Back in the 20th century, the concept of digital currency did not even exist, and within the last 10 years, the crypto community developed rapidly. Millions of people have stakes in cryptocurrencies and people all around the world are becoming familiar with the benefits of digital currencies. The first-ever digital currency was launched back in 2009 and now in 2019, there are almost 5000 digital currencies in the cryptocurrency market.
Cryptocurrency trading refers to the practice of speculating on digital currency price movement through buying and selling underlying coins via exchange or through CFD trading accounts. There are several virtual currencies available on multiple exchanges that you can buy, trade, or sell. This article will provide you a real insight into the world of cryptocurrency and help you to understand how cryptocurrency trading is a better investment opportunity?
CFD trading on cryptocurrencies
CFDs are considered derivatives, which enable traders to speculate on digital currency price movements without exactly buying the digital currency. You did not become the owner of the digital currency when you got involved in CFD trading, instead, you just earned from the high and lows of the market.
You do not need to have a digital or hardware wallet if you want to earn through CFD trading. You can go long (buy) if you think that digital currency will rise in value, or short (sell) if you think the value will fall.
Both are considered leverage products as you only need to put up a small deposit which is known as margin in order to gain full exposure to the underlying market. The level of profits and loss are calculated according to the size of your position, so leverage will affect both profits and losses.
Buying and selling cryptocurrencies via an exchange
If you are willing to buy digital currencies via an exchange, you will become the owner of the coins. Create an account, then put up the value of the asset to open a position, and store the digital currency token in your wallet until you decide to sell. Most of the exchanges have limits on how much you can deposit and accounts are quite expensive to maintain.
There are numerous cryptocurrency platforms where you can easily buy cryptocurrencies, but you need to have a digital wallet. Not all virtual currencies are lucrative, it would be better if you do some research before finalizing the purchase of cryptocurrency.
What moves the cryptocurrency market?
The cryptocurrency market moves according to demand and supply mechanisms. The digital currency markets are decentralized and tend to remain free from many of the political and economical concerns that affect traditional currencies. No government or centralized body has the authority to directly interface in the movement of the cryptocurrency market.
Few other factors can have a significant impact on cryptocurrency prices. The total number of coins circulating in the market and the rate at which they are released lost or destroyed also affect the market movement. Market capitalization is another major factor that influences the price of digital currencies.
The Media also plays an integral role in shaping the image of digital currencies, plus the level of coverage and attention the digital asset is getting also determines the position of a cryptocurrency in the market.
The capability of a cryptocurrency to easily integrate into existing e-commerce payment systems also determines the worth of underlying digital assets. Like stocks and commodity markets, crypto market prices are also heavily influenced by major events such as security breaches, economic setbacks, and regulatory updates.
Benefits of trading cryptocurrencies
The high volatility is something that makes the existence of cryptocurrencies attractive and exciting. Unlike stocks and commodity markets, digital currency markets are very difficult to predict as the prices keep speculating with no specific pattern.
This is something that makes cryptocurrencies an attractive investment opportunity, the price surge rapidly within days. You can become rich overnight if you invest in the right cryptocurrency and at the right time. Plus, Unlike commodity markets, crypto markets are open 24 hours a day. As compared to previous years, cryptocurrencies are now more quickly and easily converted into cash, without impacting the market price significantly.
It is recommended to consider CFD trading on cryptocurrency as it requires fewer formalities and you can earn a huge amount of profits if you invest with proper research and guidance. There are some worth considering trading platforms like “The News Spy” which specializes in CFD trading.