Tuesday Jun 27 2023 10:22
3 min
Cryptocurrencies have grown to be one of the most exciting and intriguing trading markets out there. These digital currencies have grown from niche interest to mainstream attention, and are quickly becoming the investment choice of a generation. But, with all investing comes risk. When it comes to cryptocurrencies, what risks should traders be aware of?
To understand trading risk with cryptocurrency, it is first important to understand why traders trade them. For many, trading cryptocurrencies can offer attractive returns due to the inherently volatile nature of these assets.
Furthermore, cryptocurrencies have a finite supply and increased demand, creating conditions ripe for price growth and giving traders the opportunity to capitalize on these gains. As well, cryptocurrency trading can be an attractive asset class to diversify a trading portfolio, since digital currencies are still largely uncorrelated with other asset classes.
But, as with all forms of trading, risk is always a factor. Since cryptocurrency is a largely speculative asset, there is the possibility of experiencing large price fluctuations and losses as a result. This risk increases when leveraging cryptocurrency with margin and can even put investors at risk of losses far beyond their initial capital invested.
Join the 100.000s that have made markets.com their home for trading. Learn about trading as you grow your portfolio.
More power in our platforms
We currently cannot accept clients from your country. If you have received this message in error, please contact our support team at support@markets.com
Contact Support
Furthermore, cryptocurrency trading is subject to certain risks from market structure and underlying asset prices that could result in market manipulation, fraudulent trading, and theft of coins.
To protect against such risks, traders often turn to cryptocurrency CFDs. CFDs are contracts for difference that provide a way for traders to gain exposure to an asset without taking physical ownership of it.
When trading cryptocurrencies via CFD, traders gain the ability to trade without the security risk of direct ownership. Additionally, the use of CFD products allows traders to leverage their trading positions, opening the doors for enhanced risk management techniques like stop loss orders, limiting losses when an unexpected downturn occurs.
Overall, cryptocurrencies present an exciting opportunity for traders to capitalize on a volatile market, however they must also remain aware of the inherent risks associated with trading this asset class. Through the use of cryptocurrency CFDs, traders can protect against losses while still reaping the benefits of digital currency investing.
* Note, trading Cryptocurrency CFDs and spread bets is restricted in the UK for all retail clients.
* This information is provided for informative purposes only and should not be construed to be investment advice.
Asset List
View Full ListLatest
View all
Monday, 17 February 2025
5 min
Tuesday, 21 January 2025
3 min
