Simple steps to Trading and Investing in Cryptocurrency

The interest for crypto assets like Bitcoin, Ethereum, and XRP has been growing exponentially. It’s easy to understand the reasons. The biggest advancement in financial technology, cryptocurrency could completely transform the world of financial services.

Are you interested in finding out more about crypto assets and how you can trade with them? This guide on crypto is an excellent way to begin. This guide will take through the basics of crypto assets, and show you the ways to trade cryptocurrency with eToro.

What is a crypto asset?

Broadly speaking, cryptoassets are cryptographically-secured digital assets that can be transferred, stored, and traded electronically. Algo affiliates are the leaders in the same. 

One of the most distinctive features that all digital assets have is the fact that they are supported on the technology of distributed ledgers (DLT). Distributed ledgers are an electronic database of transactions that are implemented over computers on a network. It does not have a central administrator or centralised storage of data. Since all the data stored in the database is shared over the internet this is known as “decentralised. When you have a distributed ledger, each operation that occurs within the network is recorded in multiple locations simultaneously. This implies an increased level of security than a centralised ledger, in which all information is stored in a single location.

Blockchain is by far the most well-known form of DLT. This is the technology numerous popular cryptoassets are built on. Blockchain combines transactions into blocks which are linked using cryptography to protect and verify transactions. The information about transactions is public and is available to all to view. This makes it almost impossible for anybody to fake an authentic transaction. This is done by making use of CFDs and use of Ethereum code

Cryptoassets are generally classified into three categories:

  • Bitcoin: sometimes called ‘payment tokens or exchange tokens Cryptocurrencies are digital currencies intended to be used as a means for exchange. In some ways, they are like traditional currencies, but their distinctive feature is that they’re not issued by a central authority. That means that they are, theoretically speaking, free from manipulative government intervention and government control. The most popular cryptocurrencies are Bitcoin, Bitcoin Cash, and Litecoin.
  • utility tokensthese represent tokens that permit the owner to utilize an item, function, or service offered by the issuer of the token. If you invest in the utility token you get an amount of tangible reward in return. The most widely-known utility tokens include Ethereum as well as XRP.
  • Security tokens These are virtual assets which are legal ownership rights to real-world assets like shares, commodities and real estate. Security tokens are intended to be an investment opportunity, and possess traits that are reminiscent of conventional financial instruments.

Trading cryptoassets

Cryptoasset price tends to be extremely fluctuating. It’s not uncommon to see the price of one particular cryptocurrency go up by 20% or lower in just one day. This implies this asset type could provide a variety of opportunities for investors and traders.

To trade in cryptoassets, you must have an account on an exchange platform which provides access to crypto markets. On eToro trading in cryptoassets is simple.

The platform of eToro is simple to utilize and offers traders the option of purchasing cryptoassets in bulk or trading price fluctuations using Contracts for Difference (CFDs).

Why should you trade cryptoassets?

There are numerous advantages to trading in cryptoassets.

The main benefits are:

