Essential knowledge for beginners in the currency circle. Essential knowledge for trading in 2025

Welcome to the world of cryptocurrencies. This is an area full of opportunities but also accompanied by high risks. As a novice, it is crucial to master the basic knowledge and establish correct investment concepts and risk awareness before entering the market in 2025. This article will provide you with a comprehensive guide to get started.

Core concept analysis

What is cryptocurrency?

Cryptocurrency is a digital or virtual currency created by new units using cryptography techniques to ensure transactions are secure and control the digital or virtual currency created by new units. The most famous example is Bitcoin (Bitcoin), which opened the entire era of cryptocurrency. Except for Bitcoin, all other cryptocurrencies are called "altcoin", such as Ethereum (ETH), Solana (SOL), etc., and they each have different technologies and application scenarios.

What is blockchain?

Blockchain is the core technology behind cryptocurrencies. You can think of it as an open, transparent, and tamper-free distributed digital ledger. Each transaction is recorded in a "block" and then linked to the previous block to form a "chain". Since this ledger is jointly maintained by thousands of computers around the world, it is extremely difficult to tamper with, ensuring the security and credibility of transactions.

What is an encrypted account (Wallet)?

Crypto Accounts are tools used to store, manage, and trade your cryptocurrency. It contains your "public key" (equivalent to a bank account number, which can be told to others) and "private key" (equivalent to a bank card password, which must be strictly confidential and will never be disclosed to anyone ). Accounts are mainly divided into two categories:

Hot Account: Internet-connected accounts, usually in the form of mobile apps or browser plug-ins, are convenient for transactions but relatively low in security.

Cold account: Hardware devices that are not connected to the Internet, such as USB flash drive hardware accounts. It stores private keys offline and is currently recognized as the safest way to store assets.

What is Exchange?

Exchanges are platforms for buying and selling cryptocurrencies, equivalent to the "stock exchange" in the crypto world. They are also divided into two categories:

Centralized Exchange (CEX): operated by a company that provides high liquidity, rich functions and customer service. Users need to register an account and complete identity authentication (KYC).

Decentralized exchange (DEX): Runs based on blockchain smart contracts, without permission, users directly conduct peer-to-peer transactions through their own accounts, and have full control over assets.

Beginners on the road: Start your trading journey in three steps

Step 1: Learning and Research (DYOR)

"Do Your Own Research" is the first iron rule in the currency circle. Before investing any money, take the time to learn about the projects you are interested in. Read its white paper to learn about its goals, technology, team background and community activity. Don't blindly believe anyone's "wealth code".

Step 2: Select and register the exchange

For novices, starting with a centralized exchange with a good reputation, large number of users and high security is a safe choice. During the registration process, you need to complete identity authentication (KYC) and be sure to enable secondary verification (2FA) , such as Google Verifier, to add an important line of defense to the security of your account.

Step 3: Safely keep your assets

There is a famous saying in the currency circle: "Not your keys, not your coins." (If it is not your private key, it is not your coins). It is not safe to store large amounts of assets on exchanges for a long time, as exchanges can be hacked or face other risks. It is strongly recommended to transfer most of your long-term holdings to your own cold account or a reputable hot account after completing the transaction.

Essential knowledge for trading in 2025

Market Analysis: The Foundations for Making Intelligent Decisions

Fundamental Analysis (FA)

This is similar to stock analysis, focusing mainly on the intrinsic value of the project. You need to research:
Project White Paper: Understand its vision, problems to be solved and technical solutions.
Team background: Whether team members have relevant successful experience and good reputation.
Tokenomics: Tokenomics: Tokens’ total amount, distribution method, release rules, etc., which directly affects its future value.
Community and Ecology: An active, active community and evolving ecosystem are key to the success of the project.

Technical Analysis (TA)

Technical analysis is a method to predict future price trends through historical charts, price trends, trading volumes and various technical indicators (such as RSI, MACD). This is a complex skill that requires a lot of learning and practice. Newbie can start by understanding the basic K-line chart, support and resistance levels.

Risk management: Maintenance is the first priority

Invest only in the money you can afford to lose

Warning: The cryptocurrency market is extremely volatile and prices may soar or plummet in a short period of time. Never invest with your essential funds, emergency reserves or borrowing funds.

Diversified investment

Don't put all your money into one project. Spreading funds into several different projects you have studied and optimistic about can effectively reduce the risks brought about by the failure of a single project.

Set stop loss

When conducting a transaction, set a stop loss price in advance. When the price falls to this position, the system will automatically sell it, helping you keep your losses within an acceptable range and avoid greater losses caused by emotional decisions.

Stay alert: Identify and avoid common scams

Newbie is the favorite target of liars. Be sure to be wary of the following common scams:
Phishing website/mail: Disguised as an official website or email to cheat your account information or private key.
False airdrop/gift: Claiming to transfer money to your account address to get multiple refunds, which is 100% a scam.
Pump and Dump: The dealer or KOL hypes an unknown small currency on social media, attracting retail investors to buy and push up the price, and then they ship at high prices themselves, causing the currency price to plummet.
Core principle: Remember, there will be no pie falling from the sky. Any promises that are unrealistic and high returns are traps.

Outlook 2025: Areas worth paying attention to (non-investment advice)

The crypto world is constantly evolving, and new narratives and technologies are emerging one after another. In 2025, the following areas are worth your time to study and study rather than directly as investment goals:
The combination of AI and encryption: How artificial intelligence and blockchain technology empower each other to create new applications.
DePIN (Decentralized Physical Infrastructure Network): Use tokens to incentivize users to contribute real-world hardware resources (such as storage, bandwidth).
Real-world Assets (RWA) Tokenization: Put real-world assets such as real-world assets such as real estate and bonds on the chain to improve their liquidity.
Layer2 expansion solution: Layer 2 networks of public chains such as Ethereum, aiming to reduce transaction fees and increase speed.

Practice of mindset: The key to success

Overcome FOMO and FUD

In the market, you will continue to face challenges from two emotions. First, "fear of missing out" (FOMO), and when you see others making money, you get hot and chase highs to buy; second, you are "fear, uncertainty and doubt" (FUD), and when you see negative news or price drop, you sell in panic. Learning to think independently and make decisions based on your own research and plans is a sign of mature investors.

In summary, as a novice, the key to entering the currency circle and surviving for a long time in 2025 is: continuous learning, strict risk control, and safety. I wish you can gain knowledge and reward your ideals on your new journey to the crypto world.

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