The cryptocurrency market is experiencing unparalleled 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 on 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 crypto 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 all of them have as strong an “aura” or history as bitcoin, ethereum, litecoin or solana.
Moreover, recent history shows how the advent of cryptocurrencies remains a volatile universe; this despite an increasingly obvious correlation with the traditional financial markets, in particular the Nasdaq.
How does cryptocurrency trading work?
Most platforms will allow you to buy and sell cryptocurrencies through CFDs, which are derivative products allowing you to carry out 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 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 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 get started in cryptocurrency trading, it is strongly advised to opt for a trustworthy exchange platform with a solid reputation that has been operating on the French market for a few years, and equipped with all the approvals of the supervisory authorities.
It’s this cryptocurrency trading platform which will allow you to secure your trades over time. It is therefore necessary to analyze, before launching, the fees charged by the platform, the pairs that are supported, the trading tools offered, the means deployed for security, etc.
Getting started in cryptocurrency trading: How to do it?
To invest in cryptocurrency, there are two kinds of investors:
- Savers who think “long term” and wish to diversify their wealth over time, without needing to trade intra-day.
- 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 possibility of opening a single account in a few minutes with the possibility of trading online instantly.
It is also better to opt for a holistic broker that allows you to trade cryptocurrencies in the same day by allowing you to make gains, regardless of whether prices are headed up or down. This methodology makes it possible to quickly dilute its risk and its return on investment.
What next for cryptocurrency trading?
There is still reluctance to trade on Cryptocurrencies, due to a context of novelty and sometimes a misunderstanding of the general public, faced with this news given decentralized financial and monetary system. Moreover, it still comes up against the mistrust of central banks and States.
Nevertheless, these digital currencies, totally independent of traditional banking players, 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 totally public way, all the transactions carried out on the different blockchains. Far from the image conveyed by certain financial or media players who would like to highlight its supposed opacity.
Nevertheless, if cryptocurrency has undeniable advantages, it remains a very volatile asset and is still a store of value, against traditional fiat currencies. But nothing says that one day the digital currency will replace (and perhaps faster than we think) the national currencies controlled by central banks.
Let us remember that crypto-currencies offer governments all the elements of traceability 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, up-to-date user reviews, the latest technologies, as well as trading simulators, which will allow you to improve your skills over time, in terms of trading.