#CryptoMarketDip Cryptocurrency trading is the act of speculating on the price movements of cryptocurrencies through a CFD trading account, or buying and selling the underlying coins through an exchange.
Trading CFDs on cryptocurrencies
CFD trading is a derivative, which allows you to speculate on the price movements of cryptocurrencies without taking ownership of the underlying coins. You can go long (‘buy’) if you think a cryptocurrency will rise in value, or short (‘sell’) if you think it will fall.
Both are leveraged products, meaning you only need to put down a small deposit – known as margin – to gain full exposure to the underlying market. Your profits or losses are still calculated based on the full size of your position, so leverage magnifies both profits and losses.
Buying and selling cryptocurrencies through an exchange
When you buy cryptocurrencies through an exchange, you are buying the coins themselves. You will need to create an exchange account, deposit the full value of the asset to open a position, and hold the cryptocurrency tokens in your own wallet until you are ready to sell them.
Exchanges have a steep learning curve as you have to understand the technology involved and learn how to interpret the data. Many exchanges also have limits on the amount you can deposit, while accounts can be very expensive to maintain.