  • Higher volatility Cryptoassets like Bitcoin, Ethereum, and XRP tend to be higher in volatility than conventional assets like bonds, stocks, and real property. Take a look at Bitcoin. Its price is usually up or down 5% during the course of a day. The high degree of volatility implies that there’s many possibilities for investors. With eToro you can trade both ways which means you can benefit from both upward as well as downward price fluctuations.
    • The leveraged risk When trading cryptocurrency assets using CFDs It is possible to leverage an amount greater than the amount you’ve already put in. This can be to your advantage , possibly increasing your profits. However, on the flip side leverage could also increase your losses, which is why it’s crucial not to overlook the potential risks. eToro currently has leverage of 2x (meaning you can exchange $2,000 while depositing $1,000) for all cryptoassets.
    • Low-minimum investment You can begin trading in cryptoassets using just the smallest amount. At eToro you can make the trade using crypto with as little as $200.
    • Trading around the clock:a major appeal of cryptoasset trading is the fact that it is accessible all hours of the day. This means that you are able to trade at any timeand on your own time.
    • Transaction fees are low:cryptoasset trading transaction fees are typically minimal. The only charges you have to pay on the eToro platform are spreads (the amount that is the difference in between purchase price and the selling value of the cryptocurrency) as well as small overnight fees in CFD accounts*.
  • * CFD positions that are open over the night incur a tiny cost, based on the amount of money invested in the position. It is basically an interest charge to cover the costs of leverage you employ overnight.
    Major crypto assets
    There are thousands of different cryptoassets accessible to investors and traders.
    Let’s take a look at some of the most popular cryptoassets.
    Bitcoin (BTC) is probably the most popular cryptoasset. The cryptocurrency was launched on the 9th of September 2009, through Satoshi Nakamoto (a pseudonym), Bitcoin is a digital currency that is decentralised and founded in blockchain technology. Bitcoin is able to be exchanged from one user to another via the worldwide peer-to-peer Bitcoin system without necessity for intermediaries such as banks.
    Bitcoin was developed to serve as an alternative to traditional fiat currencies like that of US Dollar and the Euro. It isn’t controlled by any central authority or government, which means it is not able to be manipulative in the same manner that traditional currencies could be. Every one of Bitcoin transactions are registered by the blockchain ledger, and are authenticated, making Bitcoin highly secure and traceable.
    Bitcoin is the very first cryptocurrency to be created and is the largest cryptocurrency in the world by market capitalisation at present.
    The technology was introduced in the year 2015 and has been around since then. Ethereum (ETH) is a blockchain technology that can be programmed that allows decentralised blockchain-related apps to be developed and operated without interruption or interruption by a third party.
    Ethereum could become a disruptive technology since it permits intelligent contracts to be written into blockchain’s code. For instance, it could be used to keep track of financial transactions, legal contracts and real estate deeds. This implies that it can have applications in a range of industries , including law, financial services as well as real estate.
    When people discuss trading Ethereum what they’re really talking about is trading the Ethereum an ethereal token that can be traded that is designed to help fuel an Ethereum ecosystem.
    Bitcoin Cash
    Bitcoin Cash (BCH) is a cryptocurrency that was invented due to the ‘hard fork’ that took place with Bitcoin in December of 2017. A hard fork occurs the process of splitting a single cryptoasset into two separate cryptoassets. It happens when people in the community have a disagreement , typically about changes to the software used by the network. In this instance, there was a disagreement related the increase of block size.
    As with Bitcoin, Bitcoin Cash can be transmitted from user to users without the need for intermediaries like banks. The benefits that come with Bitcoin Cash, however, are that it is more speedier transaction times as well as less processing costs than Bitcoin.
    Litecoin (LTC) is a cryptocurrency that was created around 2011 Charlie Lee, a former Google employee. It was also established by an unofficial fork of Bitcoin.
    Litecoin is identical to Bitcoin in the sense that it’s a peer-to peer cryptocurrency. However, it does have some significant improvements. For instance, Litecoin can process transactions up to four times more quickly than Bitcoin.
    Litecoin is often referred to as the’silver in Bitcoin’s gold.’
    and XRP is the symbol for Ripple – a company for payments that offers effective solutions for international transfer of money.
    Ripple was designed as a payment system for international use created to assist financial institutions and banks move massive amounts of money across the globe. It lets institutions transfer any currency over the network at a rapid rate, at a minimal cost. Direct-to-bank settlement removes intermediaries banks and exchanges.
    Contrary to the majority of cryptoassets, XRP does not utilize Blockchain to achieve a global network consensus on transactions. Instead an iterative process of consensus (a variety of servers that compare their transaction records on a regular basis) is used which makes it much faster than Bitcoin however it also makes it more susceptible to hacker attacks.
    What are the factors that drive prices for cryptoassets?
