Crypto Traders! Do You Know Which Markets You Should Trade?

Crypto Traders! Do You Know Which Markets You Should Trade?

As cryptocurrency trading flourishes, the financial industry quickly moves towards the digital era as new types of trading instruments surfaced. When it comes to digital assets, traders often lack information. In this blog, we will provide relevant details about cryptocurrency markets.

Want to know more about the cryptocurrency markets?

Any cryptocurrency newbie is not aware about the investments or trading instruments that are easily accessible online. Here are some of the different cryptocurrency markets:

  • Stock Market: This famous market is involved with buying and selling of shares of a company.
  • ETF Market: Exchange-traded funds (ETFs) represent all kinds of currencies, commodities, sectors, and even industries. Similar to stock market trading, these funds can be bought and sold quickly or sustained as long-term investments.
  • Forex Market: This is considered as the biggest market in the world. Forex enables the efficient exchange of one currency to another. Currencies are often traded in pairs, with numerous possible combinations offered, but only a select few are liquid.
  • Options Market: This market enables its participants to take on positions in the derivatives of assets. Though obligations and rights exist, the option is not ownership of a fundamental asset but the option price varies with the value that the asset is providing.
  • Contract for Difference (CFD): CFD is referred to as the hybrid of the forex, stock, and options. It enables clients to make trades in a derivative product based on a fundamental asset. Usually, the CFD does not have a commission, expiry date, premium , or commission, however it requires the client to pay even a bigger bid than what would be seen within the actual market for a product.

Though there are plenty of markets in the financial industry, these are the ones that are easily accessible online. Every market presents both advantages and disadvantages. Due to this, a lot of traders can decide on which market/s to trade.

How does the cryptocurrency market work?

Cryptocurrency markets are decentralized, which means they are not issued or sponsored by a central authority like the government. Instead, they run through a network of computers. They can be bought and offered via exchanges and can be saved in “(digital) wallets”.

Unlike conventional currencies, cryptocurrencies simply exist as a shared digital record of ownership, saved on a blockchain. When a person wants to send cryptocurrency units to another person, they send it to that person’s digital wallet. The transaction is not considered final until it has been authenticated and introduced to the blockchain via a process called mining. This is also how new cryptocurrency tokens are usually created.

What are the top 10 cryptocurrencies right now?

Approximately, 5392 cryptocurrencies are being traded worldwide. Here, we are going to show you the top 10 cryptocurrencies classified by market capitalization, aside from the Bitcoin (BTC) which is currently the largest.

  1. Ethereum (ETH): Ethereum is the first Bitcoin alternative, a decentralized platform that enables Decentralized Applications (DApps) and Smart Contracts to be raised and run without any control, downtime, fraud, or interference from external parties. The applications on Ethereum are run on its platform-specific cryptographic token, ether. Ether, launched in 2015, is currently the second-largest digital currency by market cap after Bitcoin.
  2. Ripple (XRP): Ripple is an instantaneous global settlement network that provides cheap and reliable international payments. XRP allows banks to resolve cross-border payments instantly and with absolute transparency. XRP’s method of confirmation is a unique consensus ledger that does not require mining, thus minimizing network latency and reducing computer usage.
  3. Litecoin (LTC): Litecoin kicked off in 2011, and was among the primary cryptocurrencies to go after the tracks of Bitcoin. Litecoin is chiefly based on a non-propriety global payment network that is decentralized and utilizes “scrypt” as its proof of work. Even though LTC is similar to Bitcoin (BTC) in plenty of ways, it is claimed to have a quicker block generation rate, thus providing efficient transaction confirmation time.
  4. Tether (USDT): Tether, founded in 2014, was one of the earliest and most recognized groups of “stablecoins”. These are cryptocurrencies that aim to keep their market value to a currency or other external reference point to decrease market volatility. Tether enables individuals to use a blockchain network and its allied technologies to transact with traditional currencies while reducing complexity and volatility.
  5. Bitcoin Cash (BCH): Bitcoin Cash (BCH), launched in 2017, is one of the earliest and most lucrative hard forks of the original Bitcoin. BCH is argued to be formed due to scalability issues that the original Bitcoin network faces. BCH has the capacity to increase the block size from 1-8 MB, with the concept being that bigger blocks will enable quicker transaction times. It also performs other functions, like the removal of the Segregated Witness protocol which affects block space.
  6. Libra (LIBRA): Libra is one of the cryptocurrencies rising to popularity this 2020. In 2018, Libra was rumored to be developed by Facebook as its first cryptocurrency and was finally confirmed in 2019 when a white paper was released. It is claimed to be managed and overseen by a new Facebook subsidiary called Calibra, a financial services outfit. It is anticipated that after Libra’s launch, it will gain popularity from investors worldwide including those outside of the cryptocurrency markets.
  7. Monero (XMR): Monero is a private, secured, and undetectable currency. Launched in 2014, this non-propriety cryptocurrency is entirely built with emphasis on decentralization, scalability, and enables absolute privacy with the help of a particular technique called “ring signatures”—a cluster of cryptographic signatures aim to prevent isolation and easy identification. Because of this extraordinary feature, Monero created a bad reputation, as it has been linked to criminal operations worldwide.
  8. EOS (EOS): Apart from Libra, one of the most recent digital currencies is EOS. Pioneered in 2018, EOS is designed after Ethereum (ETH). It extends an assigned proof of stake concept which increases scalability. It is also exceptional due to its lack of mining mechanism; as an alternative, blocks are generated and rewarded.
  9. Bitcoin SV (BSV): Also known as Bitcoin Satoshi Vision is a fork of Bitcoin Cash and a part of the Bitcoin network. In 2018, a network upgrade caused a prolonged debate between mining and developing factions within the BCH community, leading to the concept of BSV. According to its creators, BSV restores Bitcoin developer Satoshi Nakamoto’s primary protocol while enabling new advancements to increase scalability and stability. BSV also prioritizes quick transaction, processes, and security.
  10. Binance Coin (BNB): Founded in 2017, it is the representative token of the Binance cryptocurrency exchange platform and has rapidly risen to become the biggest exchange of its kind worldwide in terms of the gross trading volume. BNB enables its users to efficiently trade in numerous cryptocurrencies on the Binance platform.

