Why is cryptocurrency trading still difficult at many online brokers ? A few considerations you need to make before starting the trade.
The reason I was able to take this trade was because my broker had added a number of crypto’s to the CFD offer. I don’t have to think about parking my money at one of the crypto trading exchanges. You could still risk a few tens, but if you want to trade with serious money you run quite a bit of risk.
- Nobody supervises
- No regulation at all
- No guarantee fund
- Big chance of hacks
- Stories about manipulation
- Limited order possibilities
So a lot can go wrong and you don’t have a leg to stand on when something happens. There are plenty of stories about traders who can’t access their account and exchanges that even manipulate the price to liquidate traders. Also last year when i was heavily invested in ASML aandeel at vergelijk-gratis, i took a pretty bad hit when one of the brokers decided to shut down their service.
Other advantages of regulated brokers over crypto exchanges are:
- Segregated funds (customers’ money is held in separate accounts)
- Guarantee fund (insurance for customers should something go wrong at the broker)
- Regulated crypto trading brokers with their own wallet
- If you would rather trade real coins or want to invest for the longer term, there are also brokers that are regulated at European level and therefore offer much more security. In addition, I would never leave coins on an exchange for the long term, but on my own (hardware) wallet.
eToro is still one of the best brokers available in The Netherlands. They are really a forerunner in terms of technology and now also have their own wallet. So you can safely trade crypto there and buy it for the long term.
Enormous volatility in crypto trading
When it comes to volatility, crypto trading currently tops the list. Price movements of 50% or 100% per day no one is surprised anymore, especially when it comes to the so-called shitcoins that have a very low Satoshi value. The knife cuts both ways in case of volatility. You can only make money trading and investing if the price moves. And the more the price moves, the more there is to be earned. If you have the right experience and know how risk management works, you can adjust the position size accordingly. But most crypto traders are beginners and have no idea about this, which considerably increases the chance of going stretched compared to other markets that move less violently.
Barely scheduled news in crypto trading
There is no shortage of news items when it comes to crypto. With the rise in popularity of crypto trading, thousands of (so-called) experts, news sites and Twitter accounts have been added, all sending their own messages into the world. Anyone can write anything and almost everyone is for sale. That may be true in traditional media, but in crypto it seems to be a bit worse. There is always a shiller out there who wants to plug your shitcoin for the right price.