If you want to enter into cryptocurrency trading, you need to think about whether you want to purchase or speculate on the digital assets’ pricing. Learn about the advantages of trading cryptocurrencies and why it is such a popular method of getting cash.

Why trade cryptocurrencies?

When you trade cryptocurrencies, you are speculating on the digital asset price decreasing or growing without having to own it. CFDs and other similar products are used to do this.
The following are some of the benefits of trading cryptocurrencies:

The volatility of cryptocurrencies

Despite the fact that the cryptocurrency market is still relatively new, it has seen tremendous volatility owing to short-term speculative interest. For example, from October 2017 to October 2018, the price of Bitcoin soared to $19,378 before plummeting to $5,851. Other cryptocurrencies are more steady, although new technology are typically accompanied by speculation.
On the other hand, the volatility of cryptocurrencies is what makes this market so intriguing. Intraday price activity provides a diverse set of trading options, both long and short, but at a higher risk. If you’ve chosen to start trading cryptocurrencies, make sure you have all the necessary knowledge and a risk management plan.

Cryptocurrency trading hours

Because there is no central body supervising cryptocurrencies, you may trade them 24 hours a day, seven days a week. On cryptocurrency exchanges all across the globe, transactions take occur between two parties. However, if the market responds to infrastructure changes or forks, downtimes may occur.
From 5:00 a.m. on Saturdays until 11:00 p.m. on Fridays, you may exchange cryptocurrencies for fiat money, such as the US dollar.

Higher liquidity

Liquidity refers to the speed with which a cryptocurrency may be changed into cash without impacting the market price. Liquidity is critical because it leads to better pricing, quicker trade execution, and more precise technical analysis.
Because transactions take place on several exchanges, cryptocurrencies have a reputation for being an illiquid market. This means that even tiny deals may significantly influence market values. That is one of the reasons why cryptocurrencies are so volatile.
When you trade cryptocurrencies, you may anticipate superior liquidity since we check prices on many exchanges on your behalf. This implies that your transactions will be done more often, quicker, and at a lower cost.

The ability to go long or short

When you acquire cryptocurrencies, you’re investing in the asset with the expectation that its value would rise over time. You may profit from both decreasing and growing prices if you trade on the price of the corresponding cryptocurrency. “Going short” is the term for this tactic.
Let’s imagine you’ve chosen to utilise a CFD account to create a short trade on the Ethereum price because you believe it will collapse. You benefit from this trade if you are correct, and the price of Ethereum decreases versus the US dollar. However, if the value of Ethereum rises in relation to the US Dollar, you will lose money.

Leveraged Exposure

CFDs enable you to open a margined position, which is a portion of the whole value of a transaction, since they are leveraged products. To put it another way, trading using leverage enables you to raise your market exposure many times over while only spending a small portion of your cash.
Your bitcoin position’s losses or gains will be computed based on the entire value of your position at the moment it was closed. As a result, leveraged trading allows you to generate more gains with a smaller initial investment. However, this might raise your losses to the point where they outweigh the initial deposit made for the transaction. As a result, before you begin CFD trading, it is critical to grasp the actual worth of the leveraged position.