Reminder about the nature of cryptocurrencies
A cryptocurrency is a digital currency that operates outside the classic circuits traditionally controlled by central banks such as the European Central Bank (ECB) or the American Federal Reserve (FED). An active cryptocurrency can be traded, like any fiat currency.
Nowadays, with the exponential development of the blockchain, there are a plethora of cryptocurrencies available in the trading market. However, not everyone has an “aura” or history as strong as bitcoin, ethereum, litecoin or solana.
Furthermore, recent history shows that the advent of cryptocurrencies remains a volatile universe; this despite an increasingly evident correlation with traditional financial markets, in particular the Nasdaq.
How does cryptocurrency trading work?
Most platforms will allow you to buy and sell cryptocurrencies via CFDs, which are derivative products that allow you to make your speculative trades on the cryptocurrency you are interested in. In other words, you are not the owner of the cryptocurrency itself, which is just the underlying.
CFDs are of interest to well-informed traders because they are vehicles that allow them to use leverage by allowing them to position themselves on the “crypto” market by investing only a fraction of the capital invested. The direct result of these financial products is that they will allow you to quickly increase your earnings but also increase your losses if you have bet against the direction of the market.
Where to trade cryptocurrencies?
To start trading cryptocurrencies, it is highly recommended to opt for a reliable exchange platform with a solid reputation that has been operating on the French market for a few years and has all the approvals of the supervisory authorities.
And this cryptocurrency trading platform which will allow you to protect your operations over time. It is therefore necessary to analyze, before launch, the fees charged by the platform, the supported pairs, the trading tools offered, the means used for security, etc.
Start trading cryptocurrencies: how to do it?
To invest in cryptocurrency, there are two types of investors:
- Savers who think “long term” and want to diversify their wealth over time, without having to trade intraday.
- Investors who wish to trade dynamically and who will need to use digital platforms such as Metatrader 4 or Metatrader 5 to improve their performance.
Some trading platforms also offer the ability to open a single account in minutes with the ability to trade online instantly.
It is also better to opt for a holistic broker that allows you to trade cryptocurrencies on the same day allowing you to make profits, regardless of whether the prices are up or down. This methodology allows you to quickly dilute your risk and your return on investment.
What future for cryptocurrency trading?
There is still reluctance to trade Cryptocurrencies, due to a context of novelty and sometimes a misunderstanding of the general public, in the face of this. news given decentralized financial and monetary system. In addition, it still clashes with the distrust of central banks and states.
However, these digital currencies, totally independent from traditional banking operators, attract all eyes, due to their inviolability and their formidable transparency. Did you know that you can find in a few clicks and in a completely public way, all the transactions made on the different blockchain. Far from the image conveyed by certain financial or media operators who would like to highlight the alleged opacity.
However, while cryptocurrency has undeniable advantages, it remains a very volatile asset and is still a store of value, compared to traditional fiduciary currencies. But nothing says that digital currency will one day replace (and perhaps faster than we think) national currencies controlled by central banks.
Let’s remember that cryptocurrencies offer governments all the traceability elements of transactions. This is why some central banks are now considering modeling their new digital currencies on current cryptocurrencies.
In the end, if you are looking for an excellent cryptocurrency exchange platform, choose the one that will guarantee you optimal security, updated user reviews, the latest technologies, as well as trading simulators, which will allow you to improve your skills over time, in trading terms.
Article written by Bertrand Dubourg.