However, before you get started, it is important to consider whether you will speculate on the prices of digital assets or buy them. So, if you are interested in cryptocurrency trading, take a look at five key advantages of trading CFDs on cryptocurrencies.
1. Volatility in the Cryptocurrency Market
The cryptocurrency market is highly volatile, especially due to the bulk amount of short-term speculative interests. Prices of cryptos can fall or rise significantly within a short span of time. And this volatility makes cryptocurrency trading more exciting. Rapid changes in prices intraday can pave for lucrative investment opportunities to go short or long. However, frequent market fluctuations come with increased risks as well. Therefore, you should consult an expert trading partner to make a wide trading decision at the right time.
2. Flexibility to Go Short or Long
When you trade in a cryptocurrency, you are actually buying the digital assets upfront with the speculation of an increase in value. However, when you trade on the asset’s price, you get the flexibility to leveraging the market that is rising or falling. This is referred to as going short in cryptocurrency trading. You can also choose to go long, depending on the market conditions and volatility.
3. Improved Liquidity
How easily and quickly you can convert a cryptocurrency into fiat money, without affecting its market price, is called liquidity. This is an important factor because it aids in improved accuracy, faster transactions and better pricing. Typically, the crypto market is regarded as illiquid. This is because the trading transactions are widely spread across different exchanges. That means smaller trades may have a remarkable impact on the market prices of the cryptos. This is one reason why the crypto market is so volatile.
However, when you trade in cryptocurrency CFDs with a recognized banking institution, you can leverage the benefit of improved liquidity. A good trading partner will get the best prices from multiple sources. That means the trading transactions are likely to be implemented quickly and at much lower costs.
4. Ability to Trade 24/7
Another advantage of cryptocurrency trading is the ability to trade in cryptos 24 hours and seven days in a week. Since crypto transactions are undertaken directly by individuals and through cryptocurrency exchanges across the world, there is no centralized body governing the market. So you can keep a tap of the market fluctuations and trade at any time of the day at your convenience.
However, at times, you may face downtime – particularly when the market is adjusting to “forks” or infrastructural updates.
5. Open Your Crypto Trading Account Faster
To trade in cryptocurrencies, it is important to buy and sell through an exchange. This requires you to create an account and have your own digital wallet. Only an experienced and reliable crypto trading partner can make this process fast and hassle-free.
To start trading cryptocurrencies
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