    Cryptoasset prices are determined by demand and supply.
    Demand for a certain cryptocurrency will drive its price up, while an excess supply will push the price downwards.
    Demand and supply can be affected by a variety of elements. Here’s a look into some of the most important aspects:
    • Economic changes These are economic events that affect traditional asset classes, such as bonds, stocks, or cash could affect the demand for cryptocurrency assets. For instance, if investors think that fiat currencies, such as that of US Dollar are going to be diminished by governments in the future, they may consider cryptocurrencies as a means of protection.
    • Coverage of media: There are numerous websites that cover the latest developments in cryptoassets and news related to a specific cryptocurrency can affect demand and supply in the cryptocurrency market. Positive news, like the news that a particular cryptoasset has seen a greater level of acceptance, could raise the demand for it. In contrast negative news, for instance, reports that a crypto exchange has been targeted by hackers could decrease the demand.
    • Regulation by the government: governments around the globe are increasingly seeking to regulate cryptoassets , and the developments related to crypto regulation could affect the demand and supply. For instance the time that China announced that it would be blocking all websites that were related to trading in cryptocurrency in the early part of 2018, the demand in Bitcoin and other cryptocurrency fell substantially, pushing their value to a sharp decline.
    • The sentiment of investors: the crypto market is typically extremely emotional, and emotions of investors such as greed and fear could have a profound impact on supply and demand. If prices for crypto are increasing and investors are excessive, driving demand even higher. When prices fall investors are scared, leading to an oversupply. One great example of this is Bitcoin in the final quarter of 2017 and in the early part of 2018. In the period when Bitcoin’s price was increasing rapidly in the last quarter of 2017, the predominant sentiment for investors in crypto was a sense of greed. This resulted in an increase in demand. However, once Bitcoin’s value fell, the main emotion changed from fear to fear. This led to an increase in supply of Bitcoin that pushed prices down.
    • Tips: The News Feed on the eToro Crypto homepage is a fantastic source for crypto-related information. Investors and traders provide information that is beneficial when trading with cryptoassets.
      How do you trade cryptoassets
      There are two primary methods to trade cryptoassets eToro:
      • You can purchase and sell cryptoassets for cash (i.e. purchase the asset that is the base)
      • It is possible to trade cryptoasset price movements using Contracts For Difference (CFDs). CFDs , which are financial instruments allow investors and traders to benefit from the fluctuations in a security’s price but without owning any security.
    • Here’s the way these two strategies perform.
      Purchase the asset that is the basis for the purchase
      In order to purchase the asset, you must trading conventional currency (i.e. USD) to cryptocurrency tokens (coins) like Bitcoin, Litecoin, or XRP.
      If you purchase a cryptoasset in this manner, eToro purchases the tokens on behalf of you and records them in a separate account that is registered under your name.
      If the value of the cryptoasset increases during the time you hold it then you’ll earn. But if the value declines, you’ll earn an income.
      The major benefit of this strategy lies in the fact that you hold the cryptocurrency completely. That means the tokens can be yours to use and keep as you want. You can transfer them into a wallet, swap them for other cryptoassetsor send them to others or pay for products and services using the tokens.
      If, for instance, you purchase $1000 worth of Bitcoin by this method You can then use it to purchase products at retailers who accept BTC.
      If you purchase the underlying asset through eToro and you are able to do so, you will can transfer your cryptoassets onto your eToro Wallet. It is a simple-to-use multi-crypto, safe digital wallet. In addition to providing safe space for the cryptoassets you have the eToro Wallet lets you transfer and receive cryptoassets and from other wallets and convert one cryptoasset into another cryptocurrency.
      What is a cryptocurrency wallet?
      The cryptocurrency wallet is a computer application that lets users transfer and receive digital currency and keep track of their crypto balances. If you intend to make use of Bitcoin or other cryptocurrency to purchase goods or services, then you’ll require an electronic wallet.
      Trading crypto assets through CFDs
      If you invest in a cryptocurrency using CFD, CFD you’re placing your bets on the future price movements for the commodity, and not being the owner of the asset.
      In the example above If you purchase 1,000 worth Bitcoin CFDs, you’ll gain if Bitcoin’s value rises but you will not have the BTC tokens.
      There are two major advantages of trading cryptocurrency through CFDs.
      First of all First, With CFDs you are able to trade across both ways. This means you can gain from both price movements upwards as well as downward price movements.
      In the event that you are convinced that a cryptocurrency will appreciate in value, you could be able to enter the purchase CFD deal (this is known as ‘going longer’). If, however, you believe that a cryptoasset will to decline in value then you’d enter an SELL CFD trade (this is known as “going short.’)
      Furthermore, using CFDs you can leverage to increase your exposure. For instance, using leverage of x2 you can manage $1000 with only $500. This implies the possibility for greater profits (but there’s also the possibility of greater losses).
