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How to Invest In Tron In 2021

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Tron is one of many cryptocurrencies that have emerged in recent years. It is a decentralised platform that allows users to deliver global digital content, as part of a blockchain-based entertainment system. Tron is intended to offer convenient and cost-effective sharing of digital content. The native token is known as TRX. 

The Tron Foundation was involved with the development of the Tron Protocol, and launched the system in September 2017. The Tron Foundation is headed by CEO Justin Sun. It uses features of blockchain technology and peer-to-peer (P2P) network technology to create a bridge between content creators and consumers. 

In the long run, it is hoped that the Tron network can provide a cheaper solution for content sharing and creation than existing platforms such as Netflix. This guide will discuss how to invest in Tron and it will also explain some of the strategies available to you. 

4 Ways to Invest in Tron

There are a variety of different ways to invest in Tron as a cryptocurrency, but in this section, we are going to examine four of the most popular. Some of these approaches can be used with or without leverage. 

1. Buy Tron Through an Exchange

Firstly, it is possible to buy Tron via a range of digital exchanges. These platforms offer a variety of cryptocurrencies, and Tron is certainly among them.

A cryptocurrency wallet can be termed as a hardware device, a software program, an online platform or a piece of paper that enables you to easily store private and public keys associated with cryptocurrencies. Wallets are generally divided into two categories: Hot and cold. Hot wallets are connected to the internet. Cold wallets are purpose-built devices that are intended to hold your keys and your investment securely, in an offline environment. Although crypto exchanges tend to offer storage provisions, it is advisable to download a hardware wallet before using Tron, or any other cryptocurrency. Among the wallets compatible with Tron are the following:

To trade Tron via cryptocurrency exchanges, it is necessary to register for one of the many platforms available. This requires a process of confirming your identity, which is usually achieved via government identity documentation and proof of address. Know Your Customer (KYC) regulated bank customer identity verification practices oversee this process, with the intention of managing risk.

Our recommended exchange

As mentioned previously, there are a wide variety of exchanges available to Tron, so in this section, we will discuss our recommendation in this field.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Payment Methods:
Wire Transfer, Bank Transfer
Full Regulations:
CySEC, FCA

2. Buy Fractions of Tron Through an Exchange

Tron is not one of the cryptocurrencies that enable investors and customers to purchase fractional quantities of the token. This is due to the fact that the price per unit of Tron is relatively low. Tokens that do enable this fractional purchasing include Bitcoin and Ethereum.

3. Trade Tron Through a Broker

Another possible purchasing route for those interested in Tron and other cryptocurrencies is a broker. These platforms have become far more available in recent years, as trading online has become more popular.

There are significant differences between trading with a broker and trading via an exchange. Cryptocurrency brokers act as intermediaries between crypto traders and the market, facilitating the buying and selling process. Cryptocurrency brokers need to be experts on the market and its mechanisms, and are essentially providing the service of guiding an investor through the process.

It should be noted that brokers charge fees for investing, but can also sometimes act as financial advisors. Certainly, those investing in Tron for the first time would be advised to hire a broker in order to guide them in this process.

Brokers may also offer a variety of services alongside their basic brokerage function. But it's important to choose a suitable broker, and this means placing an emphasis on security and compliance with existing regulatory measures.

Our recommended broker

There are many Tron brokers available, so in this section, we will discuss our recommendation.

1
Min. Deposit
$50
Exclusive promotion
Our score
10
Accepts customers from the USA
Offers 15 crypto coins to buy&sell including BTC, LTC, ETC, NEO and more
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA

4. Invest in a Tron ETF

Another option for those trading Tron is to use an ETF (Exchange Traded Fund). These can be used to trade cryptocurrencies like Tron via a traditional stock market. Another useful feature of ETFs is that they enable a diverse set of tokens to be drawn together into a single tradable asset. This provides diversity in trading that would otherwise be impossible. 

Cryptocurrency ETFs work in the same manner as any other ETF, tracking indexes, and baskets of cryptocurrency assets. ETFs can be used for both short-term and long-term investment strategies.

