Types of Trades You Can Perform in Cryptocurrencies
It has been more than a decade since the cryptocurrency industry has been around. However, it was only in the past couple of years when the cryptocurrency industry became the most adopted online trading asset in the entire online trading industry with many trading tools. The platform has been gaining a lot of popularity and recognition all over the world and has been hitting all-time highs with respect to its market capitalization.
When we think about cryptocurrencies, the first thing that comes to mind is cryptocurrency mining. Although this option is always there but the cryptocurrency industry is way advanced than it used to be in the past. The industry has grown enormous and ever since the first cryptocurrency exchange was formed, the users have the ability to perform trades through cryptocurrencies.
Two Major Types of Crypto-Trading
There are currently two major types of cryptocurrency trading that the users can choose to trade-in. The decision of going for the right trading option is completely up to the user’s discretion as to what they want exactly. The trading types fulfill two different types of needs/conditions in when the traders wish to trade.
Traditional Cryptocurrency Trading
This is the basic trading type that is currently more popular than the rest of the major or minor crypto-trading types in the market. Traditional cryptocurrency trading is almost similar to foreign exchange (FX) trading where the investors choose trading pairs for fiat currencies and here, they choose cryptocurrency pairs against other cryptocurrencies or fiat currencies.
While forex trading offers only around 70 currency pairs for trading cryptocurrency trading offers more than 8,000 types of trading pairs to the investors within the crypto-industry. Then there are trading options available for cryptocurrencies against major fiat currencies. You can learn more in this regard at Winbitx.
Similar to forex trading, an investor can choose the cryptocurrency they think would be best for trading in. The users can choose a particular cryptocurrency and then keep it under their possession until the price of the cryptocurrency matures. That is when the users can sell the particular cryptocurrency and earn profit against the price difference between buying time and selling time.
If you are interested in going for the traditional trading, then some of the suggested cryptocurrencies are Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Binance Coin (BNB), Ripple (XRP), and many more.
Contract-For-Difference (CFD) Cryptocurrency Trading
This is a newer kind of trading option that has been introduced for the online trading community. The contract-for-difference (CFD) option has been introduced by the cryptocurrency exchanges for the users so they can avail as much as they can from the cryptocurrency markets.
The major difference between traditional crypto-trading and the CFT crypto-trading is that in traditional crypto-trading, investors are required to purchase cryptocurrencies. On the other hand, the CFD trading option does not require for the investors to purchase actual cryptocurrencies.
Instead, the investors can choose a particular cryptocurrency, set the amount they want to put on it, and predict whether the price of the cryptocurrency will be high or low at a particular date, and time. If the decision goes into the investors’ favor, they end up making a profit on it.
This way, the investors do not have to spend a lot of money and then wait for the price of the particular cryptocurrency to go up so it can be sold to make profits. Through CFD trading, the money can be made instantly and one does not have to worry about purchasing and then holding on to the cryptocurrencies.
Make Up Your Mind
Despite being an attractive industry, cryptocurrencies are still part of the online trading platform. This automatically makes cryptocurrencies a risky instrument and this is the reason why one needs to be vigilant and alert when doing trades through cryptocurrencies.
One must always go through all the possibilities of losses and profits before reaching out to their bank accounts and start investing money. Things definitely sound very simple and easy when they are in a theoretical format, but one must always know that when it comes to being practical, things tend to become difficult.