Cryptocurrency Trading Explained: How It Works

Kraken is not available to residents of Maine, New York and Washington state. Interactive Brokers lets you trade a handful of cryptocurrencies through Paxos Trust Company and Zero Hash, including Bitcoin, Ethereum and Solana, for one of the lowest commissions in the market. Plus, IB allows you to buy Bitcoin and Ethereum futures rather than owning the currencies directly. And in this broker’s case, you can buy futures on the Chicago Mercantile Exchange, including Bitcoin, Ethereum and Solana contracts.

To trade cryptocurrency, you first need to obtain cryptocurrency. The platform you use will depend on the type of crypto you want to trade. Once you find an exchange that handles your currency, you’ll open an account, transfer funds to your crypto wallet, and make your purchase.

Crypto is for investors with a high risk tolerance.

• With more than 23,000 cryptocurrencies listed globally and hundreds of exchanges competing for attention, users often struggle to identify a trustworthy entry point.
• Futures may be an even more attractive way to play the volatility of digital currencies such as Bitcoin, because they allow traders to use leverage to magnify their gains (but also magnify losses).
• While there are different kinds of wallets, each has its benefits, technical requirements, and security.
• This can create wild swings that produce significant gains for investors or big losses.
• Our exchange was among the first to enable credit and debit card crypto purchases (2013) and continues to pioneer user-first innovations, including instant withdrawals and mobile-first trading tools.

And cryptocurrency investments are subject to far less regulatory protection than traditional financial products like stocks, bonds, and mutual funds. Once you have purchased cryptocurrency, you need to store it safely to protect it from hacks or theft. Usually, cryptocurrency is stored in crypto wallets, which are physical devices or online software used to store the private keys to your cryptocurrencies securely. Some exchanges provide wallet services, making it easy for you to store directly through the platform. However, not all exchanges or brokers automatically provide wallet services for you. calvenridge CEX.IO makes it simple for users to convert their digital assets into fiat currency, quickly, securely, and on their own terms.

Once recorded on the digital ledger, it is nearly impossible to counterfeit or hack cryptocurrency. The first mined Bitcoin cryptocurrency via the blockchain came into existence in 2009. By 2010, Bitcoin was tradable, with a market valuation of half a cent in May 2010 2. From 2010 to 2015, the crypto market exploded with the creation of altcoins—competing crypto like Ethereum. When you decide to sell, you close your position by choosing the amount of crypto you want to sell.

Your all-in-one crypto platform to buy, sell, trade, hold and earn cryptocurrencies1

Here, the difference is 204 points, meaning that you’d cut a loss of $2040 (13.6% on your margin deposit), plus a fee for the guaranteed stop-loss being triggered. After completing a thorough analysis on ether price movements, you believe the market will trend upwards from its current level of 3200. Because you’re going long, you open your position by electing to ‘buy’. Remember that, when trading CFDs, each contract will specify an amount per point of market movement. If the CFD is for $10 per point, and the underlying cryptocurrency price moves 10 points, your profit or loss – excluding costs – will be $100 per contract. To lock in any profits if the market moves in your favour, you can also enter a limit level.

What is crypto trading and how do you trade cryptocurrencies?

To view all FAQs, visit Fidelity Crypto® Help and access 24/7 virtual assistance, available in-app and online. This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals. IG International Limited is part of the IG Group and its ultimate parent company is IG Group Holdings Plc. IG International Limited receives services from other members of the IG Group including IG Markets Limited. Cryptocurrency is all the rage right now, but remember, it is still in its relative infancy and is considered highly speculative.

Liquidity is a pain point for many traders, especially when using smaller exchanges. CEX.IO addresses this by maintaining deep order books across more than 300 vetted markets. We screen assets for demand, on-chain activity, and reliability before listing, ensuring users avoid thinly traded or unreliable tokens. Our exchange was among the first to enable credit and debit card crypto purchases (2013) and continues to pioneer user-first innovations, including instant withdrawals and mobile-first trading tools. With intuitive multi-currency support, just select a digital asset, choose your desired purchase amount, verify your preferred payment method, and enjoy your crypto journey.