Samuel Hampton, a senior financial analyst at Olsson Capital confirms that there is a new asset in the financial markets which is quickly capturing the attention of traders and it is cryptocurrencies. With time more and more investors are finding CFD cryptocurrency trading more interesting and rewarding.
Currently, there are 3000+ crypto coins across the globe and more are still being generated. Apart from being used as currencies, the cryptocurrencies have networks which are normally tailored towards solving specific problems facing the society.
Although there are other ways like cryptocurrency mining, stacking and arbitraging through which investors make money investing in cryptocurrencies, CFD cryptocurrency trading still remains the major form of cryptocurrency investment to date. If you are thinking about investing in CFD cryptocurrency trading, then you are in the right place. We shall walk you through the whole process and all that you require.
Decide on which cryptocurrency you want to start by holding
To start with, you will need to choose at least one cryptocurrency that you can hold so that you can use it to purchase other cryptocurrencies. It is advisable that you go a thorough research about the crypto coin you want to acquire; understand how it is fairing in the market and how its value has been changing over the last one year.
It is important to choose a crypto coin that is quite stable and also reputable within the cryptocurrency sphere. Examples of such crypto coins include Bitcoin, Ethereum, Dash, Zcash, Ripple, Bitcoin Cash, Bitcoin Gold, EOS and Litecoin.
Buying the Crypto coin
Once you arrive at the crypto coin of your choice, you will be required to buy it using your local currency which is commonly referred to as fiat currency in the cryptocurrency world.
For you to purchase a cryptocurrency using a fiat currency, you will have to open an account with a fiat crypto exchange platform. Examples of reputable fiat crypto exchanges include Coinbase, Kraken and coinmama. With the fiat crypto exchange account, you will be able to buy crypto coins using your local currency.
Look for a secure crypto wallet to store your crypto coins
Once you acquire your crypto coins, you will require a wallet to store your cryptocurrencies. A cryptocurrency wallet is simply software that records the transactions of your digital coins.
Although some fiat crypto exchanges like Coinbase will offer their own inbuilt wallets, it is always good to look for a secure and dedicated crypto wallet which supports the crypto coins that you have.
There are lots of cryptocurrency wallets and they are classified into different groups. There are hardware wallets, online wallets, desktop wallets and mobile wallets. The hardware wallets store the records in a hardware device. The online wallets store the records in an online cloud. The desktop wallet requires you to download the software on your computer. The mobile wallet is the lightest and is operated through the mobile phones. The best crypto wallets are those that have two-factor authentication with some also requiring multi-signature authorization of every transaction that takes place.
The wallets have two types of keys: the private key which the holder should keep as a secret and the public key which the holder shares with other crypto holders when transacting with the cryptocurrencies. In case you are required to send a person some cryptocurrencies, you will have to have the public address of his wallet and that is where you will send the crypto coins to.
The real trading
With the crypto coins stored in your crypto wallet, you can now trade CFD cryptocurrencies. To trade, you can choose to use the fiat crypto exchanges or go for the pure crypto exchanges such as Binance, Kucoin, Bittrex, Cryptopia and the like, which require you to fund your trading account using the already owned crypto coins or at least use them to purchase other crypto coins.
The pure crypto exchanges do not allow the use of fiat currencies in purchasing crypto coin; in simple terms, you cannot exchange your local currency for some crypto coins in a pure crypto exchange.
Apart from allowing you to use fiat currencies, the pure crypto exchanges normally offer better trading platforms with better trading tools as well as a wider variety of trading assets.
Founder Dinis Guarda
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