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When it comes to trading cryptocurrencies, you have to speculate on whether the market you choose will go up or down in value. And the interesting thing is that you never own the digital asset. In fact, derivative products such as CFDs are traded. Let’s take a look at the benefits of trading cryptocurrencies. Read on to find out more.
volatility
While cryptocurrency is a new market, it is quite volatile due to short-lived speculative interest. Bitcoin price fell from $ 19,378 in 2018 to $ 5851 in just one year. However, the value of other digital currencies is quite stable, which is good news.
What makes this world so exciting is the volatility of the value of the cryptocurrency. The price movements offer traders many options. However, this is also associated with a high level of risk. So if you choose to explore the market, just make sure to do your research and put together a risk management strategy.
opening hours
Usually the market is open for trading 24/7 as it is not regulated by any government. In addition, the transactions between buyers and sellers are carried out all over the world. There may be brief downtimes with the infrastructural updates.
Improved liquidity
Liquidity refers to how quickly a digital currency can be sold for cash. This feature is important as it enables faster transaction times, better accuracy, and better prices. In general, the market is illiquid as the financial transactions take place on different exchanges. Hence, small trades can bring about big changes in prices.
Leveraged exposure
Since CFD trading is a leveraged product, you can open a position on what is known as “margin”. In this case, the value of the deposit is a fraction of the commercial value. So you can enjoy an excellent market presence without investing a lot of money.
The loss or gain reflects the value of the position at the time it was closed. So when you trade on margin, you can make huge profits by investing a small amount of money. However, it also amplifies losses that can exceed your deposit on a trade. So make sure you consider the total value of the position before investing in CFDs.
It is also important to make sure that you are following a solid risk management strategy that should include appropriate limits and stops.
Fast account opening
If you want to buy cryptocurrencies, make sure you do it through an exchange. All you have to do is sign up for a switching account and keep the currency in your wallet. Keep in mind that this process can be limiting and can take a lot of time and effort. However, once the account is created, the rest of the process is smooth and hassle-free.
In short, these are some of the most outstanding advantages of trading cryptocurrency right now. Hopefully you find this article very helpful.