Alternative Markets for Day Traders

Since the last two decades, there has been a constant increase in the number of day traders creating new accounts with forex and CFD brokers. It is quite convenient as there’s little to no barriers for entry, usually no charges, high leverage and rewards, and free trading features. But there are alternative channels if one decides to trade CFDs or forex.

ETFs permit traders to take part in the currency movements by placing trades on the stock exchange. While opening an ETF account will need more capital, there are certain benefits in that it can be leveraged or unleveraged. For example, any trader who desires to accept additional reward/risk for every gradual price movement can do so by purchasing a “3X bull” ETF. Moreover, traders are not obliged to pay the spread and they can sit on the bid or provide liquidity instead. This is highly valuable in currency pairs with limited movement or to traders who use scalping or micro-trading.

Traders with ETFs can also partake in other markets, for instance, the movement of gold, silver, or stock indexes; they can cut out of the CFD market and start trading ETFs, giving them a broader range of products. Using CFDs, ETFs, and the forex market can be useful depending on the trading strategy.

Alternative Markets for Long-Term Investors

Commodities usually draw in long-term investors. Understanding various markets can open new doors even for prudent investors who only make a few trades. After gaining relevant knowledge about the markets, you can find options depending on your current circumstances:

  • The forex market can be utilized to obtain currency exposure.
  • Exchange-traded funds, on the other hand, can be used to gain currency exposure, as well as partake in the price movements of gold, oil, silver, and other global commodities.
  • CFDs can also be worked by long-term traders given that the bid/ask spread is minimal over a short period. Moreover, CFDs also provide some of the benefits of options, but with no expiration.

When trading any instrument, it is crucial to be constantly aware of taxes and how the instruments match with the general objectives, including retirement. Instruments can be slightly treated differently; therefore, it is recommended to look for some advice from a professional financial advisor.

Which Crypto Assets Should You Trade

The trading strategy employed, available financial resources, location, and time a person trades (or wants to trade) can all play a significant effect in which assets are best to trade. Since some of the cryptocurrencies and markets are unknown, you can always rely on the top cryptocurrencies. However, it is important to remember that there are numerous alternatives and strategies out there that can provide significant profits and can even yield better results in the long run. Be open to try and investigate emerging concepts and ideas for your roadmap to success.

So what kind of asset makes people rich?

It is common knowledge that wealthy individuals have multiple ways of making money and they do not just depend on one source of income. Virtually, all rich and successful people have assets that produced money and long-term wealth.

But what are these assets that are making people rich?

  • Business
  • Stocks
  • Dividends
  • Bonds
  • Real Estate
  • Digital Assets, etc.

THE TRUTH IS: People become rich because they have the ability to switch to an alternative or another plausible option when things are not going according to the game plan.

About the author

Hi I'm Jeff Kiefer and this is my blog. I've been in the Internet Marketing industry for over ten years now, and I would like to share all my experience, insights and other fun stuff with you guys!

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