5 Tron Investment Strategies

There are a variety of ways that investors can choose to invest in Tron, so in this section, we're going to discuss five of the most important investment strategies.

1. Buy and ‘Hodl’ 

What is it?

Buying and holding is already a common way of investing in the stock market, and it is particularly applicable to the cryptocurrency niche. This strategy involves purchasing a cryptocurrency such as Tron, and then holding it for a period of time for price discovery to occur.

Those engaging in a buying and holding strategy believe that the underlying fundamentals of a particular token are positive. Furthermore, it is a strategy intended to achieve profit over a significant period of time. 

What is the benefit of using this strategy?

The advantages of buying and holding are, firstly, that it doesn't require a huge amount of market participation. Some of the other strategies that we will discuss require a much more hands-on approach, whereas buying and holding require very little input from an investor.

Buying and holding also enable investors to hang on to Tron, or indeed any other cryptocurrency, as an ongoing asset. It can therefore theoretically be used for another purpose, rather than just relying on it as an investment, but Tron can still be sold at a profit at any time.

2. Day Trading

What is it?

Day trading is another common practice on the existing stock market, and another technique that can be used to invest in cryptocurrency such as Tron as well. Traditionally, day trading has been most commonly used in the foreign exchange and stock markets, by traders who are both well-educated and well-funded.

The aim of day trading is to predict short-term fluctuations in the value of an asset, and benefit from these changes in price. In order to do this, the trader typically uses large amounts of leverage, and a variety of short-term trading strategies.

Day traders are particularly likely to pay attention to important information relating to market conditions, such as economic statistics, corporate earnings and interest rates. Another form of day trading that has become popular is high-frequency trading, which relies on sophisticated algorithms to exploit short-term market inefficiencies.

What is the benefit of using this strategy?

The major advantage of day trading is that investors can achieve a profit in an extremely short time period. There is no need to hold on to a token for a long time; the aim is to make money within a 24-hour cycle.

Day trading may also provide investors with better leverage than holding positions overnight. However, day trading is a risky strategy, and one that is dependent on a huge amount of market knowledge and intuition.

3. Shorting

What is it?

Shorting is another way of profiting from Tron trading, which has also been used in the stock market for many years. Shorting is also often referred to as short selling, or just simply selling, as opposed to buying stock.

Shorting is effectively a bet on an asset, commodity, or equity. Any investor that chooses to short Tron believes that the price of the cryptocurrency will diminish. It is effectively an investment on behalf of people who are sceptical about a particular asset.

If shorting is successful, investors will make a profit, whereas if an asset gains in value, those shorting the entity will lose a portion of their investment. It is thus somewhat similar to spread betting on sporting events.

What is the benefit of using this strategy?

The major benefit of shorting as a strategy is that it enables crypto investors to make money in a bear market. 

Short selling can also be used as a hedge against other investments, or even an investment in Tron. We will discuss hedging in more depth later in this article.

4. Using a Trading Bot for trading

What is it?

Trading bots have proved particularly useful for beginners in the investment marketplace, as they have enabled people to enter trading who would otherwise have found this impossible. Auto-trading software is now readily available, and this effectively automates trades, meaning that absolutely no user input is necessary once the initial parameters have been satisfied.

Artificial intelligence and machine learning technology are central to the innovation of trading bots. Sophisticated computer programmes effectively run these artificial intelligence mechanisms, and they also have the ability to learn from the market and their previous behaviour. The technology involved in trading bots is highly sophisticated, and has already been used to make significant profits for a wide variety of institutional investors.

What is the benefit of using this strategy?

The most obvious benefit of using a trading bot strategy is that it is an extremely low-maintenance approach. It doesn't require any human input at all, instead relying on automated processes. This means that even those with little or no cryptocurrency knowledge can invest in Tron via trading bots.

Another important aspect of algorithmic trading is that it enables investors to participate in the market over a timeframe that would otherwise be impossible. Human traders can only spend so long paying attention to the market, whereas there are no such limits for a robot or computer. 

Trading bots also take the emotion aspect out of trading, making decisions based purely on pragmatic market observations.

5. Hedging Tron

What is it?

