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?
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).
That’s a lot of regulation. With all of these eyes scrutinizing the exchange, you can bet you won’t be charged outlandish fees for your trade. That surety brings a lot of liquidity to the eToro market. Liquidity means you can bet on getting your order filled when you want it filled, a problem many other exchanges still grapple with.
In short, contracts simplify the crypto process into something anyone can understand and participate in.
The Investment of the Century?
The truth is that crypto has never been more popular, even during its 2017 mania when everybody heard about it for the first time. More people hold bitcoin and ethereum wallets now than ever before. More traditional financial experts and institutional investors are investing into the crypto space than ever. (For example, the Chicago Board Options Exchange (CBOE) now offers options on bitcoin. CEO of JPMorgan Chase Jamie Dimon, a notorious crypto hater, is now leading the charge to corner the market. *Please don’t let him cough cough.*) Most importantly, intellectual capital is moving away from traditional finance into crypto. If no more brainpower goes into saving the falling U.S. dollar, baby, it won’t get saved.
Look it up — bitcoin was the #1 investment for the past decade. If you miss this wave of crypto, you may be missing out on some of the best investment opportunities in this decade. CFDs are an easy way to get in on the action without needing to know all of the technical stuff. eToro is arguably the easiest way to get into CFDs. If you haven’t done your due diligence, now might be a time to give it a shot!