How to trade cryptocurrency

How to trade cryptocurrency
How to trade cryptocurrency? - Trader tips

Trading Cryptocurrencies with AvaTrade

The cryptocurrency trading world has exploded in popularity over the last few years, and AvaTrade is here to help you take advantage of UK trading these digital currencies. The future for cryptocurrency markets is bright, as it is one of the biggest drivers of new traders into the financial world. With crypto trading in its infancy, many people believe that we are just starting to see what is possible for this sector of finance. To ensure that you will not miss out on any trading opportunities, AvaTrade offers you first class access to trade a choice of cryptocurrencies from our secure trading environment.

It’s time to try us.
Enjoy competitive spreads & high leverage.

How to Trade Cryptocurrencies With AvaTrade

AvaTrade is a leading UK cryptocurrency trading  broker that has worked hard to ensure that we offer all the tools, services and features to trade cryptos seamlessly. We provide intuitive trading platforms and effective trading tools to ensure that you step into the trading arena with confidence. AvaTrade also provides the same reliability, safety, security, and transparency of transactions in the crypto space as we do in all of the other financial markets. As a result, trading cryptocurrencies with AvaTrade comes with many benefits for both new and experienced UK traders worldwide.

Some of the major advantages of trading cryptocurrencies with AvaTrade, the #1 UK forex and CFDs broker, include:

  • Regulated, award-winning UK trading online forex broker
  • Access to innovative automated trading platforms that are easy to use and to navigate
  • Secure deposits and withdrawals
  • Leverage of up to
  • Competitive spreads
  • Low fees and commissions
  • Digital currency trading around the clock, including the option of closing positions on the weekends (Saturdays and Sundays)

To help you on your cryptocurrency trading journey, AvaTrade has provided a wealth of trading educational material so you can familiarize yourself with digital currencies and how to trade them on the AvaTrade trading platforms.

What is a Cryptocurrency?

A cryptocurrency is a digital currency that is traded online between individuals and businesses. This digital currency is fully decentralized, which means that it is not formed or backed by central banks, governments, or even by financial institutions. In addition, it has no physical form, meaning that it only exists as digitized currency on the Internet. There are no physical coins or bank notes and so, cryptocurrency is intangible. Instead, it remains in a data format online and it is visible at any time on the blockchain ledger. It can be sent from person-to-person via digital currency wallets, via email or most commonly, through the blockchain networks. Crypto only has value because people give it value, and not because of its association with the performance of a corresponding economy, with a commodity, or any other macroeconomic reality.

There are many reasons why cryptocurrencies are superior over traditional currencies. These include:

  • Wide accessibility
  • Minimal fees
  • Lower transaction costs
  • Zero commissions
  • Secure
  • Credit cards are not required
  • No third parties are involved in brokering transactions

Understanding Cryptocurrency Trading

When you use cryptocurrencies, everything takes place over an online network known as the blockchain.  This is a public ledger and it is distributed freely over the Internet. This allows all people on the network to access the exact same ledger and the different digital currencies, such as Bitcoin. As a result of complex algorithms, each digital currency is easily identified, based upon a pre-set programmable code which is built in to the software. Since everyone can access the same ledger at any time, this gives transparency.

The blockchain, or the technology that has created these digital tokens, is the real appeal of digital currencies. The reason for this is that there is no other transmission mechanism that is more secure, efficient, cost-effective, and transparent than the blockchain.

Cryptocurrency trading is still in its infancy, yet many people around the world are starting to trade these digital currencies. When it comes to cryptocurrency trading though, Bitcoin trading (BTC) are by far the most popular digital currency. It is considered to be the gold standard in the crypto space and it is generally where people start out. There are, however, a huge range of altcoins available, being alternatives to Bitcoin, that are quickly growing in market share and in value. Some of the top-ranking altcoins include Ethereum, Ripple, Litecoin, and Bitcoin Cash, just to name a few. Take your time to familiarise yourself with the different cryptocurrencies in the market and remember that now is your opportunity to start trading altcoins with AvaTrade.

Enjoy the benefits of an internationally regulated broker!

Ways to Trade Digital Currencies

In order to start trading cryptocurrencies online, you will need to start with a Bitcoin wallet, and you will purchase Bitcoin (BTC) with fiat currency, such as the US dollar or euros. This will then give you the Bitcoin needed to enter the cryptocurrency arena. If you chose to trade any other altcoins, the process is the same initially except that once you have purchased your Bitcoin, you can then exchange the Bitcoin on a digital currency exchange platform to the altcoins of your choice.

