When it comes to trading cryptocurrencies, you need to consider whether your chosen market will rise in price up or down. And most interestingly, you never own a digital asset. In fact, trade is done with derivative products such as CFDs. Let’s take a look at the benefits of cryptocurrency trading. Read on to learn more.
While cryptocurrency is a new market, it is quite volatile due to short-term speculative interest. The value of bitcoin in just one year dropped to $ 5,851 from $ 19,378 in 2018. However, the value of other digital currencies is fairly stable, which is good news.
What makes this world so exciting is the variability in the value of cryptocurrency. Price movements offer many opportunities for traders. However, it also carries a lot of risk. So if you decide to study the market, just make sure you research and compose a risk management strategy.
Hours of operation
Usually the market is open for trading 24/7 as it is not regulated by any government. In addition, transactions are made between buyers and sellers around the world. There may be slight downtime during infrastructure upgrades.
Liquidity means how quickly a digital currency can be sold for cash. This feature is important because it allows you to speed up transaction time, increase accuracy and increase prices. As a rule, the market is illiquid, as financial transactions take place on different exchanges. Thus, small deals can lead to big changes in prices.
Exposure with debt exposure
Because CFD trading is considered a product of borrowed funds, you can open a position regarding what we call “margin”. In this case, the value of the deposit is a fraction of the trade value. This way, you can enjoy great exposure to the market without investing a lot of money.
A loss or gain will reflect the value of the position at the time of its closure. So if you trade on a margin, you can make a huge profit by investing a small amount of money. However, it also increases losses that may exceed your deposit in trading. So make sure you consider the total cost of the position before investing in the CFD.
It is also important to make sure you follow a solid risk management strategy, which should include appropriate restrictions and stops.
Quick account opening
If you want to buy cryptocurrencies, make sure you do so through an exchange. All you need to do is sign up for an exchange account and keep the currency in your wallet. Keep in mind that this process can be restrictive and time consuming and labor intensive. However, once the account is created, the rest of the process will run smoothly and without complications.
In short, these are some of the most well-known benefits of cryptocurrency trading here and now. I hope you find this article very helpful.