Tracking the Bitcoin Price
How do you track the price of Bitcoin? The cryptocurrency revolution is well and truly upon us and keeping abreast of the fast moving price is a difficult challenge for any first time cryptocurrency trader or speculator. The openings to the cryptocurrency market, despite one of the fundamentals of blockchain being transparency, are often slightly opaque, and regulation is only slowly catching up.
Whether its Bitcoin, Litecoin, Ethereum, Ripple or another of the crypto offerings that you are interested in, there are many ways to keep up with the latest price. The most obvious is the ubiquitous Google search, the advertising and search giant providing good updates as to the latest position of many cryptos. Of course, this kind of tracking is not much use to you if you are looking to trade or do some sort of charting or technical analysis on cryptocurrency.
Crypto Exchanges and Wallets
There are cryptocurrency exchanges such as Binance, Coinbase and Bittrex where you can actively trade cryptocurrency from one coin to another. Online wallets such as Coinspot and Blockchain.info offer a flexible way to hold your cryptocurrency. As I’m sure you realise its also possible to hold your crptocurrency encrypted on your computer or hard drive.
Keeping track of the price is typically available through exchanges and wallets, with exchanges especially having excellent charting and real time stats and graphs. If you really want to take your trading of cryptocurrency prices to the next level you could try using contracts for difference, through online CFD providers. CFDs are highly leveraged financial instruments, which can allow leverage, say for example, in the vicinity of 1:30. This means that $100 can allow you to gain the effect of $3,000 capital!
CFDs allow you to speculate on the movements in the prices of cryptocurrency without actually owning them. This overcomes some of the opacity of the cryptocurrency world by meaning you don’t need to use an exchange such as Binance, or a crypto wallet such as Coinspot. Another benefit of using a CFD provider rather than buying crypto itself is that you can place stop losses and receive price alerts, which are not always readily available when actually owning cryptocurrency. Normally CFDs are only available on the ‘major’ cryptocurrencies.
When you use Contracts for Difference to trade cryptocurrencies, you are typically trading cryptocurrency CFD pairs, which can be two coins such as, for example, Ethereum and Litecoin. You could also trade a pair such as the US Dollar and Bitcoin. These pairings work like other CFD pairings on classes such as Indices or Stocks.
Cryptocurrencies are exceptionally volatile, and typically are not held for 5 or 10 years like a traditional stock or bond. Contracts for Difference can add leverage to these already volatile price fluctuations. This makes cryptocurrencies very risky, and with Contracts for Difference on cryptocurrency caution is advised as heavy losses can be incurred.
CFD Leverage and Cryptos
When trading CFDs, leverage is used to increase your exposure. For instance, if a particular cryptocurrency CFD has a leverage ratio of 1:4 and the price moves 10%, the CFD trader will actually make a profit of 40% (or a loss of 40% depending on the direction of the price movement and the type of position the trader has selected). This means that there is substantial risk downside but also reward upside available to the CFD trader.
By using CFDs to trade crypto price fluctuations you remove one of the risks of holding cryptocurrency – namely the risk of having your crypto wallet hacked and the crypto being taken. Whether you use on online wallet or a hardware version, this is always a real threat. Some of the practicalities of crypto like needing to store it in a crypto wallet, exchange it on a cryptocurrency exchange and other such necessities for crypto and bitcoin like blockchain are removed by using legislated and more transparent Contracts for Difference on crypto price fluctuations.
CFDs, which are leveraged products, also allow the speculation on the falling of the price of an underlying asset.
Can you trade Crypto CFDs?
f you think you would be able to trade cryptocurrency contracts for difference, there are some providers in the Australian market that are able to handle your requests if you meet the necessary requirements to open an account. To see the features of such brokers, click here. For more information on the compliance of CFDs, click here.