The world is constantly changing, and technology is something that changes the fastest, and sometimes even those deeply interested find it difficult to keep up with it. Understanding this, in the following article for beginner investors, we have presented the basics of the cryptocurrency market, while explaining some important terms that any beginner investor may come across. We also presented what exactly the trading process looks like on our xStation platform.
Popular cryptocurrencies
The most popular cryptocurrency that everyone knows and talks about is Bitcoin. There are also other cryptocurrencies (so-called altcoins) such asLitecoin, Polkadot, Chainlink, Dogecoin, Stellar or many others. With the growing popularity of the cryptocurrency market, thousands of other altcoins with different market capitalizations and use cases have emerged.
Bitcoin, apart from stablecoins, is the most price-stable and oldest cryptocurrency. However, it is believed that other projects such as Ethereum, Solana, or Cardano could overtake Bitcoin in terms of popularity or market valuation in the future.
How to buy Bitcoin and altcoins?
Like the stock market, the cryptocurrency market has its own exchanges and brokers through which investors can buy and sell their cryptocurrencies. To start trading cryptocurrency CFDs via XTB, all you need to do is open an investment account and successfully pass the verification process. Once you have deposited funds into your investment account, you can start trading.
XTB also provides an educational platform accessible from the homepage and many hours of training and videos embedded directly on the trading platform to help you understand the operation, opportunities and risks of leverage in cryptocurrency CFD trading.
Is it possible to get Bitcoin for free?
Yes, you don’t have to buy Bitcoins to own them. Bitcoin can also be mined by performing complex cryptographic equations using the computing power of computers in a process called Bitcoin mining.
Bitcoin mining involves validating blocks of data and adding records of subsequent transactions to the blockchain. However, this process requires access to powerful computing power to be effective.
What can you buy with Bitcoin?
When investing in Bitcoin CFDs on our xStation platform, you cannot use it to conduct transactions on the blockchain.
Until you close a profitable position, this position “works” with the movement of the price of the digital asset. Once the position is closed, the funds are returned to your balance, which you can withdraw and enjoy the money you earn.
In general, however, cryptocurrencies can be used to transact and buy physical goods. In the United States, retailers such as Whole Foods, Nordstrom, Etsy, Expedia, and PayPal allow you to make payments using cryptocurrencies.
How stable are cryptocurrencies?
Cryptocurrencies are not stable, market volatility is huge, which is both a disadvantage and an advantage – depending on the investor’s point of view. Many beginner investors are looking for interesting investment opportunities, and looking at the charts, cryptocurrencies indeed seem to be instruments that provide many such opportunities.
However, it is worth remembering that all this is interspersed with periods of strong growth and serious panics, during which most investors sell cryptocurrencies. An example is the price of Bitcoin in 2020/2021.
In March 2020, an average of $4,000 was paid for one Bitcoin, while already in January 2021, the price of Bitcoin increased tenfold – to $40,000. Continuing its bull run, BTC reached an all-time high of $65,000 at the end of April 2021. Then in May, the price fell and Bitcoin consolidated around $35,000 for several months.
However, in October, Bitcoin’s price began to rise spectacularly again and reached a new all-time high in November, testing $69,000. In December 2021, Bitcoin was below this level again, reaching a value of $40,000. As a beginner investor in the cryptocurrency market, you should know that smaller cryptocurrencies were even more volatile at the time.
As such, we are dealing with an extremely volatile market that presents opportunities for both long-term investors and short-term traders. However, this is of course associated with a higher investment risk.
How to invest in cryptocurrencies?
As a beginner investor in the cryptocurrency market, you have the choice of investing in the tech industry related to this market by investing in stocks related to digital transformation or trade cryptocurrencies themselves. There are several differences between these methods. Of course, you can use both methods at the same time and try to generate profits from both cryptocurrencies and stocks combined.
Investing in cryptocurrencies
Investing in cryptocurrencies is possible by buying shares of blockchain and metaverse companies or ETFs, which is also seen as less risky. Of course, the potential profits from such an investment may be smaller than those from CFD trading due to the lack of leverage and less volatility of the traditional market relative to the cryptocurrency market.
Blockchain and metaverse transformation stocks continue to offer many opportunities and good prospects for investors who don’t have the problem of high market volatility. At the same time, the long-term trend related to digital transformation seems to be really promising.
In xStation we have shares of many blockchain-related companies and this is a short list of a few of them: Coinbase (COIN. US), Square (SQ. US), Riot Blockchain (RIOT. US), Marathon Digital Holdings (MARA. US), Argo Blockchain PlC (ARB. L), Bit Digital (BTBT. US), Invesco Elwood Global Blockchain ETF (BCHN.UK)
By buying shares of listed companies in the digital transformation sector, an investor can join the Metaverse trend. There are several examples of such companies: Meta Platforms (FB. US), Nvidia (NVDA. US), Adobe Systems (ADBE. US), Matterport (MTTR. US), Roblox (RBLX. US), AMD (AMD. US), Unity Software (U.US), Match Group (MTCH. US), Vuzix Corp (VUZI. US)or Autodesk (ADSK. US).
Crypto Trading
On our xStation platform, you have the opportunity to trade not only Bitcoin, but also other popular cryptocurrencies.
Many beginner investors are interested in cryptocurrency trading. Beginner traders can trade cryptocurrencies on our xStation platform using CFDs (contract for differences) along with the full potential of available leverage. A CFD can be compared to a contract that pays the difference between the opening and closing price of a given transaction without the physical delivery of the instruments being traded.
Cryptocurrency trading is aimed at risk-conscious traders and speculators, as the price fluctuations in the cryptocurrency market are huge – even without taking into account leverage. Thanks to it, beginners in the cryptocurrency market have a chance to achieve high profits, but it should be remembered that this mechanism can also cause deep losses.
Trading cryptocurrency CFDs with the xStation gives you the benefits of zero fees and commissions, a low spread, and the ability to use leverage. The only cost is swap points, which are credited to the result of the open position every day after 00:00 at night.
Thanks to leverage, trading cryptocurrencies with CFDs only requires a certain portion of the entire position. For example, with 1:2 leverage, you have the option to open a $10,000 contract with only $5,000 in margin.
CFD trading gives traders exposure to the cryptocurrency market without the need to create a special account on a cryptocurrency exchange and without complicated methods of depositing funds.
Trading crypto CFDs also gives you the opportunity to open short positions, where traders can make money even when crypto prices are falling. This allows you to implement many different strategies during your trading sessions depending on the current price of Bitcoin. We also provide a variety of different indicators on our trading platform, such as the RSI “Relative Strength Index”, Fibonacci levels, and many more. All of these can make your trades more effective, even if you are a very beginner trader.
A beginner investor in the cryptocurrency market will find many popular cryptocurrencies on our xStation platform, such as: Bitcoin, Ethereum, Cardano, Litecoin, Uniswap, Solana, Chainlink, Polkadot, Tezos, Ripple, BitcoinCash or Dogecoin.
Online crypto trading
You can see how popular it has recently become to trade cryptocurrencies or invest in shares of listed companies in the digital transformation sector through online trading platforms.
That’s why we allow you to trade on both our desktop and mobile xStation platforms. By using it, even novice investors in the cryptocurrency market can react to dynamic market movements and trade cryptocurrency prices at any time, from anywhere in the world, without leaving home. Our priority was to provide safe, fast, and intuitive platforms that can be used by both novice and experienced traders.
Both platforms have been built by our developers in such a way that they meet the requirements of novice traders.