If you are planning to get involved in the crypto space, one of the crucial decisions you need to make is whether you should invest in digital assets or speculate on their prices. Well, most of the newbies of the crypto world prefer to trade bitcoin to gain short-term profits. If you are one of those, let us learn why crypto trading is amazing and learn why trading has become the best alternative to directly buying bitcoins. Trading cryptocurrencies isn’t easy as you have to speculate the market and prices of cryptocurrency that you have chosen without even investing in that digital currency. This can be done with derivative products like CFDs.
Trading bitcoin requires you to have a complete understanding of the market, and you need to learn fundamental and technical analysis to analyze the crypto market. Also, it would be best if you kept yourself updated about current news and events going on in the market as even small events have a big impact on bitcoin’s price, and it fluctuates. The bitcoin market is volatile, and you need to keep a close eye on the price of bitcoin to make sure you enter and exit the market at the right time. Check the steps to sell bitcoins and then you will be ready to start trading bitcoin with online platforms.
Let’s move forward and learn the benefits of bitcoin trading that include:
Market hours
The most important thing that differentiates between the stock market and crypto market is the market hours. The crypto market or bitcoin market is open 24 /7 which means it allows users to trade 24 hours a day and seven days, and this is because there isn’t any central authority that controls the market. Bitcoin follows the peer-to-peer network, which means the transactions take place between individuals. The transactions can be carried out directly by buying coins from crypto exchanges located online. As trading is all about making profits from short price movement, you must keep a close eye or check on prices and enter and exit the market simultaneously.
Volatility
Compared to the stock market, the crypto market is new, and in a decade of bitcoin, it has experienced huge volatility because of short-term speculative attention. The price of bitcoin rose to its peak in 2017, and in 2018, it again dropped. The altcoins have become stable compared to bitcoin, and the new technologies being developed every day are more likely to draw speculative interest.
The volatile nature of cryptocurrencies is what makes the market interesting and exciting and attracts investors and traders. Rapid price movements provide a huge range of opportunities to go short and long, but also trading involves huge risks. So it is important to explore the market first, make proper researches, and develop the right strategy of risk management.
Ability to hold the asset
Investors invest in cryptocurrency while expecting its price to increase in the future. But in trading, when you trade a cryptocurrency, traders can take the maximum advantage of short movements in price whether it fall or rise, and this is referred to as going short in trading bitcoin. Going long means waiting for bitcoin’s price to increase for a long period, not like investing but for weeks or months. For instance, traders open a short position in the market while believing that the market will fall. And if exactly the value of that cryptocurrency fell, the trader would gain profit.
Enhanced liquidity
Liquidity means how easily and quickly a cryptocurrency can be converted into cash without even impacting the cryptocurrency’s price in the market. The crypto market is illiquid as the transactions are spread over multiple crypto exchanges, which is why crypto markets are volatile. But when traders trade cryptocurrency CFD, liquidity gets enhanced.
Easy and fast account opening
Traders or investors can buy and sell cryptocurrencies through the crypto exchange, and at first, you need to open an account with an exchange and store your crypto coins in a digital wallet. This process is time-consuming as you need to verify all your details with an exchange, which takes time. But in trading cryptocurrencies, no access to exchange is required, and you only need to choose the right trading platform that does all the things on your behalf. This will help you to set up everything and trade easily and quickly.
