With cryptocurrencies rising again in 2019, potential opportunities arise due to an increase in volatility. However, this year is not identical with 2017, when digital saw their best year in history. If back then people wanting to invest were using traditional cryptocurrency exchanges, at the present time there’s a growing tendency towards derivatives based on cryptocurrencies.
How’s crypto trading different?
In order to avoid exchange platforms, where transactions can take longer when the blockchain is crowded and where one has to pay relatively large commissions sometimes, people still wanting to invest in cryptocurrencies had switched to cryptocurrency trading.
The main advantage of using platforms like Atecs Capital and MGC Logic is that you can trade cryptocurrencies with leverage – meaning you will be able to buy larger amounts than your account balance with the help of your broker. By using leverage, you are able to get liquidity from your broker and with an optimal risk management strategy, it is a tool that can improve your performance.
Secondly, cryptocurrency trading is more suitable since it does not require you to hold tokens in a digital wallet. Major security issues had shown in the past two years that cryptocurrency wallets, especially hot wallets, are vulnerable to malware and hacking attempts. By trading cryptocurrencies, you are no longer exposed to any of those threats, since you are buying and selling contracts that have cryptocurrencies as an underlying instrument, and you can generate returns from the movement of price over time.
Trade execution is much better and liquidity concerns are gone, considering that most of the crypto trading platforms work with several exchange platforms in order to provide their clients with the best trading conditions.
A significant improvement can be spotted in terms of cost per trade. Spreads and commissions are much lower in the case of cryptocurrency trading, in particular when it comes to small-cap cryptocurrencies.
Last but not least, regulation had become an important topic and cryptocurrency trading platform have an edge over exchanges. Most of the popular traditional platforms do not allow fiat deposits, which helps them avoid some regulatory requirements. Cryptocurrency trading platforms, on the other hand, allow fiat deposits and because of that, they must comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulation. Professional trading must be done in a regulation-compliant environment, in order to avoid any unwanted bad situations and cryptocurrency trading qualifies in that respect.