The fact is, this process is complicated and very cumbersome. In addition, there are many steps involved in the process and you may need multiple digital accounts to exchange the coins that you have purchased, and then you will need to store them. When the process is so complicated, this provides hackers and cyber criminals with the perfect platform to take advantage of others. As a result of these obstacles and complexities, many people may avoid engaging in the cryptocurrency space.

But this is where AvaTrade takes centre stage….

The benefit of trading cryptocurrency on the AvaTrade UK platform is that you don’t have to deal with any of the complexities associated with trading digital currencies.

To begin with, at AvaTrade, we don’t bother with digital wallets and we do all crypto trading UK via contracts for differences (CFDs). Here, you are simply speculating on the underlying price of the asset in a CFD and trying to profit from the movement of the asset price. CFDs are derivative trading instruments that allow you to speculate on the price fluctuations of a cryptocurrency without taking ownership of the actual instrument.

There are many advantages of trading in the CFD market and in the cryptocurrency space. Cryptocurrency CFD trading simplifies the entire trading process, leaving you to only worry about profit and loss. You also do not need to worry about creating an eWallet or storing your digital currency and any other such complications that make the process much more difficult than is absolutely necessary in this market.

By not requiring a digital wallet and making your transactions on our secure online trading platform, you can take advantage of the Secure Socket Layer (SSL) technology that fully encrypts all of your trading activities and personal information. We take the security of your personal information very seriously and have ensured that we have the top technology and security processes to protect all of our clients.

What Should You Watch Out for While Trading Digital Currency?

Traders across the United Kingdom see the inherent value in trading cryptocurrencies including Bitcoins. Trading cryptocurrencies enable you to diversify your trading portfolio and can also sometimes protect you against the devaluation of financial assets that are listed in pound sterling (GBP).

Since so many individuals and retailers now accept digital currency as an internationally accepted payment option, it has real value. It is important to note however, that the volatility in this market is much higher, as it is so new in the global markets. That being said, the future for crypto is very bright, not only in the United Kingdom, but even across the world.

Cryptocurrencies Globally

Across Asia, there are multiple companies that have approved the usage of cryptocurrency on a widespread basis. Countries such as South Korea, Japan, and the Philippines have all regulated crypto trading in some form or another. This is a huge boost to this new market, as it gives it a certain amount of legitimacy. Interestingly, it was the dark web that saw Bitcoin thriving initially, as there was a certain amount of anonymity to the transactions. It is important to note though that governments and banks both risk losing control of the financial markets by ignoring cryptocurrencies and worldwide, they are starting to take measures to bring it into the mainstream. This is something that traders have understood for some time, and it now seems as if the regulators and the relevant authorities are taking steps in trying to monitor this space.

Previously, people used Bitcoin as a way of conducting anonymous transactions for both legal and illegal actions. Thanks to the ability of the blockchain to form what is known as “smart contracts”, the growth and popularity of digital currency has been exploding for the last few years. In response, its legitimacy has improved accordingly. Today, there are many e-commerce operations and land-based businesses that are adopting platforms that allow you to take advantage of cryptocurrencies. As a result, the efficiency, convenience and popularity of these organisations has increased drastically.

Cryptocurrency Price Movements

Just as in other financial markets, the actions of the trading community can drive the prices of cryptocurrencies both higher or lower. For example, geopolitical uncertainty can drive investors away from conventional assets, in the same way we have seen investors turn away from the British pound after the announcement of the Brexit. This can lead people to buy crypto as a means of providing a safe haven for their financial wealth.

Also, China has been a major feature of the cryptocurrency debate, as capital controls have forced money to stay within the country. As a result, and for a while, Bitcoin was strengthening in value since so much money was leaving the country via the crypto markets. The Chinese have been a major player in the volatility, as in 2013 it was reported that China was going to boycott Bitcoin trading altogether. This caused a rapid drop in the price of the digital currency, as it was feared that Bitcoin was not going to be adopted in one of the world’s largest markets. The next year, Bitcoin exchanges were no longer allowed to receive deposits from banks or financial exchanges. By the time 2017 rolled around, the People’s Bank of China (PBOC), was considering blocking token offerings via ICOs on Chinese bourses. Recently though, the Chinese authorities seem to have relaxed some of their measures, and this could help the growth of this market as such a large population can only make for an increase in demand.

