When Bitcoin became the first Cryptocurrency launched on the market in 2009, it could not be thought that it was going to be the only currency with which it could be negotiated, in fact, two years later more Cryptocurrencies had already been created with which You can negotiate. Today, it is estimated that there are more than 1,500 cryptocurrencies in the market.
Trading today with the Cryptocurrencies is very simple, you exchange one currency for another, hoping that the currency you buy increases in value quickly. It is the same concept of the stock market in the real world. The most common exchange platforms for each transaction charge 0.1% commission (approximately).
This trade has become popular very quickly, they are billions of dollars in coins are bought and sold daily. When people trade they use the exchange platform of the Cryptocurrency, and this is so that buyers and sellers can match, it means that, if you have Bitcoin and want to sell it by Ethereum, the exchange platform will help you find a seller of Ethereum so you can make the transaction.
What is Cryptocurrency trading?
After all the above, we can define more clearly what is meant by the trading of the Cryptocurrencies: it is the process of exchange of purchase and sale of virtual currencies, the existence of more than 1,500 coins in the world besides Bitcoin is what has become a very interesting business for those who already came with knowledge of trading issues in the stock market, as they can use the variants of the value of each of these currencies and generate higher income, so the comparison with the stock market, in which you buy shares at a certain price and the idea is to sell them at a higher price to generate profits, in this case it is the same process but with Cryptocurrencies.
What are cryptocurrencies?
They are virtual currencies through which you can make exchanges of purchase and sale of products and services, change it to the currency of your country and make any type of transaction on the internet with the most famous virtual currency at this moment such as Bitcoin, everything can be done without the participation of traditional banking and without the need for the physical presence of those involved in the transaction.
About the trading process of the Cryptocurrencies
In the previous article entitled Tips on trading of Cryptocurrencies, what is it and how does it work? We talk about everything related to the Cryptocurrency trading process, was explained in detail, however, we will expand a little further what refers to the trading operation which is one of the financial transactions that most participants are currently winning.
How is the Cryptocurrency trading?
Operating with cryptocurrencies is an act of studying around the movements of cryptocurrency prices, through a CFD trading account or the purchase and sale of the underlying cryptocurrencies in a trading market. When you buy Cryptocurrency through the trading market, you are acquiring cryptocurrency.
To do this you have to create your own account in the trading market, provide the value of the asset for the opening of the position and store the tokens of the Cryptocurrencies in your wallet until you consider that it is the opportune moment for its sale. These markets are decentralized, which means that cryptocurrencies are not issued or endorsed by any bank or government. Instead, they are managed through a computer network, however, they can be bought and sold in trading markets and stored in portfolios.
The CFD trading of the Cryptocurrencies
CFD trading is a way of short-term investment, they are derivatives that have several underlying assets such as exchange rates, indices, bonds, futures, stocks and commodities. Then the CFD is a derivative, which allows you to speculate with the movements of the prices of the Cryptocurrency, without you being the owner of the underlying cryptocurrency.
CFDs are leveraged products, meaning that you only need to make a small initial deposit, which is known as a margin, and thus you get a full exposure to the underlying market. Your profits and losses are calculated taking into account the full size of the position, so that the leverage magnifies both your profits and losses.
What do you think about this topic? Did you know the operation of cryptocurrency trading?
If you want more information about buying and selling cryptocurrencies you can contact us or write your question in the bottom part (comments section).
Image of PIX1861 via Pixabay.com under creative commons license.