Cryptocurrencies represent a new phenomenon among online trading enthusiasts. The reasons for this success lie in the effective possibility of obtaining net results in potentially short times, due to their volatility and the strong movements they show in periods with greater enthusiasm.
Think back to those moments when Bitcoin travelled on the crests of popularity, pushed by the media both on the web and on other information channels. More users and more investors have pushed the price sky-high. The same happened with other major cryptocurrencies. The same, moreover, but in a diametrically opposite sense in terms of quotations, occurs when problems arise.
That said, in this article we will see which are the best platforms for trading cryptocurrencies, offered by a selection of brokers among the most important and operating in Italy.
What does a good cryptocurrency platform offer?
What features should we consider in a platform if we want to negotiate on cryptocurrencies? A demanding trader should evaluate the following:
- Financial instrument for trading (CFD or other)
- Trading conditions (spread, leverage)
- Operation security tools (stop loss, guaranteed stop)
- Variety of cryptocurrencies offered
- Option of operating with small budget
- Security of the trader’s funds
Let’s look at them all in detail.
Financial instrument for trading
Online trading on cryptocurrency is mainly traded through CFDs. CFDs or Contracts for Difference are securities that replicate the performance of an underlying instrument. In the case of a CFD on a cryptocurrency, for example, the CFD replicates the market performance of the cryptocurrency.
When trading with CFDs, the user (trader) can open Long positions (also called Purchases) to profit from the upward changes in the underlying financial instrument. Or, you can open short positions (also known as sales) to profit from downward changes in the underlying financial instrument.
We recommend you work with CFDs, because as well as being tools that allow you to open positions in a reduced way compared to a traditional investment, they also offer a series of very interesting operational security tools and general practicality. In fact, they allow you to open a position or close it when you want, on an open market.
The most important trading conditions to consider when choosing a cryptocurrency trading platform are the spread and the financial leverage being offered.
The spread represents a percentage share that is applied to the transaction when the position is opened. It is the only compensation that the broker retains for their services. The spread therefore represents a cost, the amount of which depends on the selected instrument and the broker. Brokers apply different spreads to the various instruments, trying to offer advantageous conditions on certain instruments compared to their competitors.
Leverage, on the other hand, is a ratio that indicates the extent of the margin required of the trader with respect to the overall value of the securities on which he trades. For example, with a leverage of 1:100 and a total value of securities of 10,000 euro, the trader will only be exposed for 100 euro. With cryptocurrencies, lower financial levers are usually offered, in the order of 1:10 or 1:5.
Operation security tools
On their platforms brokers offer different tools for the security of trading operations. The most important, as well as the most effective, to operate with greater security, especially in cryptocurrency trading, are the stop loss and the guaranteed stop.
The stop loss is an order that is given to the broker through the platform, allowing you to automatically close a position that reaches a certain percentage of loss. Once a set loss level is reached, the position closes and no more losses are incurred.
The guaranteed stop is a very valuable order in some cases, which however is not offered for all financial instruments (and therefore not even for all cryptocurrencies), and which among other things is not offered by all brokers. This is an order that allows you to automatically close a position in cases of strong and sudden price changes. This order is therefore excellent for cryptocurrencies, which can sometimes undergo variations of this type. The guaranteed stop is not free and requires an extra spread. It is therefore a small “insurance” policy.
Variety of cryptocurrencies
There are many different cryptocurrencies, much more than you may think. However, only a few are important, both in terms of their composition and in terms of capitalization.
The variety on offer can be a good thing when cryptocurrencies are available that actually have the potential, in terms already described. The wide range of cryptocurrencies is therefore not enough by itself. There must be real potential for obtaining results, operating upwards and downwards.
Among the most important cryptocurrencies currently being offered are:
Bitcoin: the most important and most valuable cryptocurrency in the world. For more information on Bitcoin trading methods, visit our Bitcoin information page
Bitcoin cash: the cash version of Bitcoin, launched in August 2017. For more information, visit our Bitcoin Cash information page.
Ethereum: a cryptocurrency used above all for smart contracts. For more information on Bitcoin trading methods, visit our Ethereum information page
Ripple: a cryptocurrency designed for banks. For more information on Bitcoin trading methods, visit our Ripple information page
Litecoin: it started from Bitcoin and tries to improve upon it, while recognizing its primacy. For more information on Bitcoin trading methods, visit our Litecoin information page
Dash: features similar in every way to Bitcoin, with some improvements on the timing aspect, but which inevitably acts in the shadow of the largest cryptocurrency. Too similar to have an easy life. More and more users like already “proven” cryptocurrencies. For more information on Bitcoin trading methods, visit our Dash information page
NEM: a cryptocurrency whose platform offers more functionality. For more information on Bitcoin trading methods, visit our NEM information page
Option of operating with small budget
One of the best advantages of online trading, as well as one of the reasons why it was born, is the possibility of operating with micro-budgets. By micro budget we mean budgets starting from tens of euros. In some cases, it is possible to operate with even smaller numbers.
In the same way, with online trading you can also trade with a standard budget or even very high amounts. It is a common activity which is controlled and regulated.
The opportunity to be able to invest even small amounts is mainly due to the presence of financial leverage, a tool that allows the trader to expose himself for very small amounts compared to the actual value of the instruments on which he/she trades. Leverage varies from broker to broker. An example is Plus500, which offers a leverage of 1:10 for cryptocurrencies, allowing you to trade by exposing yourself to a tenth of the risk compared to without leverage.
In addition to leverage, there may be brokers that instead of reducing the impact with the use of leverage, offer the option of operating without leverage, starting with very low budgets. An example are IQ Option’s CFDs.
Security of the trader’s funds
Last but not least, to evaluate the best cryptocurrency trading platforms, the security of your funds must also be considered.
Security is important not only for the moment in which a deposit is made (the moment considered psychologically the most critical), but also for the time in which one’s capital “stays out” and finally for its withdrawal.
One aspect that is not generally taken into account is where the money is placed once the deposit is made, or where it is held.
Have you ever asked yourself that?
Make a deposit on a broker’s website. What happens? Do they keep it? Is there a broker account where they go to get their money? Not really. Or at least it isn’t the case with regulated and authorized brokers.
Security is guaranteed especially in cases where the deposited funds are held in separate funds, at an external banking institution. This ensures that the broker does not have “access” to his deposit and that this money is only used at the time the order is placed. Only the proceeds from the spread and other ancillary costs will depend on the broker, depending on the type of services requested.
Information about the security of the broker is (and must be) present on the official website of said broker, where the license numbers obtained by the competent regulatory bodies are also reported. For more information about a broker, other than those that are well exposed, contact their customer service. We strongly advise you to work with international or well-known brokers, as well as those shown on our website and on the table at the top of this page, or on our homepage.