Three reasons why cryptocurrency trading can be profitable
Curious about the cryptocurrency market? Discover three reasons why cryptocurrency trading can be profitable.
Trading cryptocurrencies is all about taking a financial stand in the direction of the price of a specific cryptocurrency compared to the dollar.
Contracts for Difference (CFDs) are an especially common way to trade virtual currencies as they provide a lot of flexibility, leverage and the capability of opening both long and short positions.
With the right trading tools, you can have the a positive trading experience. A bitcoin converter is one of the best options if you intend to sell bitcoin. You should also familiarize yourself with cryptocurrency trading and the different changes taking effect to have an easy time and avoid losses.
The rising popularity of cryptotrading
Cryptocurrency trading has become popular over the last few years, since the launch of Bitcoin. Cryptocurrencies are very different from fiat currencies. Fiat money is a currency that is government-issued and not backed commodities like gold.
Most currencies printed on paper, like the US dollars are fiat currencies. Central banks have more control over their economy with fiat money because they control how much money is actually printed.
Cryptocurrencies, on the other hand, are created with bytes and bits of data. They also lack a central institution or authority, like a central bank, that issues them or regulates their economic circulation. As government agencies do not issue cryptocurrencies, they are not categorized as legal tender.
However, despite being unrecognized as legal tender, they can change the economic landscape and and becoming increasingly important.
Types of cryptocurrency
Bitcoin (BTC) was the world’s first cryptocurrency in 2008, and was the first cryptocurrency to make use of blockchain technology. Today, it is one of the most valuable cryptos in the sector, and has a value that surpasses even gold.
Some other cryptocurrencies include:
- Ethereum (ETH). It is a network developed using the original Blockchain technology for Bitcoin. Vitaly Buterin first introduced this cryptocurrency in November 2013.
- Ripple (XRP). It was set up as a payment system by Ripple Labs Inc in 2012. Ripple’s main goal was to ease the existing global transfer and payment system while minimizing payments’ cost and processing period.
- Litecoin (LTC). In October 2011, it was ushered into the cryptocurrency world to facilitate the flow of payments across the globe. Litecoin was created to offer quick transaction verification than Bitcoin.
In addition to being the pillar for cryptocurrency creation, blockchain technology offers broader implications for the international economy, including potential applications in the IoT (Internet of Things) field and smart contracts.
As cryptocurrencies only emerged in the past few years and are not seen as a legal tender, they aren’t affected by the market forces that impact most conventional markets. This implies that cryptocurrency trading is different from trading in conventional financial markets.
Three reasons why cryptocurrency trading can be profitable
There are a number of reasons why cryptocurrency trading can be profitable. Here are three that are worth noting.
1) Cryptocurrencies work around the cock
The crypto market is usually open for transactions 24/7 as no government controls it and it’s not centralized. This means that people can transact with each other at any time. This is beneficial as you can plan your program and trade whenever you need. The bitcoin trading system is the perfect software to trade cryptocurrencies automatically on your behalf, even when you sleep or spend time with your family or friends on weekends.
2) It is transparent
Transparency is vital in money transfer. Blockchain technology has made it possible to see transactions while hiding personal information. This way, your wallet can be seen, but not your data. In addition, it makes the use of cryptocurrency more secure as no one can manipulate the protocol, be it an individual, a government, or an organization.
3) It is secure
Safety is key when investing your money. You can easily control their transactions by storing bitcoins in a digital wallet. In addition, sellers cannot charge buyers additional fees. They should inform the client before adding additional fees. Also, identity theft is not possible since your don’t have to produce your personal information during transactions. In this scenario, Bitcoin trading is a secure legal platform for trading cryptocurrencies.
