Cryptocurrency trading

Cryptocurrency trading as a CFD.

What is cryptocurrency trading and how does it work?

Cryptocurrency trading involves speculating on price movements via a CFD trading account, or buying and selling the underlying coins via an exchange. Here you’ll find more information about cryptocurrency trading, how it works and what moves the markets.

CFD trading on cryptocurrencies

CFDs trading are derivatives, which enable you to speculate on cryptocurrency price movements 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 up a small deposit – known as margin – to gain full exposure to the underlying market. Your profit or loss are still calculated according to the full size of your position, so leverage will magnify both profits and losses.

Buying and selling cryptocurrencies via an exchange

When you buy cryptocurrencies via an exchange, you purchase the coins themselves. You’ll need to create an exchange account, put up the full value of the asset to open a position, and store the cryptocurrency tokens in your own wallet until you’re ready to sell.

Exchanges bring their own steep learning curve as you’ll need to get to grips with the technology involved and learn how to make sense of the data. Many exchanges also have limits on how much you can deposit, while accounts can be very expensive to maintain.

Why trade a cryptocurrency as a CFD?

Because Bitcoin it is not a centralised currency controlled by a single bank or dominated by interbank dealers, the Bitcoin market moves quickly with retail demand and can be subject to significant price swings. And you don’t need to own any Bitcoins to profit from it – all you need to do is trade on the price movements, meaning you have the potential to profit from either direction.

Is CFD trading regulated?

When trading a volatile cryptocurrency like Bitcoin as a CFD, it’s crucial to choose a reputable and accountable broker for your trades.

Help protect your account and reduce your risk by choosing a trusted, respected and fully regulated broker.

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