Cryptocurrency CFDs Vs Conventional Cryptocurrency Trading

Looks like the initial hesitation towards the acceptance of cryptocurrencies is slowly fading away, as many bigwigs like Abby Johnson, CEO, Fidelity, VikramPandit, former CEO, Citi have started publicly praising it, which means these cryptocurrencies are more than just being a fad and therefore, the change indeed is inevitable in the monetary world! Now, the question is, how well prepared are you to accept this change? To simply put, do you have any investments in the name of cryptocurrencies? If not, then, we are here to educate regarding two of the most realistic ways to venture the cryptocurrency investment/trading practice, understanding which you can decide your own course of actions suiting you and your expectations out of the practice!

The cryptocurrency investment can be accomplished using either of the below-two convenient ways

  1. Cryptocurrency CFDs
  2. Conventional Cryptocurrency Trading or Cryptocurrency Purchase

The Analysis

  • The concept

In cryptocurrency CFD practice, a trader never owns the underlying asset, here the cryptocurrency, instead, an agreement is made between him/her and the broker to act upon the price differences of the then and the future, which when happens in the predicted way offers the benefits to the trader. Therefore, the trader is exempted from safeguarding the asset in this practice, thankfully!

In the conventional practice, a trader actually buys or physically owns the asset and therefore, safeguarding is his/her prime concern.

  • The Term

The cryptocurrency CFDs are more suitable for short-term operations, as the concept here is to act upon the favorable price movement.

Whereas, in the conventional cryptocurrency practice, buy to hold or the long-term operation is the best and therefore, the trader need not worry about the fluctuating market situations so deeply!

  • Leverage

The CFD is a leveraged product, which means for the amount you own as the capital, you are allowed to venture the worthier trading market that boosts your profitability greatly during a favorable market situation. But, at the same time, during an unfavorable scenario, the losses incurred will also be heavy and therefore, while choosing your leverage option you should be cautious.

In a conventional cryptocurrency trading practice, there is no concept of the leverage, which means you have to possess the entire capital to venture the suitable trading market, any day!

  • Skill required

When you choose an automated cryptocurrency CFD platform, no extraordinary trading skills are required to produce the profitable results, assuredly. But, the only thing you have to check here is, is it a safe trading platform or a scary scam to avoid losing your precious money.

The same holds good even for the conventional cryptocurrency trading/investment approach.

Thus, these both practices have their own merits and demerits and choosing the suitable one is specific to the individual trader’s preferences, any day!