Cryptocurrencies are not born as an investment but as exchange currencies or to carry out or finance projects. Over time, however, due to numerous factors, they have mainly become full-fledged financial investments. It all starts with Bitcoin which has two defects that are irreconcilable with using it as a currency to make purchases: Cardano Ecosystem Transactions are not immediate , they can last several minutes in which the money is in a sort of “digital limbo” and this slowness cannot compete with current credit card or e-wallet transactions which are practically instant.
Bitcoin’s value fluctuates all the time and its high volatility lends itself little to pricing a product or service.
You can invest in Cryptocurrencies mainly in two ways: With Exchanges and CFD Brokers , we see the characteristics of both systems.
Exchanges are sites that allow you to buy cryptocurrencies and exchange them with each other based on the market price. These websites are not regulated markets, so they present some risks , in fact one of the most famous exchanges in the world, the now defunct Mt. Gox caused the loss of hundreds of thousands of Bitcoins belonging to confident investors, when it “collapsed”. Exchanges also allow conversions of Fiat currencies (Euro, Dollar, etc.) into cryptocurrencies and for this reason they can (in theory) be used to invest. Exchanges charge a fee for these transactions , which makes them very expensive, especially if you do a lot of transactions.
Exchange: Advantages and Disadvantages
They allow you to “physically” hold the cryptocurrencies you buy.
They contribute to the exchange and price fluctuations of cryptocurrencies.
Transactions are not immediate , you have to wait for the blockchain to be confirmed.
They charge commissions for each trade.
They are not regulated , they do not have licenses as financial operators.
They are not covered by any guarantees or protections for investors.
You only make money if cryptocurrencies increase in value.
CFD broker to invest in Cryptocurrencies
Let’s start by saying that CFDs (contracts for difference) are derivative contracts that are negotiated with the same price as the security to which they refer. CFD Brokers are intermediaries who offer these contracts and allow you to buy them (aiming upwards) and sell them (aiming downwards), without commissions. So CFD Brokers allow you to invest in Cryptocurrencies as in any other title or asset, in a simple and cheap way.
CFD Broker: Advantages and Disadvantages
Benefits: They are regulated intermediaries , in possession of an operating license, issued in Italy by CONSOB.
They allow for immediate transactions.
There is no risk of theft because cryptocurrencies must not be held “physically”.
No commissions are paid for transactions performed.
They offer a guarantee to protect the deposits made.
Yes, you can earn even if prices fall , just aim for the downside.
Disadvantages: You don’t really get hold of cryptocurrencies, you only speculate on price fluctuations.