Purchasinga 'physical' Bitcoin token on one of the many exchanges may be a challengingtask for beginners.A fear of fund security, lack of regulation,and high volatility cause many investors toavoid buying cryptocurrencies.
SimpleFXhowever has simplified this process with a new cryptocurrency offering in asafe and secure manner. These instruments have proven to be wildly popular withclients, having gained traction as one of the group's core offerings recently.
Hodlingvs Trading -What'sthe Difference?
Of note,many brokers have been on the fence about cryptocurrencies recently given thetendency for clientsto hodl. Unlike its competitors however, SimpleFX however does not see thisas an issue, but rather a chance to betterserve its diverse client base.
Asstated in the table above, the main difference between buying and tradingcryptocurrencies is the right of ownership. However, in order to obtain a unitor fraction of a given digital asset, investors are obliged to set up an exchangeaccount and store the purchased instrument in a private wallet. The vast majorityof crypto exchanges still lack regulation, which increases the risk of the lossof your funds.
Newer andinexperienced clients might find it especially hard to finalizethe buying process. When purchasingphysical bitcoins (or other cryptocurrencies), opening an account may even takefew days, as the recent cryptocurrency boom has caused delays
Whatis more, for new users the maximum initial deposit is usually restricted to relatively low values.Add on the fees for transactions and withdrawals, and you may be in a situationwhere physical purchase is burdened with too many negatives. The mainadvantage, however, is ownership of a token, which could allow for profit inthe long term.
For example,if you had invested $1000 inBitcoin one year ago, your initial capital would have multiplied bynearlya factor of twenty at its peak. The value ofBTC began 2017 at below one thousand USD, butit skyrocketed to almost twenty thousand USD twelve months later.
SimpleFX supports a wide range of Bitcoin trading aswell as Bitcoin payments, which it started offering as soon it launched itstrading platform. The group has also recently expanded its offering to acceptdeposit with other cryptocurrencies such as Litecoin, Ethereum, Dash, andBitcoin Cash.
Of note, traders do not alwayscare about physical possession of an asset. When trading commodities, does a tradercount on an actual supply of wheat, copper or orange juice? No. And in terms ofcryptocurrency, the derivative instrument might be a much better and moreconvenient solution.
CryptoCFDs - EarningThroughPriceFluctuations
Cryptocurrencyderivatives like CFDs give an opportunity to speculate on whether a chosenmarket will rise or fall in value. In this case, Bitcoin trading works in thesame way as opening and closing positions on the forex market. Prices arequoted in traditional currencies, and traders can use financial leverage toboost profits even with a smaller initial deposit, gaining larger exposure tothe crypto market.
Ifsomeone does not want to go through the tedious process of setting up anexchange account, CFD trading may sound like a quicker solution. In this case,the trader does not access the cryptocurrency exchange directly - that is the brokerage'srole.
Retailbrokerages are forced to comply with tight financial regulations, and thus they guarantee a greaterlevel of security, better customer service and higher transparency. SimpleFXhas positioned itself to maintain a diverse offering, whilst being fullyregulated and transparent for clients' maximum piece of mind.
Itshould be also noted that CFD brokers have much more market experience thancryptocurrency exchanges, which have only been created relatively recently.Investment companies offer more developed analytical and trading platforms,allowing traders to open pending orders, use methods such as 'take profit' and 'stoploss', and use automatic strategies.
Summary- to Hodl orto Trade,that isthe Question
Purchasingcryptocurrency and speculation on derivatives both have strengths andweaknesses. If the investor wants to possess physical bitcoins, use them ineveryday payments and multiply capital in the very long run, then the hodl strategywould be the best.
However,wanting to quickly, safely and effectively join the dynamically developingmarket, it seems betterto bet on CFD brokers. Maybe Bitcoinwill not appear in your wallet, but you will gain fund security, bettersupport, and investment opportunities even during the downward momentum of abear market.
In terms of wallets, SimpleFX' clients value cryptopayments for the speed of transferring funds, while also checking confirmationson the blockchain network to verify if the payment was already processed. Thegroup emphasizes security measures, as 95 percent of SimpleFX's crypto fundsare stored in an offline cold wallet.
By extension, SimpleFX has kept the remaining 5percent in a hot wallet to make sure payments are processed within a few hoursafter submitting withdrawal requests. Currently, SimpleFX's clients have astrong interest in not only Bitcoin but a wide range of altcoins as well.
