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Dorchester Center, MA 02124
Discover more about trading the volatile – and risky – cryptocurrency markets. Learn how to take a position with CFDs, and then see an example of a crypto trade on ether.
Cryptocurrency trading is the buying and selling of cryptocurrencies on an exchange. With us, you can trade cryptos by speculating on their price movements via CFDs (contracts for difference).
CFDs are leveraged derivatives – meaning that you can trade cryptocurrency price movements without taking ownership of any underlying coins. When trading derivatives, you can go long (‘buy’) if you think a cryptocurrency will rise in value, or go short (‘sell’) if you think it will fall.
By contrast, when you buy cryptocurrencies on an exchange, you buy 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.
The cryptocurrency market is a decentralised digital currency network, which means that it operates through a system of peer-to-peer transaction checks, rather than a central server. When cryptocurrencies are bought and sold, the transactions are added to the blockchain – a shared digital ledger that records data – through a process called ‘mining’.
Cryptocurrency markets move according to supply and demand. However, as they’re decentralised, they tend to remain free from many of the economic and political concerns that affect traditional currencies. While there is still a lot of uncertainty surrounding cryptocurrencies, the following factors can have a significant impact on their prices:
Cryptocurrencies are notoriously volatile. For traders using leveraged derivatives that allow for both long and short positions, large and sudden price movements present opportunities for profit. However, at the same time, these also increase your exposure to risk. In short, the more volatile the market, the more risk you carry when trading it.
With IG, you can trade cryptocurrencies via a CFD account – derivative products that enable you to speculate on whether your chosen cryptocurrency will rise or fall in value. Prices are quoted in traditional currencies such as the US dollar, and you never take ownership of the cryptocurrency itself. CFDs are a leveraged product, which means you can open a position for just a fraction of the full value of the trade. Although leveraged products can magnify your profits, they can also magnify losses if the market moves against you.
When trading cryptocurrencies with us, you can:
Learn more about the benefits of cryptocurrency trading
With us, you can use CFDs to trade 11 major cryptocurrencies, two crypto crosses and a crypto index – an index tracking the price of the top ten cryptocurrencies, weighted by market capitalisation.
Our selection includes: