What is a CFD?
A CFD (Contract for Difference) is a type of derivative trading. It permits traders to hypothesize on either the rising or falling of world financial market prices. These financial markets can be in the form of treasuries, indices, shares, currencies, or commodities. If trading CFDs, there is no need of retailing financial market assets. Instead, a CFD is sold in the form of units. By using leverage, the trader can buy much more of the asset than they actually have to pay for. For example, if they buy a Bitcoin CFD for $100, with 1:1000 leverage, they are actually buying $100,000 worth of Bitcoin. That means that just small movements in the price of the asset will have a major impact on their investment.
What is a Cryptocurrency?
A cryptocurrency is a type of digital money which is secure, anonymous, and does not involve the traditional banks. Generally, it is linked with a Blockchain which uses cryptography and records all of the transactions ever made with it. Examples of cryptocurrencies include: litecoin, bitcoin, dash, peercoin, dogecoin, and ripple. Traditionally, when you buy something you want to involve some type of third party to be witnesses. This is usually a bank or credit card, but you are paying of some fees or charges as required. When using cryptocurrencies, there is no need for this. Instead, all transactions are recorded on the Blockchain, and verified at a very low cost. As said earlier, cryptocurrencies are digital money, and with a secure Blockchain they are impossible to be forged or counterfeited. Apart from that, the sender cannot reverse it arbitrarily, the way credit cards are reversed. All transactions are final.
Benefits of Trading a Crypto as a CFD
Buying and selling cryptocurrencies can be a huge hassle. If you are going to buy just for an investment, a CFD is often a better way to go. This streamlines the process, making it much quicker and safer. If you're buying and selling, you don't need every type of Crypto. You can trade CFDs with just one. Finally, by using leverage CFD trading can potentially be much more profitable for you.
Who is CFDChain.com?
Our company, Revamp Scripts, has been involved in promoting online CFD trading since 2012. With many of the top CFD platforms now offering Crypto trading, we created this guide to help investors learn more about it, and to point them to the most reliable trading platforms.