A cryptocurrency is a type of digital money created from code. They function autonomously, outside of traditional banking and government systems.
Cryptocurrency trading is the process of speculating on a digital currency’s price movements. Exposure to cryptocurrencies’ price movements can be achieved without owning the asset via a spread betting or CFD trading account, or can be bought and sold on crypto exchanges.
There are a number of costs to consider when spread betting or trading CFDs on cryptocurrencies, including spread costs, holding costs (for trades held overnight – this is essentially a fee for the funds we ‘lend you’ to cover the leveraged portion of the trade) and guaranteed stop-loss order charges (if you use this risk-management tool).
One of the advantages of spread betting and trading CFDs is that you only need to deposit a percentage of the full value of your position to open a trade, known as trading on leverage. Remember, trading on leverage can amplify profits and losses, so it’s important to manage your risk.