While crypto is now becoming relatively established, there are still plenty of investors who are yet to dip their toe into the world of Bitcoin, Ethereum, and the thousands of other digital currencies that make up the cryptocurrency space.
One of the biggest hurdles prospective crypto investors face is a fear of losing capital while learning how to trade crypto. With a lot of new terms and a plethora of tokens to discover, the experience can feel overwhelming.
For this reason, some exchanges such as Swyftx offer customers the chance to practice before doing the real thing with crypto demo trading.
Below we’ll explain what crypto demo trading is, why you might want to do it, and how to get started.
What is crypto demo trading?
Known as crypto demo trading, or “paper trading”, this form of investing is considered a way to test the waters before diving into investing with real money.
Crypto demo trading simulates investing in the real world by reflecting the live conditions and prices of actual cryptocurrencies.
Instead of purchasing crypto tokens with fiat currency, demo modes give users a supply of artificial money that can be used to purchase crypto tokens.
These demo modes allow you to understand how trading works, figure out investment strategies and build a confident understanding of the movements of the crypto market.
Swyftx, for example, credits user accounts with $10,000 worth of virtual money. This can then be used to virtually buy cryptocurrencies such as Bitcoin, Ether, and over 310+ other tokens available.
While no real money or cryptocurrency is ever traded, your artificial investment will rise and fall the same as a real investment would.
Why use crypto demo modes
People choose to use crypto demo modes as they allow trading without any financial risk.
While the performance of the crypto market as a whole has been unprecedented since its inception, it is also subject to volatility and affected by macro events going in in the real world.
Demo trading allows users to see first hand how a virtual portfolio weathers such financial storms without taking a hit to their real capital.
It also enables traders to learn the ins and outs of trading such as the best time of day to trade specific cryptocurrencies without any personal risk.
Beginners and even more experienced traders use demo modes to test dollar cost averaging strategies too. For example, whether investing daily, weekly, monthly or even quarterly works best and for what coins.
How to demo trade
Getting started with crypto demo trading is easy. Swyftx’s demo mode is always a single button away, allowing you to switch between real and virtual trading quickly anytime you like.
To try Swyftx’s demo mode, simply follow these instructions:
- Create a Swyftx account: Sign up for a Swyftx account using your name, email address, and phone number. It’s important this data is accurate to conform to standard customer checks.
- Toggle demo mode: To turn on demo mode, simply look in the top right corner of your screen and click the toggle button. Once in demo mode, you will see a yellow banner across the top of the page to indicate you are now trading with artificial currencies.
- Begin crypto demo trading: After toggling on demo mode, you will be given $10,000 of virtual currency. You can then use this to invest in cryptocurrencies with no risk to your real world capital.
Takeaway
While it can be tempting to jump right into trading crypto, demo modes offer the chance to learn without fear of losing real money as well as develop sound investment strategies that may bring improved returns over the long term.
