Cryptocurrency is a digital or virtual currency that uses cryptography for security. The world's first cryptocurrency bitcoin was launched in January 2009, followed by cryptocurrencies of various types in subsequent years.
By using a virtual currency, each transaction is encrypted. The sender and the recipient are identified by a series of numbers, and the flow of each cryptocurrency is stored in a public account called a blockchain to further ensure the security of each transaction.
You may use cryptocurrencies to make purchases or invest in them, and their value rises or falls in response to market variables. Cryptocurrencies are similar to real currencies in many ways. Currently, many platforms around the world accept bitcoin for purchases.
However, unlike traditional currencies, transfers in a cryptocurrency do not require names, nor do they need an intermediary such as a bank, commercial account or payment system. Transfers are anonymous and private, with low even no fees incurred.
The first cryptocurrency, Bitcoin, was invented by a computer programmer named Satoshi Nakamoto in 2008. Now it is the most popular of the approximately 780 cryptocurrencies in circulation worldwide. Bitcoin was launched in 2009 at a price of $0.008 per Bitcoin.
In 2009, Satoshi Nakamoto revealed his motives for inventing Bitcoin in his blog saying that he wished to develop a new open source and peer-to-peer electronic money system. Without a central server, this system completely removes the central or authoritative currency issuing organisation, because everything runs on the basis of objective program encryption rather than subjective trust.
The fundamental problem of traditional currency is that it requires trust to operate. The central bank must endorse its currency issue and convince the public that the currency has legal effect and will not continue to depreciate. However, the history of many countries' fiat currencies is teemed with violations of this trust. After the global financial tsunami in 2008, the Fed led the world's major central banks in quantitative ease by printing money on a large scale. Central banks around the world competed to devalue their currencies. In the wave of credit bubbles, banks made large loans, making many people's faith in the currencies falling sharply, and pushing them to the embrace of decentralised cryptocurrencies. Thus, cryptocurrencies have grown.
Firstly, the biggest reason for trading cryptocurrencies is to participate in the development of innovative global technology, because the launch of the world's most important cryptocurrency represented the emerging industries and innovative ideas supported by the blockchain technology behind the currency. Investing in promising cryptocurrencies is equivalent to investing in the bright future of financial technology.
Secondly, cryptocurrencies can be used to hedge against global paper money crises. If another severe global economic crisis breaks out, central banks will again begin to print money, probably leading to sharp depreciations of currencies relative to physical assets. As people around the world increasingly lose faith in central banks, cryptocurrencies may rise in value.
As an emerging financial asset class, cryptocurrencies have larger degrees of single day volatility on average than most other existing financial assets. If you are familiar with the volatility of a particular cryptocurrency, you can improve your trading performance in a short period of time.
Please note: CFD trading carries a high level of risk and are not suitable for all investors. Please read the Risk Disclosure Statement before choosing to start trading.
1. Major global regulators' ban on cryptocurrencies
Opinions of national leaders and legislation have a significant impact on the world of cryptocurrencies. In September 2017, China announced that ICO-related operations were illegal, causing the price of Bitcoin to plummet.
All cryptocurrencies, especially those that are little known, are easily influenced by investors who may intentionally manipulate the price trend. If an investor has a large amount of funds, he/she may target a certain cryptocurrency and spend heavily in promoting it in the hope of sending its price and market demand higher. The investor may then profit from higher prices.
3. Central Banks, particularly the Fed's policy orientation
If the Fed enters an easing cycle again by significantly lowering the benchmark interest rate, and other major central banks follow suit, probably triggering competitive currency devaluations worldwide, then the cryptocurrency market may turn bullish for a second time.
The launch of the world's most important cryptocurrency represented the emerging industries and innovative ideas supported by the blockchain technology behind the currency. Investing in promising cryptocurrencies is equivalent to investing in the bright future of financial technology. If you believe in the business logic and the future of a cryptocurrency, you can invest in that cryptocurrency through our platform.
If you subscribe to the concept of a public blockchain platform with smart contract functionality and believe that this business philosophy will continue to grow and grow fast, you may consider investing in cryptocurrencies such as Ethereum (ETH) and EOS. If you agree that the decentralisation concept of cryptocurrencies will become more popular, then consider investing in cryptocurrencies, such as Bitcoin (BTC).
The fact that investors buy Bitcoin CFDs does not mean they actually own any Bitcoin. This is different from trading real Bitcoin, and investors do not need to have a Bitcoin e-wallet. Trading CFDs does not require a virtual currency exchange, which means you do not need to worry about potential security issues related to a money exchange. In a CFD transaction, you may be the buyer (holding a long position), believing the value of the cryptocurrency will rise. You may be the seller (holding a short position), assuming that the cryptocurrency price will fall.
Cryptocurrency trading is actually the same as CFD trading, subject to the same system configuration for all other forms of CFD trading on the platform. In the case of normal liquidity, clients may short-sell any cryptocurrency on the platform.
Yes, cryptocurrency trading is actually the same as CFD trading, subject to the same configuration for all other forms of CFD trading on the platform. In the case of normal liquidity, clients may set a take-profit/stop-loss order for cryptocurrencies.
Our cryptocurrency CFDs are priced by specific liquidity quote providers and cryptocurrency traders. Please note that cryptocurrency prices may vary significantly depending on different cryptocurrency exchanges or liquidity providers.
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