How Crypto-CFD Trading is a Better Trading Method Than Crypto-Trading Itself
There are millions of people around the globe who have been a part of the online trading platform and more specifically, the cryptocurrency trading world. Many people have been a part of the cryptocurrency platform ever since the first cryptocurrency, Bitcoin (BTC) was launched in 2009, by an unknown person that went with a made-up name as Satoshi Nakamoto.
It was a time when only Bitcoin (BTC) was in the crypto-market and was the measuring entity of the crypto-economy. With the passage of time, there have been more than 6000 cryptocurrencies, which are currently operational and are attracting way more users/investors than they used to attract back in their early stages.
With the current state of pandemic when the entire world is surrounded by fear of the COVID-19, leaving many countries in lockdown and curfews, many people, who have lost their jobs are desperate to find new ways of making money to keep the fire running in their houses. In times like these, it is the online trading, especially, the cryptocurrency platform that has provided millions of people the opportunity to invest their money and make profits.
As per the recent statistics, the number of unique users in the cryptocurrency trading market has increased from 35 million to a whopping 100 million since 2018, where most of the credit goes to the current year that has run havoc on the entire world with the COVID-19 situation.
Now that there are many people joining the crypto-trading world, it falls upon us as the seniors in the cryptocurrency industry to guide these newcomers and help them understand the basics as well as the unique feature the cryptocurrency trading has to offer them.
Brief Introduction of Cryptocurrency Trading
Now before we get to the CFD Trading feature of the cryptocurrency industry, it is necessary that the new users are made aware of how the primary cryptocurrency trading works.
For users who are new to the cryptocurrency world, there are three ways of acquiring the cryptocurrencies. The first one is mining the crypto-coins through the crypto-mines, which is a process of solving complex mathematic puzzles with the help of GPU(s) and High-end operating systems that help expedite the process. This way, the users are able to register transactions on the blocks that make up the blockchain. Once a puzzle has been solved, the miners are awarded with the crypto-coins that they coin use through their preferred cryptocurrency exchange to buy, sell or exchange their earned crypto with others.
The second way is acquiring coins by buying them from the cryptocurrency exchange and selling them afterward. You can do that when the price of the particular crypto matures to earn profits.
The third way is dependent on the first two processes where the user can keep their coins stored up in their crypto-walled provided through the crypto-exchange and wait for the right time to sell the coins and make profits on them.
Disadvantage of Crypto-Trading and Benefit of Crypto-CFD Trading
To many users and new investors, the cryptocurrency trading may seem pretty simple and straightforward but the only disadvantage of crypto-trading is that the user is required to buy the crypto of his/her interest in order to open position in the real-time crypto-market in order to make profits against the calls he/she makes. This is where the crypto-trading platform became limited to the users with money to invest and deprived others of the opportunity to make money for themselves and for their loved ones.
In order to facilitate all levels of users, cryptocurrency introduced the CFD Trading feature, which allows them to set up temporary contracts where they act as a bidder and the exchange or broker provide them a replicated but real-time version of the crypto-market. In the contracts, the users and the other party choose the crypto, choose a particular date/time, quantity of the crypto-coins to be bet against and finally, decide whether the price of the asset would drop or go up versus the current price of the asset.
If the outcome goes into the user’s favor, the user makes the profit and if the outcome goes the other way, then it’s the brokerage that gets the profit.