that deal in high volumes, while the fee difference between high and low volume traders on other sites is much smaller.

Think about how you want to trade and how much you think you will trade before picking a platform. If you know how you are going to trade, you will be able to compare the fee structures of the different exchanges and find the one that works best for you.

4. Consider the time commitment 

Day trading cryptocurrency is not a “set it and forget it” endeavor. In order to day trade successfully, you must be fully engaged and ready to pull the trigger on a buy or a sell order at a moment’s notice. This is a big time commitment.

In addition to being a focused keyboard jockey, there is plenty of work to be done outside of your trading hours. Watching the markets, doing research on different types of cryptocurrencies, and studying charts to find patterns is all very time consuming.

Having the time and being willing to put in the work can serve you very well when day trading crypto. If you don’t have the time or aren’t interested enough to put in the time, investing in the stock, bond, or commodities market may be a better idea. With these types of investment vehicles, you can buy in and check back much less often.

5. Watch the market

The final consideration for you to think about if you are interested in day trading crypto is if you really understand and have a real interest in the market. Day traders must have a deep understanding of how the market works, a knowledge of the market’s history, and an idea of where it is going. Without these things, it will be very difficult to find success.

The best way to deepen your understanding of the crypto market is to dive in and watch it for a bit before you invest real, hard-earned money. You can simply take the time to watch and study the market or, if you are more of a hands-on learner, there are several free crypto trading simulators online that can help you understand what day trading digital currency is all about.


Day trading cryptocurrency can be an incredibly interesting, fun, and lucrative experience. It is not for everyone though, because it is also time-consuming and comes with a good deal of risk. If you are considering jumping into this type of trading, consider the points above and if you decide it is right for you, you can start trading today. Good luck!  

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