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Where can I trade cryptocurrencies?
If you ever ask yourself, “Where can I trade cryptocurrency?” This is the right article for you. We will outline the main options available when it comes to cryptocurrency trading, as well as considerations to be made before opening a trading account.
What is your motivation for trading cryptocurrency?
In order to decide where to trade, we first need to take a look at your motivations. For example, if your goal is to buy the actual underlying cryptocurrency and hold it for the long-term, you will need a wallet to store your currency and you will need to work with an exchange where you can buy it. If you plan to trade cryptocurrencies by speculating on their price movements without buying the actual asset, then a CFD provider like Plus500 might be an option you want to explore.
To buy or trade cryptocurrency?
There are two main motives for buying, selling and exchanging cryptocurrencies. The first impulse is if you believe in the long-term future of this asset class and if you want to be exposed to the inevitable rise or fall in the prices of cryptocurrencies as they are more commonly used.
The second incentive is if you want to use it as an alternative to fiat currency. For example, Bitcoin and Litecoin are designed to pay for everyday goods and services the way we use dollars, euros or pounds today.
Cryptocurrencies are relatively volatile, especially when compared to traditional asset classes such as forex pairs or commodities. Cryptocurrency trading allows the trader to take advantage of this volatility. The average daily volatility of the cryptocurrency market is several times higher than that of traditional assets, which provides short-term traders with a much greater opportunity to earn money. But of course, the flip side to this is that bigger price moves can also mean bigger losses for traders. Those traders who are confident that they will often get it right are willing to take the risk and see the volatility of the cryptocurrency as an opportunity.
What are my cryptocurrency trading options?
An actual cryptocurrency can only be bought and sold on a cryptocurrency exchange, whether for long-term or short-term buying and selling. However, any type of buying and selling of assets can be considered as “trading”.
The term “trading” is commonly applied to the practice of repeatedly buying and selling to take advantage of changing price trends – ie the classic “buy low/sell high” pattern. In the modern financial markets, CFD trading also allows you to trade down prices by taking “short” positions.
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Cryptocurrency exchange If you want to “trade” cryptocurrency as a long-term investment, you will have to open an account on a cryptocurrency exchange. You will then be able to purchase units of your chosen cryptocurrency online, transfer them to your crypto wallet for safekeeping and return to the exchange when you want to sell.
CFD Trading Platforms
Alternatively, if you want to “trade” cryptocurrencies in shorter time frames, your best option is to open an account with a CFD provider, such as Plus500. CFDs are short-term speculative products, so cryptocurrency CFD trading is not suitable for those who want to invest in the long-term.
The difference here is that when you trade cryptocurrencies via CFDs, you are not actually buying and selling the cryptocurrencies themselves, but you are opening buying and selling positions to speculate on their price movements. This has several major advantages if you want to trade on short-term price swings.
If you buy and sell physical cryptocurrency, you must pay an exchange fee. If you buy and sell regularly, these fees can very quickly cancel out a lot of your profits or increase your losses if you get your timing wrong. It also takes some time to confirm buying and selling cryptocurrencies, so you won’t be able to trade quickly if you want to, while with CFDs for cryptocurrencies you can open new trades relatively quickly based on how you think about the market. Moving.
CFD trading platforms often compensate for their services through market spreads, which is the difference between the buying and selling price of a financial instrument. The spreads are usually lower in value than the exchange fees, as CFDs are designed for “day trading” and traders are expected to make several trades in a single day. There are fees and other fees that may apply when trading CFDs, depending on the provider. You should check the applicable fees before deciding on a provider.
CFD positions can be opened and closed almost instantly, so traders can quickly benefit from market volatility. In addition, as mentioned earlier, contract trading