      The disadvantage to the trading CFDs has the disadvantage that you do not hold any crypto tokens. That means that you cannot transfer them into a wallet or use them to purchase items or services.
      Buy the asset that is the basis for trading CFDs Which is the most efficient option?
      Both strategies for trading crypto provide the possibility of huge returns. Which option is right for you depends on your goals as well as your level of risk.
      A purchase of the asset in question could be the best option If you
      • The plan is to keep the cryptoasset for a long period of time
      • Only wish to make money from price increases
      • You may want to transfer your cryptoasset an account or make use of it to pay for items or services
      • Are willing to pay for the entire value of the transaction upfront
      • Do not want to leverage to increase your risk
    • Trading using CFDs could be the most effective option if:
      • Would you like to trade in both directions
      • Are you looking to leverage your position to increase the risk you take?
      • Do not worry about the ownership of the asset that is the base
      • Don’t want to swap your currency in exchange for cryptoassets
      • Are you not interested in setting up the crypto wallet
      • How do I place the trade of a cryptoasset eToro
        Making a trade in cryptoassets on eToro is easy, regardless of whether you’re looking to purchase the asset that is used as the base or trade its price fluctuations using CFDs.
        Here’s how to trade cryptocurrency on EToro:
        Purchase the asset that is the basis for the purchase
        • Sign in or register an account at
        • Visit the market page, then choose Crypto to get the complete list of cryptoassets.
        • Choose the cryptocurrency you want to purchase, then choose Trade
        • Select BUY
        • Make sure the leverage setting is set to X1.
        • Enter the quantity or the number of units you would like to trade
        • Make sure you set your take-profit threshold If you want to
        • Select Open Trade
    • Trading via a CFD
      • Register or register an account at
      • Visit the market page, then choose the option Crypto to see the complete list of cryptoassets.
      • Choose the cryptocurrency you would like to buy or sell, and then choose Trade
      • Select either BUY or SELL, based on the direction in which you would like to trade in.
      • Enter the quantity or quantity of units you want to trade
      • The stop loss should be set as well as leverage and take profits.
      • Select Open Trade
    • Crypto CopyPortfolios
      If you are looking for an approach that is more relaxed of investing into crypto assets eToro offers a variety of crypto-related CopyPortfolios. They are basically crypto-based investment funds , which are managed by the investment committee at eToro.
      There are currently four CopyPortfolios that are focused on crypto for investors to choose from.
      These include:
      • The CopyPortfolio of the CryptoPortfolio This investment strategy allows investors to be exposed to a diverse collection of cryptocurrency assets. The allocation of the portfolio is based on the market capitalization and also provides exposure to the most popular cryptoassets, like Bitcoin, Ethereum, and Dash.
        • The CopyPortfolio of Cryptocurrency It is a straightforward investment strategy that allows investors with exposure to two biggest cryptoassets in the world the two most popular cryptoassets – Bitcoin as well as Ethereum.
    • This is known as the CyberEqual CopyPortfolio This strategy combines the top large-cap cryptoassets in the same allocation. It is an investment portfolio that is fully managed. portfolio designed for investors who want to gain a balanced view of the market for cryptoassets.
    • It is the The CryptoTakeover CopyPortfolio is an investment strategy consists of short (BUY) positions in cryptoassets like Bitcoin, Ethereum, XRP and more, as well as shorter (SELL) CFD positions on the stock of banks with major positions including Citigroup, Goldman Sachs and Credit Suisse. It is intended for investors who believe cryptoassets will take over traditional banking services over the long time, and increase in value while bank stocks drop.
    • The minimum investment amount for the CopyPortfolios of eToro is $5,000.
      The risks of trading cryptoassets
      Every form of investment or trading is risky, and crypto trading is no exception.
      Two of the most significant dangers to be aware of when trading in crypto are:
      • Risk of volatility It is the risk that comes with price fluctuations of cryptoassets. The prices of cryptoassets can be very unstable and although this may create trading opportunities, it could also be a risk. In the event of a price decline, it could result in substantial financial losses to traders. If you don’t have enough cash in the account in order to compensate for the potential losses, your trades could be closed immediately.
      • Risk of leverage While leverage is powerful instrument that can boost trading gains, it could also harm you by causing more losses in trading. If a substantial volume of leverage utilized for trading, even a minor price shift to the opposite direction could result in significant losses. It is important to know that losses could be greater than the amount you invest.
    • Risk management strategies
      When you trade cryptocurrency, you are able to lower the risk of trading in the process by paying attention to risk control.
      Three strategies to manage risk that reduce risk are:
