Cryptocurrency trading is the act of
speculating on cryptocurrency price movements via a CFD trading account,
or buying and selling the underlying coins via an exchange.
CFD trading on cryptocurrencies
CFDs trading are derivatives, which enable you to speculate on
cryptocurrency price movements without taking ownership of the
underlying coins. You can go long (‘buy’) if you think a cryptocurrency
will rise in value, or short (‘sell’) if you think it will fall.
Both are leveraged products, meaning you only need to put up a small
deposit – known as margin – to gain full exposure to the underlying
market. Your profit or loss are still calculated according to the full
size of your position, so leverage will magnify both profits and losses.
Buying and selling cryptocurrencies via an exchange
When you buy cryptocurrencies via an exchange, you purchase the coins
themselves. You’ll need to create an exchange account, put up the full
value of the asset to open a position, and store the cryptocurrency
tokens in your own wallet until you’re ready to sell.
Exchanges bring their own steep learning curve as you’ll need to get to
grips with the technology involved and learn how to make sense of the
data. Many exchanges also have limits on how much you can deposit, while
accounts can be very easy to maintain and make profits off them over a
long period of time.