Crypto trading, or cryptocurrency trading, is simply the exchange of cryptocurrencies. Like in Forex, you can also buy and sell a cryptocurrency for another, like Bitcoin or altcoin for USD and Euro. This is one way of getting involved in the world of cryptocurrencies without having to mine it.
Types of Cryptocurrencies
Created in 2009, Bitcoin is considered to be the most popular cryptocurrency. Bitcoin uses peer-to-peer technology for decentralized control, allowing it to operate without any central authorities or banks. The core component of Bitcoin is the blockchain, a digital public ledger of all transactions.
In 2011, the Litecoin was created as a nearly identical cryptocurrency to Bitcoin but with faster processing speed, thanks to its adoption of the Segregated Witness and Lightning Network and other improvements.
Ethereum, though younger by two years, has surpassed Litecoin in popularity and is now the most used cryptocurrency behind Bitcoin. Ethereum also boasts faster processing speeds thanks to smart contracts, digital "if-then" agreements.
Margin and Leverage in Crypto Trading
In margin trading, you will borrow buying and selling power in exchange for allocation of a part of your funds (the margin) which will only be accessible again after a trade, when you return the capital you borrowed.
Leverage trading, on the other hand, allows you to trade an amount that you don’t have. Crypto trading services normally offer a leverage of 1:10. This means that for every dollar you have, you get 10 dollars of buying power. This means bother higher risk and higher potential reward.
Cryptocurrency CFDs (Contracts for Difference)
NatureForex offers Bitcoin, Litecoin, and Ethereum CFDs that lets you trade cryptocurrency without owning coins. Crypto CFDs are contracts between buyers and sellers, wherein sellers pay buyers the difference between the current value of crypto assets and their value at the end of the contracts.
Crypto CFDs, though more costly and are less private, offers credibility and simplicity of use for traders who aspire to make money off cryptocurrencies.
Start crypto trading with NatureForex now!