The phenomenal growth of the crypto market gave rise to scepticism, however, breeding irrational fears. So, here are some of the myths about trading cryptos as CFDs debunked.
Myth #1: Crypto Trading is Done Anonymously
The anonymity aspect of cryptos has sparked a great deal of fear. While many believe crypto transactions are completely anonymous, this isn’t actually the case. On the contrary, when you buy and sell digital currencies, the transactions are tracked on a public ledger, which maintains an indestructible record of all exchanges and addresses. If you’re investing in cryptos via an exchange or trading them on a platform offered by a broker, you’ll need to complete KYC formalities to set up your account. Rather than worrying about anonymity, do remember to choose a reputable broker that prioritises high privacy and security and protects your sensitive information.
Myth #2: Cryptos Are Used to Fund Illegal Activities
Sure, cryptos can be used for such activities. People would rather use cash though; since cash transactions are far more anonymous and difficult to track than secure and transparent
blockchain transactions.
Myth #3: Cryptos Don’t Have Any Intrinsic Value and Their Price Will Crash to Zero
The crypto market offers attractive opportunities for CFD traders despite price fluctuations. With crypto CFDs, trades can be made in both bull and bear markets, by opting to go long in case prices are rising or to go short when prices are falling. So, if crypto prices crash, you’ll have ample opportunities to open and close positions! It’s true that cryptos have no intrinsic value. Well, nor does the US dollar, the pound or the euro. None of these currencies are backed by any physical commodity. Are we expecting the value of these fiat currencies to crash to zero anytime soon? Money has value because it is widely accepted as a medium of exchange. Cryptos are increasingly being accepted by companies as a mode of payment for their products or services. Some of these companies include large and established names like Microsoft, Expedia, Shopify, Intuit, Bloomberg, Tesla and WordPress. Even global organisations like UNICEF are accepting donations in cryptos.
Myth #4: You Can’t Use Risk Management Tools When Trading Crypto CFDs
On the contrary, it’s highly recommended that you use risk management tools with crypto CFD trading, since the market can be extremely volatile. Crypto CFD traders should set up stop-loss and take profit positions every time they open a position. A stop-loss order determines the price at which the position will be closed, which helps minimise losses in case the market doesn’t move in your favour. Take profit allows crypto CFD traders to lock-in profits, which helps to earn from a trade before the price of the underlying asset declines.
Myth #5: Crypto Trading is Not Regulated
Crypto is a new phenomenon and it will take some time for governments to finalise the entire gamut of regulations. Efforts are ongoing, and over time, the crypto arena, just as any other asset class, will be fully regulated. Through late 2017 and early 2018, the crypto market had been highly volatile due to changes in regulations. The regulatory environment is showing signs of stabilising, which could bode well for crypto prices. Crypto CFD traders should ensure they are trading with a regulated brokerage like Blackwell Global, which is FSP, FDR, CYSEC, MiFID and FCA registered.
Myth #6: You Need to be Highly Tech Savvy to Trade Cryptos
When you’re trading crypto via CFDs, you’re not buying or holding any coin. So, there’s no need to create crypto wallets or take steps to protect the digital currencies from hackers. With crypto CFDs, you’re simply speculating on price movements and all you need to know is how to open and close positions on the online trading platform of your choice. It’s best to be familiar with trading tools and test strategies before speculating with too much capital.
Myth #7: People New to Cryptos Shouldn’t Trade CFDs
On the contrary, traders who are new to cryptos could consider beginning with CFDs. You can start with smaller lot sizes and increase your investment as you gain experience. Moreover, CFD traders can turn to customer support, offered by the brokerage firm, for guidance. An established CFD broker will provide prompt support and take pride in ensuring timely and high-quality query resolution.
It helps to know something about crypto trading before jumping on the bandwagon. Blackwell Global is the only crypto CFD broker to have an extensive educational portal for traders to learn and stay in touch with the latest developments in this fast-evolving market. You could watch webinars on crypto CFD strategies, get to know about crypto specific indicators or simply read
some of the how-to articles.
Crypto CFD trading is more suitable for short-term and day traders. Experienced traders use crypto CFDs to diversify their trading portfolios, since these digital currencies are considered a good hedge against inflation and factors that impact other asset classes.
Get started today by visiting BlackwellGlobal.com
-------
Information provided via press release
