Some benefits of using CFDs to trade cryptocurrencies are:
Trust – Most CFD platforms have been established for many, many years. They are also highly regulated by the governments, which leads to a high level of security in comparison to cryptocurrency exchanges.
Simplicity – Usually you can trade with fiat currency and you also don’t need to find yourself a wallet.
Higher Fees – The fees can go up to 5% in comparison to 0.5% of normal cryptocurrency exchanges. Also, it is important to note, that many CFD platforms state that they have 0% fees, yet the spread between the buy and sell price of the crypto certificate is quite big.
Less privacy – You will be asked for more personal information in comparison to normal crypto exchanges.
The market of cryptocurrencies is fast and wild. Nearly every day new cryptocurrencies emerge, old die, early adopters get wealthy and investors lose money. Every cryptocurrency comes with a promise, mostly a big story to turn the world around. Few survive the first months, and most are pumped and dumped by speculators and live on as zombie coins until the last bag holder loses hope ever to see a return on his investment.
Digital coins volatility has been a concern for the traditional investors. However, that the volatility has been falling as a large number of mainstream investors adopt the cryptocurrency. As more institutional investors step in, the volatility is likely to fall further in the next few quarters.
Similarly, many have said that cryptocurrencies are a bubble. It might be the case with that a few digital currencies. However, to paint all of them with the same brush will be unfair.
Like all investments, there will be risks involved. However, similar to managing risks in a conventional portfolio, you will have to manage risk in cryptocurrencies.
Don’t get carried away with the lure of making easy money. Invest in the popular cryptocurrencies that are backed by a strong technology with a future.
It might be a good idea of not investing all your money into cryptocurrencies. Allocate money only according to your risk appetite and your goals. However, including a few cryptocurrencies in the portfolio in a staggered fashion and see them grow over the years seems to be a popular move nowadays.