When trading cryptocurrencies, you need to speculate on whether the market you have chosen will go up or down in value. And the interesting thing is that you never own a digital asset. In fact, trading is done with derivative products like CFDs. Let’s look at the benefits of cryptocurrency trading. Read on to find out more.
Volatility
Although cryptocurrency is a new market, it is quite volatile due to short-term speculative interest. The price of Bitcoin dropped to $ 5851 in 2018 from $ 19,378 in a single year. However, the value of other digital currencies is relatively stable, which is good news.
What makes this world so exciting is the volatility of cryptocurrency value. Price movements offer many opportunities for traders. However, this carries many risks. Therefore, if you decide to explore the market, make sure you do your research and put in place a risk management strategy.
Business hours
Usually, the market is open for 24/7 trading because it does not regulate any government. In addition, transactions are made between buyers and sellers around the world. There may be short stops when infrastructure updates are made.
Improved Liquidity
Liquidity indicates the extent to which a digital currency can be sold in cash. This feature is important because it allows for faster transaction times, better accuracy, and better pricing. In general, the market is illiquid because financial transactions take place in different exchanges. Therefore, small trades can lead to large price changes.
Leveraged exposure
Since CFD trading is considered a leveraged product, you can open a position in what we call “margin”. In this case, the value of the deposit is part of the trade value. So you can enjoy a great exposure to the market without investing a lot of money.
The loss or gain will reflect the value of the position at the close. Therefore, if you trade margin, you can make big profits by investing a small amount of money. However, it also increases the losses that can exceed your deposit in a trade. Therefore, make sure that you consider the full value of the position before investing in CFDs.
It is also important to ensure that you follow a robust risk management strategy, which should include appropriate limits and stops.
Quick account opening
If you want to buy crypto currency, make sure you do it through an exchange. All you have to do is sign up for an exchange account and save it in your wallet. Keep in mind that this process can be time consuming and requires a lot of time and effort. However, once the account is created, the rest of the process will be fairly smooth and hassle-free.
In summary, these are some of the major benefits of cryptocurrency trading here and now. Hopefully, this article will be quite helpful to you.