Sunday, 29 December 2024
6 min
[]
[]
0 of 0array:14 [▼ "cookie" => array:1 [▶ 0 => "mktv4_ip_override=eu; mktloc=eyJpdiI6IlRvWmRmdTFmd2ZvNDZ4R29vRkM2Wnc9PSIsInZhbHVlIjoiQ2c3WkJpMldDdU50OGRkbnRPY0hDckF6VWUvOVFTd0lXSnNaQVgycHpvSlBOUnFJVy9KUWRNM3NnVHhmTzdJZyIsIm1hYyI6IjI1Zjc0NjY0NDk5MGQ5OTQ4YzQ3NmJhYzQxNWM3MTRmMDg3MDQ1NzhlYjVjZGYyM2UyMDQwYWY0OGY1MTMwYzkiLCJ0YWciOiIifQ%3D%3D; intent_group=%252Feducation-centre%252Fwhat-is-crypto-currency-and-how-does-it-work%252F; firstURL=https://web-qa.staging.markets.com/education-centre/recession-proof-stocks-cfds-and-other-assets/; lastURL=https://web-qa.staging.markets.com/education-centre/recession-proof-stocks-cfds-and-other-assets/; XSRF-TOKEN=eyJpdiI6IlFVcGhFdFY1VjhuNEJrdEMzc01pL3c9PSIsInZhbHVlIjoiRHBEeW82ODFUQ0xzUjFWTnNhWkZycTg3dzB3c0dBR21ldjBrWmlCZksvL3F0M0RETjRvaGY2RDc2a1ozWStCSS92eldKeDNNRFFLNTUydHlHYUIzR1dwbFovMkN4U3M5MndJQ1FIQ3NmL1NUb0V3U0l3eEJvWkhJRno3YTVDdngiLCJtYWMiOiI2YTQzMjJjYzUxZTQzYTYyYWNlMWVjMjgyYjcwNjEwZThlNWFjNmNjZDAwOGY5MjhlYTkxYjNiMGE1MTQyYmU3IiwidGFnIjoiIn0%3D; laravel_session=eyJpdiI6IlRoa3JCTVY3Q3dpR09VTytScmdOK2c9PSIsInZhbHVlIjoiaGtBMDBTV085U0hOU3B2d3doYi9SazlFN0VId3AxeEI2ZU10bldBeU42Yk1xNHp4cytqUTk0UnlWZEh5d2FBVU5XYXh0MDVXNlJISng3U2tQVCs1M3RZbkZTdC9PTzFIUWtvZ0YvRk9QZ1JFcGZkaVFNWUJlbis2S2crZjV3UC8iLCJtYWMiOiJkM2U3NzA2NzQ1M2VjMjkxMTAzZWQ5Mjk3NjZiYTRmMmNlNTI2Njk2NDVjYjg3YTAxYzljOGZjMjdhMzg3Yzg2IiwidGFnIjoiIn0%3D ◀mktv4_ip_override=eu; mktloc=eyJpdiI6IlRvWmRmdTFmd2ZvNDZ4R29vRkM2Wnc9PSIsInZhbHVlIjoiQ2c3WkJpMldDdU50OGRkbnRPY0hDckF6VWUvOVFTd0lXSnNaQVgycHpvSlBOUnFJVy9KUWRNM3N ▶" ] "accept-encoding" => array:1 [▶ 0 => "gzip, deflate, br, zstd" ] "sec-fetch-dest" => array:1 [▶ 0 => "empty" ] "sec-fetch-mode" => array:1 [▶ 0 => "cors" ] "sec-fetch-site" => array:1 [▶ 0 => "same-origin" ] "accept" => array:1 [▶ 0 => "*/*" ] "sec-ch-ua-mobile" => array:1 [▶ 0 => "?0" ] "sec-ch-ua" => array:1 [▶ 0 => ""HeadlessChrome";v="129", "Not=A?Brand";v="8", "Chromium";v="129"" ] "user-agent" => array:1 [▶ 0 => "Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)" ] "sec-ch-ua-platform" => array:1 [▶ 0 => ""Windows"" ] "cache-control" => array:1 [▶ 0 => "no-cache" ] "pragma" => array:1 [▶ 0 => "no-cache" ] "connection" => array:1 [▶ 0 => "keep-alive" ] "host" => array:1 [▶ 0 => "web-qa.staging.markets.com" ] ]
0 of 0array:7 [▼ "mktv4_ip_override" => null "mktloc" => "us,us" "intent_group" => null "firstURL" => null "lastURL" => null "XSRF-TOKEN" => "l7nyhGUq9fyoD203eoJRd3hmfBuB7cEfd28Vj2Yu" "laravel_session" => "k7S51YPGnRr1EbyKymsr7MuAPzl9hc5EK1iA6ICq" ]
0 of 0array:3 [▼ "cache-control" => array:1 [▶ 0 => "no-cache, private" ] "date" => array:1 [▶ 0 => "Fri, 11 Apr 2025 13:01:12 GMT" ] "content-type" => array:1 [▶ 0 => "application/json" ] ]
0 of 0array:4 [▼ "_token" => "l7nyhGUq9fyoD203eoJRd3hmfBuB7cEfd28Vj2Yu" "PHPDEBUGBAR_STACK_DATA" => [] "_previous" => array:1 [▶ "url" => "https://web-qa.staging.markets.com/csrf" ] "_flash" => array:2 [▶ "old" => [] "new" => [] ] ]
| 1 x Booting (78.97%) | 17.46ms |
| 1 x Application (21%) | 4.64ms |
| 1 x Routing (2.18%) | 481μs |
EN
