What is Cryptocurrency?
Since Bitcoin was launched, cryptocurrencies have gone on to attract many investors and traders. Having emerged onto the scene only as far back as 2009, they remain a relatively new kind of digital currency and are designed to work as a medium of exchange. Cryptocurrencies are based on a peer-to-peer system which allows them to be completely decentralized and independent from any government or central banks. In this way, participants can exchange money directly with each other with much lower transaction times, minimal fees and without the involvement of third parties such as banks during the transaction process.
Cryptocurrencies use cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Hence, the term”crypto” refers to the use of cryptography for security and verification purposes while transactions are taking place.
Cryptocurrency transactions are generally conducted via a blockchain network, effectively a joint bookkeeping process. As blockchains are designed to be decentralized, every computer connected to the network must successfully confirm the transaction prior to being processed which establishes a safer transaction for all concerned.
Although being the first cryptocurrency to have emerged, Bitcoin is not the only digital currency on the market. There are a range of others which are growing in market share and value and are worth considering. Some of the top ranking coins today besides Bitcoin include Litecoin, Ethereum, XRP and EOS.
How to Trade Cryptocurrency
Trading any type of currency including cryptocurrencies involves exchanging a currency you own into another currency and exchanging it back when the price changes with the purpose of making a profit. This is known as forex trading and usually takes place using online platforms.
Since cryptocurrencies came onto the market, many forex brokers have started offering their clients the opportunity to trade cryptocurrencies via CFDs. Without ever directly buying or selling cryptocurrencies, with CFDs, you can still trade on their value. Cryptocurrency trading works in exactly the same way as forex, but rather than buying and selling fiat currencies such as US dollars or the Euro, traders buy and sell cryptocurrencies, such as Bitcoin, Ethereum (ETH) or Litecoin.
Traders interested in the cryptocurrency market can adopt either a long or short term trading strategy. Those adopting a long term strategy will buy and hold cryptocurrencies over a long period of time, either weeks, months or sometimes years. This gives them time to scrutinise price trends over a long period and make informed decisions while avoiding the impact of short-term dips in value. This is an ideal strategy for traders who believe the value of a cryptocurrency will grow steadily over a long period and wish to avoid the stress of short-term value dips.
With a short-term trading strategy, a trader forgoes the stability of long-term trading for the chance of profiting from short-term price swings and involves buying and selling cryptocurrencies in the space of a few hours to a few days.
This strategy is suited to those who prefer the characteristic volatility of cryptocurrencies by getting in and out of trades quickly.
Advantages of Cryptocurrency Trading
With XBroker, you can access a wide range of CFDs on cryptocurrencies such as Bitcoin, Ethereum and Litecoin which allows you to benefit from the difference in price between the opening and the closing price without actually owning the underlying asset. CFDs allow you to open and close your positions in an instant since you do not own the underlying digital currency.
Another advantage of trading cryptocurrencies is that you have the potential to profit from both rising and falling markets and can trade 24/7 wherever you are located, even on a mobile device. Furthermore, cryptocurrencies are great way to diversify your portfolio, especially if you are concerned for example, about central bank monetary policy decisions on fiat currencies.
It’s a well known fact that cryptocurrencies can be highly volatile but the upside is that you can find some big moves in a very short period of time. Traders make profits when the price of the currency shoots upwards and because cryptocurrencies often experience large price movements, you can often make a lot of profit with a relatively small outlay.
With cryptocurrency trading, the exchange platform you use deducts a small percentage as commission for the service it provides. As the fees for transferring cryptocurrencies, usually by wallet payments, are less than credit card and bank transfer fees, cryptocurrency trading fees come in cheaper than forex trading fees.
Why Trade Cryptocurrencies with XBroker?
There’s no doubt that cryptocurrencies are here to stay and will have an even bigger impact on the world’s financial system. More people are using it and more businesses are accepting it and this increase in demand is this reason why price has soared in recent years.
Whatever the size of your investment, XBroker offers a wide range of cryptocurrencies, so there’s something to meet everyone’s trading requirements. With XBroker, you are best placed to benefit from a wide range of cryptocurrencies which continue to reach a high-level market share such as Ethereum and Litecoin!
Trading cryptocurrencies with XBroker opens the door to a multitude of potential profit-making opportunities! Here’s what you get to help you along your way:
- Traders Room: A place to manage your accounts.
- XBroker Exchange: A Digital Asset Exchange that provides advanced financial services to global traders using blockchain technology.
- MT5 Trading Platforms: Trade the instruments of your choice on XBroker MT5 available for both PC & MAC and mobile devices.
- Social Trading: Follow the leaders and copy their trading activity or get rewards by allowing others to copy your trades!
- MQL Trading Signals: Access to trading signals allows you to automatically copy the deals performed by other traders in real time.
- Crypto Accounts: Crypto accounts are trading accounts nominated in cryptocurrencies, digital assets that work as a medium of exchange.
- Crypto Wallets: Crypto wallets provide an easy way to send, transfer, exchange, store and receive Digital Currencies worldwide!