Trading CFDs on cryptocurrencies, like any trading instruments, is associated with risk, especially given the high volatility that is constantly observed in this market sector. However, if you have a well thought out trading strategy, cryptocurrency CFD trading can turn out to be very profitable. As they say, the higher the risk, the higher the reward. The statistics speak for themselves; In 2021, Bitcoin outperformed every other asset on the market, becoming the best-performing asset in 2021.
The act of speculating on the price movement of a cryptocurrency through a trading account with a contract for difference (CFD) or buying and selling underlying coins through an exchange is called cryptocurrency or cryptocurrency trading. CFD trading is a type of derivative that allows you to bet on changes in the price of Bitcoin (BTC) without owning the underlying currencies. For example, you can go long (buy) if you think the value of a cryptocurrency will rise, or short (sell) if you think the value will fall. Both are leveraged instruments, meaning that you only need a small deposit, known as cryptocurrency margin trading, to have full exposure to the underlying market. However, since your profit or loss is still determined based on the total size of your investment, trading cryptocurrencies with leverage increases both profits and losses.