Cryptocurrencies, like Bitcoin and Ethereum, are starting to catch on in popularity. No longer are these the provenance of just computer nerds and those that have a lot of money to throw at long shot investments, the digital currencies are likely here to stay. They are far more reliable than they were even five years ago, and not that Bitcoin especially has finished going through its growing pains, cryptocurrencies are beginning to be hot trading items, too.

When it comes to trading these, you have a handful of options.

Some Forex brokers are even including cryptocurrencies—mainly Bitcoin since it’s the main player right now—in their currency pairs. We’ll talk more about the choices that you have when it comes to cryptocurrency trading below.

Forex

A lot of Forex brokers are making it a point to include the major cryptocurrencies, mainly Bitcoin, but Ethereum is receiving attention, too. This is not a universal trend, but it is a growing one. Bitcoin, as you might know, had a lot of issues when it first emerged. Now that it’s several years old, it is a lot more reliable and most major businesses consider it an acceptable currency. Forex brokers offer their currencies in pairs, so if you’re trading the Bitcoin, it will be offered against another currency. The U.S. dollar and the Chinese yuan are the two currencies that you will see paired with the Bitcoin most frequently, but we expect to see BTC offered up against all of the major and secondary currencies in the next five to ten years. This opens up a lot of trading opportunity, and allows more people to gain access to profits that will come from the Bitcoin’s movement—with a better safety net than what a lot of the primary cryptocurrency brokers now provide.

As always, be sure that you follow your safety rules and risk management protocol when you trade. You should always use stop-loss points and do thorough analysis before you enter a trade. Luckily, Forex brokers allow you to do this in a very convenient manner, especially if you’re trading with the MetaTrader platform.

CFD

The increase in popularity of contracts for difference trading is a good sign that this business is going to stick around for a while. Nowhere is this more exciting than in the world of cryptocurrencies. Both of these technologies are relatively new to the average person, and together they can present some great opportunities for traders. CFD trading is newer and it’s exciting, but like any other form of trading, it is risky. There’s a chance that you can lose money, and that’s especially true when it comes to some of the more unpredictable and fast moving cryptocurrencies. When you’re trading—regardless of how you trade—always follow proper safety procedures, use stop-loss measures, and be smart about what you do. There’s a lot of opportunity in the world of cryptocurrency CFDs, but also a lot of risk.

Other Brokers

There are a handful of brokers that are not Forex brokers that allow you to buy and sell options or other derivatives on cryptocurrencies. Just like with any other broker, you need to be sure to follow all of the steps that you would when ensuring that you are using a reputable source, and are not exposing yourself to unneeded risk. For example, you want a broker that is legitimate, able to do business legally with clients in your region, and has a good history of submitting withdrawal requests in a timely manner. Read reviews online, talk to other traders, and be confident before you make a deposit anywhere.

The Currencies

One of the cool things about Bitcoin, other cryptocurrencies, and money in general, is that it has value based on its demand. This might remind you of your high school economics class because that’s the main premise behind how currencies work. People believe that they have value, and thanks to that, they do. They can be used to buy things, or can be traded for other currencies. Activities like this always present opportunities for you to profit. For example, you may have some Ethereum that you no longer want to hold on to. You can purchase something with it, and turn around and sell that for U.S. dollars. Is it a perfect process? No. You can lose money doing this just like you can with any other form of trading. The point is that cryptocurrencies—as long as they continue to hold value—have a lot of potential that you can’t find with other types of trading.

If you are going to invest in a cryptocurrency for any period of time, you will need the right setup. Be sure that you have a top of the line wallet for your cryptocurrency—whatever one you might be using. Your wallet is the main piece of technology protecting your currency from the outside world. Whether you just use one on your smartphone, or you have an external drive wallet that you use, be sure that you are knowledgeable and follow through with all of the basics when it comes to cryptocurrency security. You can learn more about wallets on other sites.

Also, be sure that you use a high quality broker, whether you’re using Bitcoin or anything else. You want one that will allow you to buy and sell the currency of your choice, but there might also be other features that you are looking for, such as an ability to convert that currency to another digital currency. You can learn about cryptocurrency brokers with other resources, too.

Wrap Up

The cryptocurrency phenomenon might be past the point where long term investing had a potentially mammoth profit rate for you, but that doesn’t mean that the market is dead. In fact, now that Bitcoin has become a more trusted resource, there will be many more opportunities to profit from its movement. But like any form of trading, trading cryptocurrencies is not going to be easy work. If you’re going to trade, you need to make sure that you have the right resources on your side. Do your research, use the right products, and keep yourself safe. This is an exciting product to trade, but that doesn’t mean that it’s equal to easy profits. Be sure to check out our resources to get you started as you learn more about this topic.