The Future of Financial Markets – Cryptocurrency Trading

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Cryptocurrency is rapidly becoming one of the most popular media of transactions on the internet. Cryptocurrencies are traded in bitcoins. This means that they are completely digital and there is no physical existence of a cryptocurrency. When an individual holds a bitcoin, it means that they have complete agreement from every member on the bitcoin network that they are the sole owner of that coin. Not only that, all cryptocurrency users should agree that the bitcoin holder acquired their currency from a legitimate source or miner. So, a major question for any person who wants to start cryptocurrency trading would be about what cryptocurrency miners do.

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Cryptocurrency miners are known by different names in the digital currency market. They can be called as the crypto miners or even the bitcoin miners. When a transaction takes place on any bitcoin network, somebody needs to very that the currency being used to make that transaction is legitimate and authentic. Therefore, cryptocurrency regulators authorize miners around the world, to crack the code of the block containing the transaction. The first one to break the blockchain code and authenticate the transaction earn cryptocurrency of their own.

Hence, miners have an important role to play in any type of cryptocurrency transaction. Once the transaction has been verified, it is added to a cryptocurrency general ledger. Hence, every digital currency transaction taking place over the internet is securely recorded in a ledger. Cryptocurrency miners need to use cutting-edge technology in terms of hardware and software to perform this complex mathematical function in a quick and reliable fashion.


The blockchain is a revolutionary concept that has altered the way people make online transactions. The concept has virtually made the online ledgers for cryptocurrencies impossible to hack into. The block works on a peer to peer framework. What this essentially means is that each user is responsible for creating their own block. Once the block is finalized, it forms part of a continuous chain being managed by millions of users around the world. Since there is no single server of a blockchain, it is hard for hackers to decrypt the code and figure out what lies inside the blockchain.

Cryptocurrency regulators use the blockchain to create a ledger of all digital currencies being traded around the world. Hence, blockchain can be referred to as a backbone of cryptocurrency trading. Some of the information that a blockchain may contain includes:

  • The details of the sender, receiver, and the number of digital coins each is willing to transact.
  • A hash which is considered as a fingerprint for each transaction is attached to each block.
  • Each blockchain contains a reference to its successor in a blockchain.

How Can You Trade Cryptocurrency

The concept behind cryptocurrency trading is the same as trading on a stock market. You want to buy when digital currency when the market is low and sell it when the market is trading high. Many do so by using Bitcoin Robots for automated trading. So, how does the cryptocurrency trading work? Well, there are two essential components to trading cryptocurrency on any platform. First, being a cryptocurrency wallet, and the second one is the exchange where you would trade your bitcoin or any other digital currency. Let’s start to gain more understanding of what a cryptocurrency wallet is.

Digital Currency Wallet

Cryptocurrency wallet is like a personal vault. It helps you hold all the currency that you own and allows you to withdraw and store currency as you make a transaction over the internet. Since cryptocurrency wallets are digital, platform organizers want to make sure that there is minimal storage space required to store each bitcoin in your wallet. Therefore, all currency is held in a central depository, while a confidential reference is provided to each wallet owner to authenticate which currency belongs to him or her. This reference is made by using a private and public key combination.

A private key to each coin is given to the sole owner of that coin, this private key refers to a public key in the repository. When a transaction takes place, the private key is transferred to the new owner of the coin. In this way, there is minimal bandwidth used to make huge cryptocurrency transactions over the internet.

Cryptocurrency Exchange

Like any other form of asset, cryptocurrency also requires a platform where they can be traded between a buyer and the seller. There are many different types of platforms available on the internet to trade cryptocurrencies. Some allow trading on a public platform like stock markets while others directly connect the buyers and sellers to exchange their digital currency. Next, we take a closer look at each of these trading platforms.

  • Traditional or broker based currency exchange

These currency exchanges comprise of buyers, sellers, and brokers that come together on a common platform exchange their digital currency assets. Since brokers are coordinating with different users on the currency network to match a seller with a buyer, the prices are constantly fluctuating in the traditional currency exchange. Brokers such as Global CTB are required to follow the market all the time, hence they charge a certain fee to the buyer and the seller when they make a successful trade. This is one of the most reliable forms of currency trades available in the digital currency market. In fact, traditional cryptocurrency exchange platform has been used to trade FIAT currency as well since its value is primarily derived from its supply and demand in the market.

  • Digital currency brokerage

These brokerage companies such as ETFinance allow traders to swap their currency with them at a price defined by the brokers plus an additional premium. This is a convenient way of trading cryptocurrencies since brokers are easily accessible and the trade does not take much time. Due to the added convenience provided by these brokerage firms, new users of digital currency try them first before making their account in a currency exchange.

