Is Cryptocurrency Here to Stay This Time?
As bitcoin passes $10,000 for the first time in months, the conversation around crypto is heating up again. The biggest crypto haters are now getting in on the action, most famously JPMorgan CEO Jamie Dimon. Ether, the Pepsi to bitcoin’s Coca-Cola, came into its own as a separate, distinct and viable long term investment. Many investors are beginning to view cryptocurrency as more than a short term speculation play or a portfolio hedge. There is evidence that the major cryptocurrencies are being used as a play against the falling U.S. dollar. News of Bitcoin’s new highs came at around the same time as headlines of dollar debasement
During the first mania in December 2017, bitcoin peaked at almost $20,000. Total market capitalization tripled from approximately $250 billion to $750 billion and barged into the mainstream public consciousness. Unfortunately for some traders, the market sold off just as quickly as it had pumped itself up.
The total market cap for the crypto market
Why Crypto is Here to Stay This Time
Professional analysts don’t believe that crypto will give back its gains so quickly this time. I tend to agree. The major difference between 2017 and 2020 is crypto’s ease of access. When I first bought crypto circa 2015, it was a real David Hasselhoff. The exchange I used, Coinbase, was clunky, slow and illiquid. I was so frustrated with my experience there that I immediately moved my crypto into a private wallet and didn’t buy again for a time.
Moving my coins into an off exchange wallet was an experience as well. I remember downloading the entire blockchain to my computer because there were few trustworthy light wallets, and even less information actually explaining what that meant. I bought a separate computer just for my bitcoin. I tried my best to learn hashes and forks. I remember thinking I was a financial genius for being able to capture and claim my Bitcoin Cash. It was a challenge for me!
Today, Coinbase is a much better experience than I remember, and so are many other exchanges. I now have three wallets that are not only easy to use, but are actually fun to use. Fees have been reduced. Trading coins against each other is more like a video game. It is easy to switch coins. You can move in real time, fast enough to catch short term moves. I can basically trade my crypto just like I trade my securities.
What’s more, the “establishment” has bought in. The Chicago Mercantile Exchange (CME) now offers futures contracts on bitcoin. Banks fought for and received the right to hold crypto quite recently. Pop singer Akon is building an entire city in Senegal based around his own coin, the Akoin. Megacompanies like Facebook and countries like Russia are now trying to create crypto rather than kill it. Regardless of which coins pass the test of time, digital currency has legs. It is here to stay. All the market has to do is attract people in.
When it comes to easy access in the crypto market, few platforms give you an easier time than eToro. eToro deals in contracts for differences (CFDs) that serve as proxies for top cryptocurrencies. What’s the difference? When you buy or sell a CFD, you actually never own the crypto. But since the price of the contract is tagged to the price of the coin, you do benefit from good trades and suffer losses for bad ones.
CFDs Versus Crypto
So what are the benefits of trading CFDs rather than “real” crypto?
First, you are trading on a highly liquid platform with easy entries and exits. Many crypto exchanges suffer from illiquidity and volatile price shifts. You also gain the safety of trading within the auspices of a regulated broker. eToro is regulated through many well known financial authorities including the Cyprus Securities and Exchange Commission (CySEC), the UK’s Financial Conduct Authority and holds as Australian Financial Services License.
Second, you don’t have to worry about actually buying crypto, which can still be a hassle. Governments are doing their best to regulate crypto, and they are clamping down on the exchanges — the onboard ramps. As a result, you have to go through a bureaucracy of sorts to legitimately enter the market. You lose your anonymity, which was the first major advantage of using crypto in the first place.
Third, you can easily trade crypto using leverage. Your limit on eToro is 2X when you trade cryptocurrencies.
Getting in on the Game
As it was in 2017, bitcoin is the number one performing asset class in 2020. This time, society may actually be ready to embrace it. If you are looking for a quick way to get in the market without learning all of the nuances of crypto, eToro CFDs can help.
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