The cryptocurrency market is experiencing unprecedented growth and is an asset class now worth trillions of dollars. As with stocks or ETFs, success in cryptocurrency trading is the result of extensive research, rational decisions and realistic approaches to finding the best entry points.
Reminder about the nature of cryptocurrencies
A cryptocurrency is a digital currency that operates outside the classical circuits traditionally controlled by central banks such as the European Central Bank (ECB) or the US Federal Reserve (FED). An active crypto can be traded, just like any fiat currency.
Today, with the exponential development of blockchain, there are a multitude of cryptocurrencies available in the trading market. But not all of them have such a strong “aura” or history as bitcoin, ethereum, litecoin or solana.
Moreover, recent history shows how the rise of cryptocurrencies remains a volatile universe; this despite an increasingly obvious connection with the traditional financial markets, especially Nasdaq.
How does cryptocurrency trading work?
Most platforms allow you to buy and sell cryptocurrencies through CFDs, which are derivative products that allow you to perform your speculative operations on the cryptocurrency that interests you. In other words, you are not the owner of the cryptocurrency itself, which is only the underlying.
CFDs are of interest to well-informed traders because they are vehicles that allow them to use the leverage effect that allows them to position themselves in the “crypto” market by investing only a fraction of the invested capital. The direct result of these financial products is that they will allow you to increase your gains quickly, but also to increase your losses if you have bet against the direction of the market.
Where to trade cryptocurrencies?
To start trading cryptocurrency, it is strongly recommended to choose a reliable exchange platform with a solid reputation, which has been operating in the French market for a few years and equipped with all regulatory approvals.
It is this cryptocurrency trading platform which allows you to secure your trades over time. It is therefore necessary to analyze, before launching, the fees charged by the platform, the pairs supported, the trading tools offered, the means implemented for security, etc.
Getting started with cryptocurrency trading: 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 intra-day.
- Investors who want to trade dynamically and who will need to use digital platforms like Metatrader 4 or Metatrader 5 to improve their performance.
Some trading platforms also allow you to open a single account in minutes with the ability to trade online immediately.
It is also better to choose a holistic broker that allows you to trade cryptocurrencies on the same day by allowing you to make gains whether the prices are going up or down. This method makes it possible to quickly dilute the risk and return on investment.
What next for cryptocurrency trading?
There is still reluctance to trade cryptocurrencies due to a context of novelty and sometimes a misunderstanding of the general public facing this news given decentralized financial and monetary system. Moreover, it still faces mistrust from central banks and states.
Nevertheless, these digital currencies, completely independent of traditional banking actors, attract all eyes due to their inviolability and their formidable transparency. Did you know that with a few clicks and in a completely public way, you can find all the transactions carried out on the various blockchains. Far from the image conveyed by certain financial or media actors who would like to highlight its supposed opacity.
Nevertheless, if cryptocurrency has undeniable advantages, it remains a highly volatile asset and is still a store of value compared to traditional fiat currencies. But nothing says that the digital currency will one day replace (and maybe sooner than we think) the national currencies controlled by the central banks.
Let’s remember that cryptocurrencies offer governments all the elements of transaction traceability. This is why some central banks are now considering modeling their new digital currencies on current cryptocurrencies.
Ultimately, 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 that will allow you to improve your skills over time in terms of trade.