What is Cryptocurrency Trading?
The smart alternative to forex trading
Cryptocurrency Trading Overview
Trading cryptocurrency is the Foreign Exchange (Forex) of cryptocurrencies. With crypto trading, you can trade bitcoin and altcoin for USD and BTC. This is a new way to get involved in the Crypto-World! It requires no mining hardware, nor do you have to invest in bitcoin HYIPs or cloud mining (both of which always have a lot of risks involved).
Why trade cryptocurrency and not Forex?
1. Easier to Start
To start trading cryptocurrency and making money, you only need less than one hour (scroll down to see the “How-To” steps). To begin trading Forex, on the other hand, you need to open an account, which takes several weeks. Then, after this time period, the broker sends you the sign-up forms and access code. After that, it takes some days until you can transfer money from your bank account to your Forex Broker. The difference in time period makes trading crypto more attracted to people who don’t want to wait.
2. Smaller Spreads
One huge advantage crypto has over Forex is low spreads. A spread is the difference between the market’s ask and bid price of.
For example, if you analyse the spread of EUR/USD, you’ll see how this works. The ask and bid prices are 1.0933 for EUR and 1.0931 for USD (this data is from 27/02/2016). So, the spread is 0.0002. Percentage-wise, this is a spread of 0.018% (0.0002 divided by 1.0933).
Now, let’s take a look at the spread in bitcoin to USD. 1 BTC’s ask price is 429 USD. The bid price equals 428.999 USD (data obtained 27/02/2016), which equals a spread of 0.0002% or 0.001 USD (0.001 divided by 429).
So what does all this mean? With a smaller spread, you have incurred nex to zero loss. On the contrary, with Forex (fiat currency other than EUR/USD can sometimes have even higher spreads), after you exchange, there is already a loss of 0.018%. This amount is not insignificant.
Always remember to check your transaction fees with your broker.
Cryptocurrency CFDs (Contracts for Difference)
With Bitcoin and Ethereum CFDs, you can trade the cryptocurrency market without having to own any coins.
A cryptocurrency CFD is a contract between a buyer and seller. Typically, the seller pays the buyer the amount off the difference between the crypto asset’s current value and its value when the contract finishes. CFD certificates are useful for goods (derivatives) that are hard to store and own, such as barrels, gold, oil, and cryptocurrency.
There are both benefits and drawbacks to trading cryptocurrency over CFDs.
Check out one of the biggest Ethereum CFDs providers here.
Benefits and Disadvantages of Trading Crypto Assets Over CFDs
Two pros of using CFDs to trade cryptocurrencies are:
- Trust – Many CFD platforms have a lot of longevity, as they were established many years ago. Governments also regulate these platforms, which gives them a high level of safety and security when compared to cryptocurrency exchanges.
- Ease of Use– Usually, you are able to trade with fiat currency, with no e-wallet required.
Cons of using CFDs to trade crypto include:
- Higher Fees – These fees go up to 5%, which is much higher compared to typical cryptocurrency exchanges’ 0.5%. Many CFD platforms claim to have 0% fees, yet their spread between the purchase and sale price of the crypto certificate is so large that it doesn’t matter.
- Less privacy – When compared with normal crypto exchanges, you will be asked for way more information.
Markets.com™ is an example of a high-end crypto exchange platform.
Summary on cryptocurrency trading
Cryptocurrency trading is a great opportunity to make some money. Many crypto coins’ value quadruples in under a week. However, make sure that you are always cautious, as there are still fake coins, Ponzi schemes, and other scams out there.
If you’re conscientious and take advantage of the resources we provide to you, you will have a leg-up on people who don’t take this same path. We will help you detect crypto-coin scams, as well as, conversely, cryptocurrencies that could potentially skyrocket like Bitcoin. Our site helps you find the safest, most profitable places to trade crypto, all while giving you an advantage over others in the crypto market.
Lastly, remember to always be careful where you invest, and never invest what you can’t afford to lose.