Unlike other asset classes (FX, Equities, Commodities, etc.), the Cryptocurrency market is dominated by retail speculators. With IC Markets Cryptocurrency CFDs, you’ll trade in a market where there is no central bank intervention, interbank dealers controlling order flow or giant pension funds moving prices.
Price movements on Cryptocurrencies like Bitcoin or Ethereum are driven primarily by news and prevailing sentiment, i.e. the fear and greed of retail speculators. These sometimes dramatic shifts can lead to massive intraday price swings, making Cryptocurrency CFDs an exciting product for aggressive and experienced day traders.
The IC Markets Cryptocurrency CFD product allows traders to go long or short without actually holding the Cryptocurrency. This means traders can get exposure to the price of the Cryptocurrency without worrying about the security risks associated with storing it and the counterparty risk from the exchange. This is similar to trading Energy Futures such as oil rather than owning physical oil to speculate on its price.
The first and largest cryptocurrency, Bitcoin paved the ways for hundreds of similar currencies and boasts a market cap of over $100 billion.
The world's second-largest cryptocurrency, it is labelled by many as 'the next Bitcoin'. Ethereum has received international recognition and support from giant organisations such as Microsoft, JP Morgan, and Intel.
Dash's focus is on instant transactions and owner privacy. Dash has an infrastructure that enables much faster transactions than other cryptocurrencies and therefore displays higher liquidity than many of its counterparts.
Designed by a former Google engineer to improve upon Bitcoin's technology, Litecoin offers quicker processing times and a larger number of tokens. It is also the first cryptocurrency to implement SegWit, a method of speeding up transaction times without compromising the underlying blockchain technology.
Bitcoin Cash CFD
Bitcoin Cash resulted from a hard fork of the Bitcoin blockchain. It increased block size from 1 megabyte to 8 megabytes without incorporating SegWit.
Ripple is both a transaction network and crypto token which was created in 2012 as the go-to cryptocurrency for banks and global money transfers, and has recently experienced a period of growth.
EOS is a decentralized operating system based on blockchain technology. It is designed to support of decentralized applications on a commercial-scale by giving all the required core functionalities.
Emercoin is an open-source cryptocurrency which originated from Bitcoin, Peercoin and Namecoin. Other than being a cryptocurrency, it is also a platform for secure distributed blockchain business services.
Namecoin is a blockchain protocol that serves as a naming system. Since Namecoin is a fork of Bitcoin, it is also a cryptocurrency that can be used for peer-to-peer transactions.
PeerCoin aims to solve the inefficiency problem of the Proof-of-Work that is used by bitcoin and many other coins using its own Proof-of-Stake system.
How does Crypto CFD
Bitcoin is a digital cryptocurrency that derives its value from supply and demand factors unique to this asset class.
Bitcoin is available in a finite supply and therefore increases in price as demand increases.
Demand stems from speculative sources and more practical sources, for example, Internet purchases paid for in Bitcoin.
Bitcoin also has a tendency to react to market sentiment in more traditional markets such as equities and foreign exchange, increasing during periods of negative sentiment.
Virtual currency CFD’s are complex, extremely risky and usually highly speculative instruments. When trading such products there is a high risk of losing all your initial capital. You should consider whether you understand how virtual currency CFD’s work and whether you can bear the loss of the entire invested amount. The values of virtual currencies are subject to extreme price volatility and may result in significant loss over a short period of time. Prior to trading these instruments you should fully understand the true extent of the exposure to the risk of loss and take into consideration your level of experience.