How Crypto Trading Works
Buying, Selling, and Surviving the 24/7 Market
The Simple Explanation
Trading crypto is similar to trading stocks — you buy low, hope to sell high. But the mechanics are different. Crypto markets never close, the assets are different, and the risks are unique. Let's break it all down.
How Do You Buy and Sell Crypto?
You need three things:
- A crypto exchange account — This is where you trade (like a brokerage for stocks)
- Money to deposit — You link a bank account or debit card
- A decision on what to buy — Pick a coin, choose an amount, hit buy
It really is that straightforward. Most exchanges let you start with as little as $1.
Popular exchanges:
| Exchange | Known For |
|---|---|
| Coinbase | Beginner-friendly, widely used in the U.S. |
| Kraken | Strong security, good for learning |
| Robinhood | Stocks and crypto in one app |
| Binance | Largest globally, more advanced tools |
Once you buy crypto, it sits in your exchange account (a custodial wallet — the exchange holds it for you). You can also move it to a personal wallet that only you control, like a Ledger or Trezor hardware device.
The 24/7 Market
This is one of the biggest differences from stocks:
| Stock Market | Crypto Market | |
|---|---|---|
| Hours | Mon-Fri, 9:30am-4pm ET | Every minute of every day |
| Holidays | Closed on holidays | Never closed |
| Weekends | Closed | Open — big moves often happen Sunday night |
This means crypto prices can change while you're sleeping, on vacation, or eating dinner. It's exciting, but it also means you can't just "check it in the morning" the way stock traders sometimes do.
Common Coins You'll Hear About
There are thousands of cryptocurrencies, but here are the ones that come up most:
| Coin | Ticker | What It Is |
|---|---|---|
| Bitcoin | BTC | The original — digital gold, store of value |
| Ethereum | ETH | Powers smart contracts and apps (more than just money) |
| Solana | SOL | Fast and cheap transactions, growing ecosystem |
| Cardano | ADA | Academic approach to blockchain, focused on research |
| Dogecoin | DOGE | Started as a joke, became a real market force |
Bitcoin and Ethereum together make up the majority of the total crypto market. Everything else is often called an altcoin (alternative coin).
Crypto vs. Stocks: Similarities and Differences
Similarities: - Both use supply and demand to set prices - Both can be traded on exchanges - Both have charts, candlesticks, and technical analysis - Both can make or lose you money quickly
Differences: - Crypto has no earnings, no revenue, no CEO — there's no "company" behind Bitcoin - Crypto is less regulated — fewer protections if something goes wrong - Crypto can be sent directly to anyone in the world without a middleman - Stocks are insured by SIPC up to $500K if your broker fails; most crypto has no such protection - Crypto is taxed as property — every trade is a taxable event, even swapping one coin for another
Risks Unique to Crypto
Crypto has all the risks of stocks, plus some extras:
| Risk | What It Means |
|---|---|
| Exchange hacks | Exchanges have been hacked and users lost funds (Mt. Gox, FTX collapse) |
| Lost keys | If you control your own wallet and lose your password (private key), your crypto is gone forever |
| Rug pulls | Scam projects where creators take investor money and disappear |
| No regulation safety net | If an exchange fails, there's no FDIC or SIPC insurance |
| Extreme volatility | A coin can drop 80%+ and never recover |
| Scams | Fake coins, phishing links, and "guaranteed return" schemes are everywhere |
The golden rule: Never invest more in crypto than you can afford to lose completely. This isn't just a saying — people have lost everything.
Key Takeaways
- You buy and sell crypto on exchanges like Coinbase or Kraken
- The market runs 24/7 — prices never stop moving
- Bitcoin and Ethereum dominate, but thousands of other coins exist
- Crypto shares some traits with stocks but has unique risks
- Security, scams, and volatility are bigger concerns than with traditional investing
Practice: Test Your Knowledge
Question 1: It's Saturday at 2am and Bitcoin's price drops 15%. Can you sell your Bitcoin right now? Why or why not — and could you do the same with a stock?
Question 2: What is a "rug pull" in crypto, and why is it more common in crypto than in the stock market?
Question 3: You buy $500 worth of Ethereum, then trade it for Solana a month later when your ETH is worth $600. Is that a taxable event? Why?
Part of the Top the Bot™ Education Series topthebot.com/learn