BASIC CRYPTO PLATFORMS
Cryptocurrency is a new digital concept, but its market is broad and has kept growing steadily over the years. Different platforms relate to Cryptocurrency. There is the exchange platform, trading platform, and investment platform.
A crypto exchange platform is where you can swap or exchange your coin or token for another digital currency. A crypto trading platform is where you trade your token or coin in exchange for cash. Frequently, people use trading and exchange platforms together.
A crypto investment platform is simply a crypto derivative platform where investors can optimize their interest by exploiting several crypto derivative market platforms. There are a few major exchanges, trading, and investment platforms for Cryptocurrency. The most recommended, safe, and commonly used are Coinbase, BlockFi, Binance, amongst others.
Coinbase: It is the most popular and commonly used crypto trading and investment platform. Coinbase is notable for its simple user interface and common among new crypto users. BINANCE: Binance may not be notable for its user interfaces like Coinbase, but it has one of the robust trading platforms on Cryptocurrency.
BlockDefi: BlockDeFi is another popular trading platform known for its lack of commission. People who are interested in gaining interest from holding tokens usually make use of it.
A SUMMARY PEEK INTO CRYPTOCURRENCY BASICS.
What is crypto?
Frequently, new users are confused about what Cryptocurrency is. Here's a comprehensive summary of what crypto is about; Crypto is a digital currency that you can use as a form of payment for specific online transactions.
Some companies, especially gaming companies, have made arrangements for their currencies which are known as tokens. People use such tokens to make digital payments where they use such companies' products.
The reason why Cryptocurrency is accessible by people around the world is the blockchain platform. A blockchain platform is the powerhouse of Cryptocurrency. It is a new decentralized technology that works on several computers and records transactions.
As stated earlier, blockchain technology is the main reason why Cryptocurrency works and remains accessible. It makes use of an innovative new Technology known as BlockChain. A blockchain functions as a recorder of information, especially transactions. It is a chain of blocks that contains data. Since the digital world is dominated by transactions every second, blockchain technology records such transactions; there are various types of blockchain platforms in Cryptocurrency, but the popular ones are Ethereum, Solana, and Binance Smart Chain.
CRYPTO DERIVATIVES MARKET
Crypto Derivative markets are one of the recent milestones of blockchain technology. It implies that it has created a chance for an investor's interest to become broader. Previously, crypto investors could only access spot trading, which is the direct buying and selling of a digital asset at a mutually agreed price. In recent times, more crypto-based derivatives have risen to the forefront Crypto derivatives arise where two parties enter into a contractual agreement and speculate about the future price of a specific Cryptocurrency token at a specified future date. Crypto derivatives market is where stakes are made regarding an underlying asset of value such as a crypto token or coin by investors. Traders or investors usually speculate about the future price after a contractual agreement. This results in the win or loss of one of the parties.
CRYPTO TRADING PLATFORM
What's a Crypto trading platform? Do you have crypto tokens or coins, and do you want to trade them? Or are you a crypto enthusiast new to the party? Read this. A crypto trading platform is where you swap or convert the token or coin in your wallet into another digital currency or money. Most people have swamped the internet with several scamming sites and trading platforms. It is best to trade your token or coins on a secured and trusted platform. Coinbase, amongst other trusted trading platforms, is highly recommended. One of its benefits is its utmost security and affordable fees.
Cryptocurrency Derivative Markets: An Investor's Tool
Cryptocurrency derivatives markets are expressions of the investor's broader interest in crypto.
Any crypto coin or token can be the underlying asset in crypto Derivative trading.
In a Crypto Derivative market, two parties usually agree on a particular token's sale and purchase price on a specified date regardless of the market price. Usually, the agreement is quite the opposite. It implies that one party believes the cost of the specified token will increase while the other party accepts the price would decrease. Both parties will agree to pay the winner the price difference.
It results in an investor buying the currency or token at a low price then selling it higher. Also, a winning investor will make an extra profit from the price difference.
Crypto-derivatives are critical to the crypto economy for a variety of reasons. To begin, derivatives enable investors to diversify their portfolios and gain exposure to a range of cryptocurrencies. Investors can use derivatives to develop advanced techniques such as matching or exchange trading.
Importantly, derivatives can help protect a portfolio from high price volatility and unforeseeable dangers. As previously stated, derivatives such as futures and options enable traders to short an asset, implying that they are betting on prices falling. Without a derivatives market, a long-term investor with a portfolio of crypto assets cannot protect his or her holdings during weak markets.
Additionally, derivatives are critical because they aid in price discovery. The process of identifying the worth of an asset is called price discovery. It is influenced by a variety of factors, from market liquidity to information flow.
Allowing investors to go long and short may increase the efficiency of price discovery, resulting in smoother market movements. Market players benefit from optimal price discovery because they know that all relevant information has been factored into the asset's current price, increasing price dependability.
There are four primary forms of Crypto Derivative you might be interested in.
Futures: This is a legal and regulated contract between two parties that requires them to purchase or sell underlying assets at a specified time and price in the future.
Options: This is a less rigid form of the crypto derivatives market as it does not impose a duty on the parties to buy or sell an underlying asset. It is simply optional to do so.
Perpetual Contracts: This is different from futures or options. It is more flexible as parties do not have a settlement or expiration date.
Swaps: This is an over-the-counter agreement. The contract is between two parties who exchange cash flows at a date in the future by a specified formula. It is similar to forwards and not traded on exchanges.