Cryptocurrencies are virtual currencies which operate independently of banks and governments, but can still be exchanged – or speculated on – just like any physical currency.
Bitcoin, the most popular Cryptocurrency, is a cryptographically-secured digital currency that operates outside of the mandate of a central authority.
It was created in 2009 by the pseudonymous Satoshi Nakamoto, and originally conceived as a method of payment that wouldn’t be subject to government oversight, transaction fees or transfer delay – unlike traditional ‘fiat’ currency, but it both lacks widespread adoption and is currently far too volatile to provide a real alternative to fiat currency; vendors need to revise their prices constantly in response to its swings in value.
This means Bitcoin is used first and foremost as an investment, resembling gold and other precious metals more than it does traditional currencies. Like commodities, it is beyond the direct influence of a single economy, and largely unaffected by changes in monetary policy. Back in 2010, Bitcoins were worth around 0.003 cents each. As of October 2017, that figure is upwards of $4200 – though this value has proved volatile, with frequent intraday swings. In that time, hundreds more cryptocurrencies have emerged, all with unique features and applications.
Advantages of CFDs on Cryptocurrencies:
Unlike traditional trading of Cryptocurrencies, contract for difference (CFDs) on Cryptocurrencies, are financial instruments that allow traders to invest and take advantage of both prices moving up (going long) or prices moving down (going short) without having to pay for owning the Cryptocurrency itself.