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Crypto trading: what are cryptocurrencies?

November 2020

Cryptocurrencies are digital money, which represents a class of assets that do not exist in physical form but are created virtually through computer technology. When creating cryptocurrencies, cryptographic methods are used to protect the asset and all transactions which are conducted with it.

Since its inception in 2009, the opportunities and popularity of cryptocurrencies have grown significantly. Today, there are more than 1000 cryptocurrencies mined using special technologies and this process is still ongoing, as more and more digital currencies appear on the market.

Cryptocurrency trading has recently become a separate branch of business. Today, the total capitalization of all cryptocurrencies in the world is about $180 billion.

Features of cryptocurrencies

Cryptocurrency is a new type of asset that differs from conventional money and other financial assets that have become familiar to us. The peculiarity of cryptocurrencies is that you own this currency directly and for this, you do not need a bank or some kind of licensing authority. The cryptocurrency is stored in your electronic wallet and is mined using special computer equipment. Cryptocurrencies have characteristics that attract more and more investors. Some of the features of these digital currencies are:

Why cryptocurrency trading is gaining popularity?

Successful trading of any asset has one formula: buy low and sell high. Cryptocurrencies are no exception. They combine many characteristics that determine the features of the trading process. Cryptocurrencies are constantly becoming more and more popular, especially regarding the fact that they can be used as a way of paying.

Cryptocurrencies have also started to generate increased interest as alternative investments. Many people gain access to cryptocurrencies simply by investing money in them, that is, by buying real digital currency. However, this process can be quite slow. This may not fit into your financial plans and contradict your investment plans, given that buying a cryptocurrency requires a lot of investment.

To optimize cryptocurrency trading and make it as accessible as possible, such a trading instrument as a CFD on cryptocurrencies was introduced into use.

Cryptocurrency cfd trading

Trading CFDs on cryptocurrencies is a new way to trade in this volatile and at the same time interesting market. For example, cryptocurrencies are known for their fast price movements. Cryptocurrencies are highly volatile instruments that gain in value as they become more widely adopted. The main advantage of trading CFDs on cryptocurrencies is that traders can pursue results both in the case of a fall in the value of the instrument and the case of its growth.

These price fluctuations make CFDs a particularly suitable financial product for trading cryptocurrencies. Trading CFDs on cryptocurrencies is also attractive because traders do not need to invest in a real asset. The main thing is to decide in which direction the price of the tradeable cryptocurrency will go. Cryptocurrency CFD trading allows for very fast transactions, which is a serious advantage in such a volatile market.

Key reasons to trade cryptocurrencies via CFDS

Cryptocurrency CFD trading is a valuable experience as it allows you to transact with the most innovative asset class in the world. At the same time, you can use the cryptocurrency market as efficiently as possible, without the need to create a digital wallet or to use cryptocurrency exchanger.

Trading CFDs on cryptocurrencies has a lot of positive aspects, among which are:

Cryptocurrencies as a way to diversify investments

Diversification is the key to any good investment strategy. For investments in cryptocurrency, this is also relevant. There is no need to invest all your money, for example, in Bitcoin just because it is popular. There are thousands of options and it is best to spread your investment across multiple currencies.

Successful traders recommend creating your diversified and expanded portfolio, and cryptocurrencies can be a useful volatile asset for any balanced trading portfolio. The inclusion in the portfolio of assets of various types and levels of risk is one of the key principles of risk management.

Anyway, the cryptocurrency market is volatile, so you will likely have to face dramatic price fluctuations. Cryptocurrency CFD trading is trending right now, but it is important to remember that investing in something new sometimes comes with difficulties that you need to be prepared for. At the same time, according to some forecasts, cryptocurrencies will flood all global markets in the next five years. Therefore, it is worth preparing for future financial changes in advance.

Analysis of cryptocurrency charts

Correct trading starts with knowledge. A trader needs to know how, where, and when to invest. In the cryptocurrency market, it is also worth taking this information into account. You can follow the dynamics of cryptocurrency price movements using special charts.

The price of cryptocurrencies moves according to special laws that are traced by human psychology. For example, someone is afraid of price surges and sells assets, while the more daring ones buy and wait for the opportunity to sell at the most opportune moment. At the same time, the more players are willing to invest in cryptocurrency, the more actively it will rise in price.

The current rates of cryptocurrencies against the euro, dollar and other currencies can be tracked online. The data is processed in real-time, so it is easy to compare information and make predictions about market trends. The rate of the crypt is volatile and can change at any second, both upwards and downwards. This is what makes investors monitor indicators to have time to buy cheap and sell high.

Top of the popular cryptocurrencies

At the moment, there are more than 1000 different types of cryptocurrencies based on different technologies and created for different purposes. Not all of them become leaders or in general somehow interest investors, however, if a cryptocurrency is supported by some large company, then it has a lot of prospects.

Below is a rating of cryptocurrencies, which was compiled based on popularity, value, and prospects of each of them. It includes both old and well-known cryptocurrencies, as well as relatively new ones:

There are many more cryptocurrencies, the number in the thousands and new cryptocurrencies are also emerging. However, today these ones are considered the most popular ones and their capitalization is the largest.

Factors affecting the cryptocurrency market

Cryptocurrencies are a revolutionary new type of currency. The cryptocurrency market is complex and, like any other market, has its factors of influence that determine its state. Often, major movements both in the market and in the case of particular cryptocurrencies occur in connection with some global news.

It happens that the high volatility of cryptocurrencies becomes a reason not to invest in them, but if you ask the right questions and analyze the factors that lead to the ups and downs of cryptocurrencies, you can identify some patterns. Here are some of the main factors that have an impact on changes in the cryptocurrency market:

This list can be supplemented more and more, but these factors can be considered the main ones.