  • Direct trading platform

In some geographical locations, trading through a currency exchange or brokerage house such as STR Capital  is not available. Hence, users trade directly among themselves. The transaction takes place by buyers asking sellers for the price they are willing to offer for their coins. If a user likes the seller’s offer, they buy it. Otherwise, they quote their own buying prices. The seller either matches the offer or both parties meet somewhere in between. The transaction is quick with no extra charge. However, there is one evident constraint in this type of currency trade which is the reliability issue. Since there is no broker or a central exchange platform, you never exactly know who is on the other side of the trade. Hence, it is always recommended by experts to do proper research before approaching the other party while doing direct trades.

There are cryptocurrency funds available in the market as well. However, their premiums are high as they do all the work from selecting the currency from trading it to maximize your profits.

Once the currency platform has been selected, users will have to complete the following steps:

  • Sign up for a digital currency wallet on the selected exchange. Some experts suggest that you set up a 2-level authentication method for added security. Two level authentication means that a passcode will be sent to your smartphone every time you try to log in to the exchange.
  • Link your debit or credit card or a bank account with your currency provider. This will allow you to buy digital currency and transfer profit margins to your local accounts.
  • Finally, you need to select which currency you want to invest in.

Famous Platforms for Trading Your Cryptocurrency

There are many currency trading platforms such as MDX500, that available online for users to exchange their digital currency coins. However, there are some that are more famous than the others. Here are a few that are currently trending in the market:


Considered by many as one of the most reliable modes of digital currency transactions available on the internet, Coin Base is one of the pioneers of cryptocurrency trading. They offer multiple services to their clients including wallet, brokerage, and other useful currency options. The company is very thorough in their research and business practices. They have made a name for themselves by raising funds from one of the world’s most successful organizations. Another advantage of using the coin base is that they are always striving to make their application more user-friendly and accessible to people around the world. All these characteristics of the coin base help attract thousands of new users every month, which means there is more opportunity for everyone to buy and sell their cryptocurrency asset.

Buying stocks of a digital currency trust

Another interesting way to invest and trade in digital currency is to invest in a cryptocurrency trust. These trusts trade on a regular stock market like the New York Stock Exchange and allow you to benefit from the rise and fall of cryptocurrencies without having your own digital currency wallet or even a digital currency account on the internet. One of the most famous digital currency trusts is the GBTC which is a stock symbol for Bitcoin investment trust. GBTC holds a number of bitcoins in the asset account. As the price of Bitcoin goes up, so does the value of GBTC. In this way, the stockholders benefit from the bitcoin currency trading without much effort. Since the trust does not charge you brokerage, it can be quite inexpensive as well.


Bitpanda is as much popular in Europe as Coin base is in the United States. The website allows users to trade some of the most popular cryptocurrencies including Ethereum, Bitcoin, Dash, and Litecoin. Users can do online transactions using credit and debit cards and also online bank transfers. The website has easy to use interface and is considered by many as the most convenient way to do online digital currency trading. Since Bitpanda specializes in digital currency transactions, the users of this platform do not need to pay any processing fee while sending or receiving cryptocurrencies.

Quick Tips for Digital Currency Trading

  • New users to cryptocurrency trading need to understand that cryptocurrency exchanges are not as regulated as regular stock exchanges. Hence, the prices of currencies like Bitcoin and Ethereum fluctuate more frequently and drastically than regular stocks. Therefore, investors need to be very careful when they want to buy and sell their cryptocurrency.
  • Another important aspect while investing in a digital currency market is to ‘hedge’ your portfolio. This essentially means that you want to minimize your risks in case the digital currency markets start moving downwards. It is better to diversify your portfolio in different currencies. You can also diversify your portfolio in different geographical locations such as Europe and Asia as well.
  • Beginners can take advantage of less risk form of trades in the digital currency markets. These could be investments in trusts or cryptocurrency funds. Although the fees might be higher, these platforms will help you minimize your investment risk.

Checking your desired cryptocurrencies market price

There are many online portals available on the internet that act as a database for each of the currencies being mined around the world. These websites like allow users to see useful information amount about each currency being traded on the internet. This information may include:

  • The currency symbol that is used for trading on the exchange
  • The market cap which is the total volume of the currency available on the exchange
  • Price at which it is currently trading in the online marketplace
  • Percentage increase or decrease in the currency price in the last day or the week

Concluding Thoughts

Currency trading is fast becoming one of the most lucrative professions in the financial sector. Anyone who wants to understand how most transactions will take place in the next decade should invest their wealth in currency trading. With so many options for trading digital assets available in the market, it is a good means to generate high-profit margins in this regulated environment.