Cryptocurrency trading is taking a specific position on the price movement of individual cryptocurrencies against the dollar in crypto/dollar pairs or against another crypto via crypto/crypto pairs. CFDs contracts for difference are a particularly popular method for trading cryptocurrencies as they allow for greater flexibility, the use of leverage, and the ability to take both short and long positions.

The growing popularity of cryptocurrency trading.

Over the past decade since the internet debut of Bitcoin, cryptocurrency trading has become increasingly popular. Cryptocurrencies are digital coins created using blockchain or peer-to-peer technology, using cryptographic methods for security reasons. They differ from fiat currencies issued by states around the world because they are intangible. Instead, they consist of bits and bytes of data. In addition, cryptocurrencies do not have a central administrative body or government entities such as a central bank that issues currencies or regulates their circulation in the economy. However, since cryptocurrencies are not issued by any government authority, they are not considered legal tender.

Although cryptocurrencies are not recognized as legal tender in the global economy, they can change the financial landscape, making them difficult to ignore. At the same time, blockchain technology, which is the basis for creating cryptocurrencies, has opened up new investment opportunities for traders to profit from.

Types of cryptocurrencies

While hundreds of cryptocurrencies are currently available, traders' interest seems to be focused on about half a dozen of them. Included in the list of the most popular cryptocurrencies is Bitcoin, which is still considered the original cryptocurrency. Due to a "hard fork" in the original Bitcoin blockchain, Bitcoin has branched out to two new additional virtual coins: Bitcoin Cash and Bitcoin Cash ABC. Other popular cryptocurrencies that are commonly traded on cryptocurrency exchanges and online CFD trading platforms include Ethereum, Litecoin, and Ripple XRP.

Popular cryptocurrencies can be divided into several main types. There are those that are meant to provide an alternative to fiat currencies. These include Bitcoin, Bitcoin Cash "BCH", Bitcoin Cash ABC, and Litecoin. Ether, on the other hand, is only intended to be used to leverage the Ethereum platform to create decentralized applications "Dapps". Ethereum or Ether is therefore considered a "usage token" rather than a currency. In contrast, Ripple XRP is used as a blockchain-based payment platform. Finally, there is the Crypto 10 index, which can be compared to an exchange or currency index, but is composed of the ten largest and most liquid cryptocurrency assets.

Bitcoin "BTC"

In 2008, Bitcoin or BTC was the first cryptocurrency launched worldwide based on blockchain technology. Since then, Bitcoin has become one of the most valuable cryptocurrencies in the industry, with its value even surpassing that of gold.

Bitcoin Cash "BCH'

Bitcoin Cash is the result of a "hard fork" that occurred in the original Bitcoin blockchain in August 2017. The change was an attempt to allow larger blocks in the original blockchain, allowing for faster processing of transactions.

Bitcoin Cash ABC "BAB"

The result of another "hard fork" this time within the Bitcoin Cash blockchain on November 15, 2018 is Bitcoin Cash ABC. The "hard fork" followed from an upgrade to the Bitcoin Cash blockchain software, from which "Bitcoin Cash Adjustable Blocksize Cap" would emerge as the largest software client for the blockchain. The abbreviation ABC is also derived from "Adjustable Blocksize Cap". The goal of the upgrade was to introduce the possibility for cashless transactions such as "smart contracts" as well as prediction services. At the same time, the initiators of the fork wanted to replace the canonical transaction order with a topological chain.

However, not all members or nodes in the Bitcoin Cash network agreed to the upgrade. When the innovations were introduced, another hard fork took place, giving birth to Bitcoin Cash ABC.

Crypto 10 Index

The Krypto 10 Index is an index that provides a tradable benchmark for the cryptocurrency asset class. The index includes the ten largest and most liquid cryptocurrencies and tokens, with prices averaging those of several major exchanges. The index was standardized to 1,000 points on December 23, 2016, and has been continuously recalculated against the market movements of its ten constituents since January 9, 2018.

Ethereum "ETH"

Ethereum is a blockchain network developed based on the original Bitcoin blockchain technology. The cryptocurrency was first introduced by Vitalik Buterin in November 2013.

Ripple "XRP"

Ripple was developed in 2012 by Ripple Labs Inc, a US-based technology company, as a payment solution. The main goal of Ripple was to simplify the current global payment transmission system by minimizing costs and payment processing time.

Litecoin "LTC"

Litecoin was introduced to the cryptocurrency world in October 2011 to facilitate cross-border payments. It was designed to provide faster verification of transactions compared to Bitcoin.