Buying, selling and trading crypto is easier than it has ever been, but that doesn’t mean it’s easy. The concepts of digital wallets and peer to peer (p2p) transactions may still seem foreign or sketchy to you, and with good reason. Traditional financial media tends to focus on the negative when reporting on the crypto space. As a result, headlines about billion-dollar hacks traumatize casual investors.
Surprisingly, the crypto space has not suffered. If you are serious about making money through the financial markets, that should raise your antennae. Even though traditional media has little good to say about it, the crypto space still grows. Why?
Millennial Money
We’re in the middle of the biggest transfer of wealth in history — the movement of money from Baby Boomers to Millennials. We’re talking $60 trillion dollars. That money is going into vastly different places than it was 50 years ago. It’s AMD today, not Intel. Lemonade, not Prudential. Amazon, not JCPenney; Tesla, not Ford; Benzinga, not CNBC; Netflix, not AMC. You get the point.
Looking back on 2020 100 years from now, it will be easy to discern that a new financial system should have accompanied this revolution into digital companies. Digital companies, digital currency. If the world’s going to do business in a completely new and more efficient way, then it should transact in a completely new and more efficient way. Seems logical, doesn’t it?
Thus, the crypto space grows regardless of what Cramer or anyone else has to say about it.
The question is, how do you get in without completely readjusting your life to learn this new financial system?
The Strength of Synthetic Exposure
eToro is an exchange specializing in a contract for differences (CFDs), a synthetic financial vehicle. When you buy a bitcoin CFD, you don’t actually own bitcoin. What you own is a contract that pegs itself to the price of bitcoin exactly. You get the same profit or loss from the contract as you would from owning the coin itself. Actually, you might come out ahead on the contracts. Let me explain.
If you don’t know what you’re doing in the crypto space, you can end up paying some enormous transaction fees to buy and sell coins and tokens. Even if you make a good trade, those fees can quickly eat into profits. The crypto market is widely unregulated, so buyers and sellers are basically free to set their own terms. This can be advantageous if you’ve got experience. If you don’t, it’s kind of like aftermarket and premarket trading — your best bet is to just stay away.
With CFDs, eToro sets a steadier marketplace. You know upfront the fee you pay to get in and get out — it’s listed in the bid/ask spread. This spread is public, so everybody gets the same deal.
CFDs are also regulated through reputable financial authorities. The UK arm of eToro is regulated through the Financial Conduct Authority (FCA). eToro Europe is regulated through the Cypress Securities and Exchange Commission (CySEC). It holds an Australian Financial Services License to put Australian traders at ease. It also stays in compliance with the European Union’s Markets in Financial Instruments Directive (MiFID).