      • The best size for your position: before you start trading in cryptoassets, it is important to establish your ideal position size for every trade. A common sense rule of thumb is to stay away from risking more than two percent of your money on any one trade. A trading volume of more than 2percent per trade can cause losses that are difficult to recuperate from.
      • Stop losses must be put in place before trading CFDs Stop losses are a crucial element of a solid risk management plan since they can help reduce losses in trading by closing losing positions before huge losses begin to accumulate.
      • The importance of diversifying your portfolioa portfolio that is comprised of diverse assets will be less at risk of risk than one that is purely focused on a single asset like Bitcoin. Through diversifying your portfolio through various asset classes, such as shares, ETFs, crypto, and commodities and commodities, you will lower the overall risk in your portfolio.
    • Summary
      • Cryptoassets are cryptographically-secured digital assets that can be transferred, stored, and traded electronically. The most notable characteristic of cryptoassets is the fact that they are built on the technology of distributed ledger (DLT).
      • Blockchain is among the popular type of DLT. It organizes transactions into ‘blocks that are linked and employs cryptography to secure and verify transactions.
      • Cryptoassets generally fall into three categories that include utility tokens, cryptocurrencies as well as security tokens.
      • There are many benefits to trading in crypto. Not just does the level of volatility that exists in the crypto market offer numerous trading opportunities and opportunities, but you also have the ability to trade 24/7 and leverage your investments to expand the risk.
      • 5 of the popular cryptoassets include Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and XRP. You can trade all these cryptoassets through eToro.
      • Cryptoasset prices are influenced by demand and supply.
      • Supply and demand are affected by a variety of factors, including economic news and news coverage in the media, the context of crypto regulation and the sentiment of investors.
      • On eToro you have the option of purchasing cryptoassets in bulk or trading price movements of crypto through CFDs.
      • You can also be exposed to cryptoassets by using the eToro’s CopyPortfolios.
      • The biggest risks involved in trading cryptocurrency are the risk of volatility and the risk of leverage. It is possible to reduce risk through a focus on risk control.
      • Trading in cryptoassets on eToro is simple.
      • The platform of eToro is simple to use and provides access to a variety of cryptoassets.
    • GlossaryBLOCKCHAINThis is the tech most popular cryptoassets are founded on. Blockchain organizes transactions into ‘blocks which are then chained and utilizes cryptography to safeguard and verify every transaction.
    • CFD – contract for difference. An instrument of finance that allows you to benefit from the fluctuation of prices in the security, but without owning any security
    • COPIPORTFOLIOS – investment funds created by the investment committee at eToro.
    • CRYPTOASSET isa digital asset supported by the distributed ledger system (DLT)
    • CRYPTOCURRENCYa digital currency that is designed to function as a means of exchange.
    • DECENTRALIZED is a method of ensuring that several computers and users are able to access the information
    • DLT DISTRIBUTED LEDGER (DLT) isa database that runs on a computer network and does not have a central administrator.
    • DIVERSIFICATION Spreading your money out across multiple assets to lower risk
    • Going Long –buying an investment
    • going short –selling an investment
    • Hard Fork is when a cryptocurrency divides in two cryptocurrencyassets
    • Initial Coin Offering (ICO) – when the blockchain company provides cryptocoins to be ownership in the company , instead of stock in an open sale
    • INVESTOR EXPERIMENT The overall mood among investors
    • LEVERAGE borrowing capital from a broker prior to opening an account to boost the chance of a return on an investment
    • Risk –the sum of money that is exposed to risk in any one trade
    • Risk Management – focus on the possibility of risk in trading to minimize loss
    • Security tokens Digital assets that symbolize the legal rights of ownership in real world assets , such as commodities, stocks or real estate
    • SPREAD SPREAD the amount that differs between purchase price and sell price. It is also the cost of executing the trade
    • Stop LOSS An order that is that is designed to minimize losses
    • Take Profit A request to end a trade at a specific profit level
    • UTILITY TOKEN A token that gives the owner the right to use an item, function, or service offered by the issuer of the token
    • VOLATILITY fluctuation in price changes
    • WALLET A secure online space where your crypto is kept. It is not an exchange platform.

This information is intended for solely educational purposes and should not be construed as any investment advice, personal recommendations or an offer to or invitation to purchase and sell financial instrument. This information has been written without consideration of any specific investment objective or financial situation , and is not prepared in compliance with the regulatory and legal requirements to encourage independent research. Any references to the past performances of an investment instrument index, or packaged investment product are not or should never be considered as a reliable indication of the future performance. eToro does not make any representations and does not assume any responsibility for the exactness or completeness of the information in this document. Make sure you are aware of the risks associated with trading prior to making any investment. Do not risk more than you’re willing to lose.