Another trading option with Tron is to hedge the cryptocurrency. Hedging is an investment strategy that involves protecting yourself against losses in the market. It is often used by sophisticated and institutional investors as a form of insurance.

There are two basic options in this department; either use Tron as a hedge, or hedge against the crypto token. However, it is more likely that investors would hedge against changes in the price of Tron, due to the fact that cryptocurrencies tend to be part of a relatively volatile market. 

What is the benefit of using this strategy?

The benefit of using hedging is that it is a safety-first approach. By hedging, you are protecting yourself against undesirable fluctuations in the price of Tron. This is why hedging is almost always a major part of the strategies of experienced and successful investors. It simply makes any cryptocurrency investment strategy more likely to be successful.

Invest in Tron

What to Consider Before Investing in Tron

There are a variety of considerations that investors must take into account before investing in Tron. So in this section of the article, we will discuss some of the most important factors that you may wish to consider.

Fees

Tron fees vary, depending on the market conditions. On the Tron network, transaction fees are calculated via Bandwidth and Energy, with each user allowed to make about 15 transfers free of charge. In subsequent transfers, the transaction fee is paid according to the Bandwidth used on each transaction. What can be said is that the volume of Tron transactions has steadily increased, even exceeding Ethereum recently, so its fees are generally considered to be reasonable.

Exchanges will tend to charge fees for trading Tron. For example, the standard fee at Binance is 0.1% at the time of writing.

Risks

Although there are massive opportunities associated with cryptocurrency investment, it should also be noted that there are risks in investing with Tron.

Probably the most obvious and notable is that the cryptocurrency marketplace is rather volatile. Unexpected changes in market sentiment are rife with cryptocurrency, and this can lead to sudden movements in price. Cryptocurrencies have both massively increased and decreased in price over a short period, and this can be very attractive for investors, but also expose them to significant risk.

It should also be noted that cryptocurrencies remain relatively unregulated. Governments and central banks have begun to step in, and they have certainly become a credible asset class. However, question marks persist over whether cryptocurrency should be classified as a commodity or virtual currency, and the regulatory environment associated with cryptocurrencies is certainly not as developed as other assets, commodities, and equities.

Cryptocurrencies are also susceptible to error and hacking; human beings are not infallible, and technical glitches can never be overcome entirely. However, it should also be noted that all physical assets are subject to the threat of theft, and this is nothing new in the cryptocurrency sphere.

Tron could also potentially be affected by hard forks or discontinuation, but it doesn't seem particularly likely at the time of writing. CFD trades in cryptocurrency also carry risk, and any investor in Tron should definitely proceed with caution before committing themselves to any investment. 

Payment methods

There are a variety of payment methods available for Tron, with most fiat currencies supported. PayPal, Neteller and Skrill are also available, while the token can also be exchanged for the market-leading Bitcoin, and often Ethereum as well.

Why Invest in Tron?

Tron is undoubtedly an ambitious project, with plenty of future use cases. Its peer-to-peer distribution and storage is considered both fast and effective, and it is hoped that this will provide excellent functionality for a wide variety of users in the future.

Instead of relying on clicks and views, the Odyssey System associated with Tron plans to base incentives on a method that will depend on user interaction and engagement. It is therefore significantly more sophisticated than existing platforms, and may revolutionise the entire content industry.

The developers of Tron have further evolutions already planned. Star Trek (mid-2023) and Eternity (late-2025), will enable participants to create decentralised gaming and predictive markets platforms, while also help in raising funds. It seems that the future of Tron is rather bright as per some investors, and its climb into the top 20 cryptocurrencies reflects this. The price of Tron has increased four-fold in 2021. The token TRX trades at $0.13 at the time of writing.

Summary of Investing in Tron

Tron is a very exciting project, with some really innovative ideas, and it is no surprise that it has achieved a massive increase in value during the calendar year.

There are a wide variety of potential investment mechanisms for Tron, and many ways that investors can make money with this cryptocurrency and blockchain project.

Tron has also demonstrated a real commitment to security and user participation, with an enthusiastic community already invested in the project.

Tron is here to stay, and may yet become one of the most important blockchain projects ever developed as per some veteran traders.