When you decide to start trading cryptocurrencies, it is vital to learn how it works because the crypto market operates differently from other financial markets. As digital currencies continue to infiltrate forex trading, you need to watch out for the latest forex news, including bitcoin news to learn more about earning cryptocurrencies and its trends.
Are you wondering if you can get rich doing forex trading? Make sure you read a guide from expert traders at Global Prime.
Understanding Cryptocurrency Trading
Cryptocurrency trading is a process in which speculation on cryptocurrency price-movements via a CFD trading account is done. It also includes buying and selling the underlying coins via an exchange. In simple terms, cryptocurrency trading is the exchange of cryptocurrencies like in the forex. It also allows you to buy and sell cryptocurrency for another, such as Bitcoin and Litecoin. Some types of cryptocurrencies include; Altcoin, Ethereum, Ripple, Stellar, and many more.
There are several benefits of cryptocurrencies trading such as;
- Volatility
- Easy cross border trading
- One-to-one 24/7 Service
- Easy Credit accessibility
- No Transaction Fees
- Security
Volatility
Volatility is the wide swings in price and heavy trading or the currency fluctuations in the global foreign exchange market. It is the rate at which the market price of a security fluctuates such as when all the orders placed are all bought and there are no or few sales.
Though the rapid price movements come with increased risk, it provides an opportunity for traders to go long (buy) and short (sell). With a carefully researched strategy and a brilliant risk management plan in place, you can successfully do cryptocurrency trading.
Easy Cross Border Trading
Cryptocurrencies are not subjected to exchange rates, interest rates, transaction charges, or other levies imposed by a specific country. When you use the peer-to-peer mechanism of blockchain technology, cross border transfers, and transactions can be done without being subjected to currency exchange fluctuations. Cryptocurrency trading helps you conduct international businesses more quickly than most other financial trading platforms.
One-to-one 24/7 Service
Cryptocurrency trading gives you access to a 24-hour service a day, seven days a week because there is no centralized governance of the market. Cryptocurrency trades all over the world and takes place directly between transacting parties.
Brokers, agents and legal representations found in traditional business dealings add unnecessary costs on your transactions. With Cryptocurrency trading, you do not incur brokerage fees or commissions. There are no middlemen, stressful paperwork, or unusual conditions added to your purchase.
The one-on-one transaction makes auditing easy and has greater accountability. Since the two parties have information about each other, there is no confusion about who pays and how much.
Credit Accessibility
Cryptocurrency trading relies on digital data transfer with the internet , facilitating the trade in cryptocurrencies. Estimations across the world reveal that there are more people with access to the internet and mobile devices that don’t have access to traditional banking systems. Cryptocurrency trading allows you to access credit at any location on your mobile device as long as you have a viable connection.
No Transaction Fees
Traditional banking systems and credit card companies charge you for writing cheques and transferring funds. Cryptocurrency transaction mining charges are paid for by the cryptocurrency network involved. The miners are paid for verifying the block on the web, which contains your particular transaction. A note to remember is that you may incur some external fees if you include the services of third-party management services to maintain your cryptocurrency. You will, however, note that it is still a lot less than the charges incurred by traditional banking systems.
Security
Cryptocurrency trading employs secure encryption techniques throughout the blockchain cryptocurrency transaction process. This security measure guarantees your consumer privacy and safeguards your account from fraud and hacking. Unlike credit card companies that have a “chargeback” or Cryptocurrency transfer is not reversible once it has been authorized. That helps avert fraud and enables you to revise your seller-buyer agreement regarding refunds in the event of an erroneous transfer.
Conclusion
Cryptocurrency trading is purely a digital trading platform as opposed to the more traditional methods of exchange such as cash or credit cards. Its ownership exists only as a shared digital record stored on a digital register of recorded data known as a blockchain. When you send cryptocurrency units to another user, you send it directly to that user’s wallet. When a user confirms receipt of the transaction, it is added to the blockchain, thus creating new cryptocurrency tokens. This makes it more secure than other forms of transactions of valuable traded commodities. That fact has made it the most preferred among tech enthusiasts as chances of fraud are greatly reduced.