Like traditional financial markets, the cryptocurrency market has also experienced ups and downs. Due to the novelty of the market, the price rise or fall cycles are much stronger. Therefore, it is important to be as informed as possible and to know the factors that affect the price of cryptocurrencies to be able to react quickly or make a correct prediction. The ability to distinguish essential news from information junk is also an important skill that can be learned by keeping a close eye on the news background in the crypto industry.

Why trade cfds on cryptocurrencies?

Since cryptocurrencies are not a centralized currency controlled by a single bank, the cryptocurrency market moves rapidly with retail demand and can be subject to significant price fluctuations. As you know, cryptocurrencies are usually traded on exchanges, and virtual electronic wallets are needed to store them. The process of obtaining a wallet can be slow, limited to use, and expensive to maintain. However, our clients can trade cryptocurrencies via CFDs without becoming the owner of the respective asset.

In the case of cryptocurrency CFD trading, you do not need to own cryptocurrencies to profit from trading. All that is required is to trade the price movement. In this case, you have the potential to achieve positive results when the price moves in any direction. Overall, cryptocurrencies are rapidly becoming more and more affordable for small private investors with no special financial and technical knowledge or special skills. There are over a thousand digital currencies, and they all generate huge daily trading volumes. They are also increasingly used for regular online transactions.

As mentioned before, one of the advantages of cryptocurrency CFD trading is that cryptocurrencies are not affiliated with national banks or governments and are traded around the clock around the world. One of the reasons for the popularity of cryptocurrencies is that there are practically no barriers to trading them, they are inherently volatile and allow for margin trading.

The cryptocurrency market is an incredible place full of trading opportunities. Cryptocurrencies are emerging as quickly as they are disappearing, creating unprecedented opportunities for building a career as a trader.

Cryptocurrency CFD trading with InvestLite

Although cryptocurrency CFD trading does not require special skills or economics education, it is important to choose the right financial service provider. InvestLite provides relevant trading conditions for clients to trade CFDs on cryptocurrencies and pursue their trading goals. We also offer high leverage and low spreads, leading trading platform, and a big selection of assets.

What is also important, InvestLite is a regulated financial service provider. We also offer our clients with support, which is provided by the dedicated team of professionals. InvestLite is a kind of a starting point for those who want to build their trading career and gain valuable experience.

Summary: cryptocurrency CFD trading

Cryptocurrencies are virtual money that is based on blockchain technology and has real value. These are currencies that are rapidly gaining popularity among investors and traders of all levels. Cryptocurrencies are created and exist independently of banks and governments, however, they can be traded or exchanged just like traditional currencies.

The first and most widely known cryptocurrency is bitcoin(learn more about Bitcoin Trading), which appeared in 2009. However, there are currently several competing digital currencies that can also be traded, exchanged, or speculated, just like any traditional currency.

It is no secret that many have already managed to get rich quite quickly on virtual currencies, and in a very short time. This is due to the specificity of this currency, which can show a huge amplitude of fluctuations. It is the volatility that is one of the key factors why many choose to trade cryptocurrencies. The introduction of an innovative cryptocurrency CFD tool made it possible to make cryptocurrency CFD trading an accessible process. This trading method eliminates the need to buy cryptocurrencies directly and deal with the processes associated with their storage.

The attractive thing about cryptocurrency CFD trading is that it is the way to trade cryptocurrencies even if you have a small amount of capital. The minimum deposit will be quite enough to get used to the specifics of trading and understand its basic principles. In general, cryptocurrency CFD trading is an interesting tool not only for payments for services and goods but also as a separate financial instrument that is inherently popular among traders in the Forex market.


Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 72.4% 48 $61 246.04 4.35% 8.24% $1 207 791 624 997 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 77.6% 46 $3 251.17 2.79% 9.85% $390 841 391 746 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 92.8% 1 $1.000228 0% 0.04% $112 492 586 189 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 74.8% 48 $543.37 2.69% 9.41% $80 192 402 418 BNB 7 days price change
5 Solana (SOL) SOL Solana predictions 83.6% 25 $148.00 5.58% 9.85% $68 679 439 753 SOL 7 days price change
6 USD Coin (USDC) USDC USD Coin predictions 95.2% 1 $0.999891 -0.01% -0.01% $33 950 428 770 USDC 7 days price change
7 XRP (XRP) XRP XRP predictions 82.4% 29 $0.529085 -1.18% 24.39% $29 525 767 853 XRP 7 days price change
8 Toncoin (TON) TON Toncoin predictions 82% 27 $7.38 1.13% 2.82% $18 491 966 424 TON 7 days price change
9 Dogecoin (DOGE) DOGE Dogecoin predictions 73.6% 54 $0.112941 1.11% 5.11% $16 389 621 588 DOGE 7 days price change
10 Cardano (ADA) ADA Cardano predictions 78.8% 36 $0.436821 -0.38% 23.96% $15 673 589 601 ADA 7 days price change
11 TRON (TRX) TRX TRON predictions 80.8% 37 $0.137848 -1.93% 9.87% $12 009 843 432 TRX 7 days price change
12 Avalanche (AVAX) AVAX Avalanche predictions 74.4% 48 $26.30 2.07% 1.42% $10 373 109 265 AVAX 7 days price change
13 SHIBA INU (SHIB) SHIB SHIBA INU predictions 74.4% 42 $0.000018 3.15% 11.44% $10 331 743 395 SHIB 7 days price change
14 Lido stETH (STETH) STETH Lido stETH predictions 91.6% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
15 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 92% 1 $0.116354 -0.46% 0.23% $10 171 995 609 WTRX 7 days price change

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