Whether you invest in digital currency by purchasing the tokens themselves and holding it in a digital wallet, or if you trade cryptocurrency as a CFD, this can be an invaluable component of your financial portfolio, as demand and adoption should only increase from here.

Don’t miss your opportunity! 
Enjoy competitive spreads & high leverage.

Top Tips for Trading Cryptocurrency at AvaTrade UK

Trading digital currencies at AvaTrade is much like trading many other financial markets, including forex and stocks trading.  With CFD trading, you are trying to trade in the direction of market fluctuation in order to profit from the difference of the price of the asset when you entered the trade and when you exited the trade.

Luckily, your account at AvaTrade allows you to trade crypto currency regardless of the size of your account, plus both new and professional traders can take advantage of the cryptocurrency market and its many advantages. As with all other types of trading, remember to pay attention to macroeconomic indicators, news reports, and any other factors that could impact the price of the digital currency you are trading. Take the time to do your analysis of the markets. In this way, you can act on market movements and trade accordingly.

As with any other financial market, there are two main types of analysis that one should do:

  • Technical Analysis – This relates to trading charting, indicators, and other such research for speculation as to where future prices of assets are moving.
  • Fundamental Analysis – This examines factors that relate to the underlying market, which are typically macroeconomic factors. In the cryptocurrency world, fundamental analysis also includes such things as regulatory issues in large economies, and of course, any news involving crypto exchanges.

A Word on Trading Cryptocurrencies

In order to trade effectively in the cryptocurrency space, it is vital to understand what drives the markets. Some factors will be positive for the value of a digital currency where as other factors or news will negatively impact the price of the cryptocurrency. For example, the announcement of the Chinese government’s desire to impose penalties on digital currency and trading platforms, has, of course, been negative for the market. On the other hand, the wider adoption, and the fact that so many other Asian economies accept crypto, is very positive. This causes extreme volatility at times and can make for wild price swings on a day-to-day basis.

Traders, of course, can benefit from this volatility, as the explosive move higher, that we saw in most of 2017, showed. However, 2018 has not been so good for crypto, and we have seen a massive swing lower. Despite these fluctuations, the price swings offer a lot of opportunity for the trader that understands the markets and positions themselves accordingly.

Regardless of what happens next, blockchain technology, the underlying technology behind these digital coins, is here to stay so if you want to get in on cryptocurrency trading, your time is now with the #1 UK broker – AvaTrade!

Why Choose AvaTrade for Your Cryptocurrency Trading?

AvaTrade is ahead of the competition and we offer many benefits to trading cryptocurrencies that include:

  • Auto Trading Functionality – AvaTrade allows for the use of pre-programmable trading bots or algorithmic trading platforms. The cutting-edge technology allows you to copy the trading of professional, top traders, or to trade socially.
  • Short Selling – Short selling allows you to generate profits when markets are falling. By speculating that the prices will fall in a declining market, you can generate profits.
  • Leverage – AvaTrade UK offers generous leverage to traders, allowing you to borrow funds from us to place your trades. The required margin to trade is much smaller when you have leverage available.

How to trade Crypto main FAQs

  • Is Bitcoin really a digital form of gold?

    For some time now Bitcoin has been referred to as the “digital gold”, but in truth it has no direct relationship with gold. It was given that name because proponents of cryptocurrencies see them as a good hedge against inflation and against weakness in traditional fiat currencies brought on by central banks printing money non-stop. In truth Bitcoin and gold do not move in tandem and as of 2020 Bitcoin has been tied more closely to the movements in the S&P 500.

  • Do I need a cryptocurrency wallet to trade cryptocurrencies?

    At AvaTrade we are not offering the actual cryptocurrencies, but instead are offering CFDs tied to the cryptocurrency as the underlying asset. This saves traders the trouble of learning how to set up a wallet and how to transact with cryptocurrencies. Instead you can spend your time focused on trading. Plus, by using CFDs rather than the actual cryptocurrencies we can offer our clients the ability to use leverage.

  • Why should I trade cryptos at AvaTrade?

    There are many very good reasons for trading cryptos with us. These include the ability to use margin, the wide variety of cryptocurrencies we offer as CFDs, and the lack of any commissions, bank fees, or transaction fees. In addition, we allow trading cryptos against a variety of fiat currencies, and unlike the cryptocurrency exchanges we are regulated by six different regulatory authorities, ensuring your funds are always protected.


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