Cryptocurrency Trading

How Cryptocurrency CFD Trading Works


Cryptocurrencies are digital currencies that exist on decentralised ledgers, exchanges and blockchains. While there are now well over a thousand cryptocurrencies, active traders focus only on the most valuable cryptocurrencies, which are also the most liquid.

Similar to Index CFDs, Cryptocurrencies can be traded via a derivative that allows traders to take a long or short position. Traders won’t own the underlying cryptocurrency, but they will ‘own’ any movement in the price when they hold a position.

EightCap Cryptocurrency Trading

EightCap trader’s can access four commodity instruments via their MetaTrader 5 platform.

CryptocurrenciesTrading SymbolTrading Hours (Server Time)
BitcoinBTCUSD24 hours
Bitcoin CashBCHUSD24 hours
Bitcoin GoldBCGUSD24 hours
EthereumETHUSD24 hours
LitecoinLTCUSD24 hours
RippleXRPUSD24 hours
CryptocurrenciesTrading SymbolTrading Hours (Server Time)
BitcoinBTCUSD24 hours
Bitcoin CashBCHUSD24 hours
Bitcoin GoldBCGUSD24 hours
EthereumETHUSD24 hours
LitecoinLTCUSD24 hours
RippleXRPUSD24 hours

Cryptocurrency Trading: Exchange vs CFD

Cryptocurrencies can be traded around the clock on exchanges around the world. If you trade on an exchange, you will be trading the actual cryptocurrency, which will be stored on the exchange, or in your own software or hardware wallet.

Choosing to trade through EightCap enables you to trade cryptocurrencies via a CFD (contracts for difference). This means you will not actually own the underlying cryptocurrency, but will be able to participate in changes in the price, by taking long and short positions with the use of leverage.

Join EightCap today to start trading cryptocurrencies

Introducing Cryptocurrencies

Bitcoin

Bitcoin was the original cryptocurrency and was introduced in 2009. It’s also the most valuable and most widely traded. Bitcoin is viewed as both a store of value and as a medium of exchange, and both of these attributes give it its value. Bitcoin’s code has been copied and amended by numerous other teams starting similar digital currencies – however, Bitcoin is still more valuable than all other cryptocurrencies combined.

Ethereum

Ethereum is a blockchain similar to the Bitcoin blockchain, but includes additional functionality that allows smart contracts and applications to run on it. This allows all the computers on the network to act as a giant decentralised computer, and third-party applications can be run by this giant computer.

The users of the applications pay developers and miners to run their applications with Ether. Hundreds of applications and platforms now operate on the Ethereum blockchain, and require Ether to do so. Ether therefore derives its value by being necessary for anyone using the network.

Ripple

Ripple is a company creating blockchain based solutions for the global banking industry. These solutions use Ripple’s own cryptocurrency, XRP, which trades freely like any other cryptocurrency. Ripple is being tested by several of the largest banks in the world. Because the interbank currency market is the largest market in the world, if the tests are successful, XRP will have significant utility underpinning its value.

XRP is commonly referred to as Ripple in the market, and is one of the most popular cryptocurrencies for trading as it is highly liquid and has recently had large price swings.

Litecoin

Litecoin, is the sixth most valuable cryptocurrency in the world, and also can be one of the most profitable cryptocurrencies for traders. It is widely listed on exchanges, giving it good liquidity and price discovery. Litecoin is also highly correlated with Bitcoin, and often follows the Bitcoin price moves.

Litecoin is identical to Bitcoin in many ways, with a few unique features. Transactions on the Litecoin network are processed in 25% of the time it takes on the Bitcoin blockchain. Litecoin is also easier to mine, which the creators hope will lead to more decentralization of the network.

Pros and Cons of Trading Cryptocurrencies

Advantages of Trading Cryptocurrencies CFDs

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Cryptocurrencies have the largest price moves of any asset class, allowing disciplined traders to ride large price fluctuations.

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Cryptocurrencies allow traders to participate and invest in the latest innovations in the fields of technology and finance.

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Open short and long positions in market with small or large amounts of capital.

Things to consider when Trading

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Because crypto prices can be volatile, they can also be seen as riskier markets to trade.

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Using leverage irresponsibly can lead to losses where a large portion of your investment can be lost if the market moves against you.

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Past performance of strategies is not an assurance of future performance.

Want to find out more? Start trading with EightCap today.

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