Understanding Cryptocurrencies
What Are Cryptocurrencies?
Cryptocurrencies are digital currencies generated through cryptographic algorithms, operating independently of traditional banking and government systems. These decentralized assets leverage blockchain technology to enable secure peer-to-peer transactions.
Key Cryptocurrencies Explained
Bitcoin (BTC)
As the first decentralized digital currency, Bitcoin revolutionized finance by introducing blockchain technology. It serves as:
- A store of value ("digital gold")
- A medium of exchange
- A hedge against traditional financial systems
Ethereum (ETH) and Ether
Ethereum's open-source platform enables:
- Smart contract functionality
- Decentralized application (DApp) development
- Enterprise blockchain solutions
Ether (ETH) fuels the network by:
- Paying transaction fees ("gas")
- Compensating network participants
- Facilitating smart contract execution
Tradable Cryptocurrency Products
Available Cryptocurrency CFDs
CMC Markets offers trading on these major cryptocurrencies against USD:
| Cryptocurrency | Symbol | Key Features |
|---|---|---|
| Bitcoin | BTC/USD | Pioneer cryptocurrency, limited supply |
| Ethereum | ETH/USD | Smart contract platform |
| Litecoin | LTC/USD | Faster transactions than Bitcoin |
| Dash | DASH/USD | Privacy-focused digital cash |
👉 Explore available cryptocurrency pairs
Platform Navigation
Finding Cryptocurrency Products
- Web Platform: Navigate to "Cryptocurrencies" in the product library
- Mobile App (iOS): Tap "More" → "Cryptocurrencies"
Account Setup Process
- Complete the online application form
- Verify your email address
- Deposit funds
- Begin trading (existing users can access via "Cryptocurrencies" tab)
Trading Essentials
Transaction Details
- Minimum Deposit: None required (funding needed to trade)
- Security: SSL encryption for all account activities
- Trading Hours: Mon 7AM - Sat 6AM (server time)
Position Management
To close or reduce positions:
- Select the red "Close" (X) button
Choose between:
- Full closure (select "X" on aggregate row)
- Partial reduction (adjust trade size)
Financial Considerations
Currency Conversion
- Accounts denominated in local currency
- Positions opened in USD
- Conversion rate: Mid-market rate ±0.3%
Practice Trading
Demo accounts allow risk-free cryptocurrency trading:
- Test strategies
- Familiarize with platform features
- Understand market dynamics
Technical Aspects
Wallet Requirements
CFD trading doesn't require digital wallets since you're speculating on price movements rather than owning the underlying asset.
Blockchain Forks
Occur when:
- Network participants disagree on protocol changes
- The blockchain splits into separate paths
- May create new cryptocurrencies (e.g., Bitcoin Cash from Bitcoin)
👉 Understand blockchain technology in depth
Alternative Cryptocurrencies
Bitcoin Cash (BCH)
Key differentiators from Bitcoin:
- 8MB block size (vs. Bitcoin's 2MB)
- Faster transaction processing
- Created through 2017 hard fork
Litecoin (LTC)
Notable characteristics:
- Four times faster block generation than Bitcoin
- Higher coin supply (84 million vs. Bitcoin's 21 million)
- Often called "silver to Bitcoin's gold"
Frequently Asked Questions
Do I need a cryptocurrency wallet to trade CFDs?
No. CFD trading involves speculating on price movements rather than holding actual digital assets, eliminating wallet requirements.
What happens during a blockchain fork?
Our platform typically follows the blockchain recognized by the majority of users, though we reserve the right to determine the most legitimate version during contentious forks.
Can I trade cryptocurrencies outside market hours?
Cryptocurrency markets operate continuously from Monday morning through Saturday morning, with no trading on Sundays.
How are profits/losses calculated for foreign currency positions?
All positions are converted to your account's base currency using the prevailing exchange rate plus a 0.3% conversion fee.
What's the advantage of trading crypto CFDs vs. direct purchases?
CFD trading offers:
- Ability to profit from both rising and falling markets
- No need for wallet security
- Access to leverage (subject to risk)