For a long time, the cryptocurrency trading industry was hindered by the misconception that cryptocurrency trading was too difficult for casual investors and too cost-prohibitive for those just looking to dip their feet in the market.
But with the advent of more intuitive trading platforms, and recent explosive growth in the cryptocurrency markets, more Europeans than ever before are now turning to cryptocurrency trading as a way to supplement their income.
Trading is Becoming More Accessible
The rapid development of the industry, combined with the launch of ever more innovative and accessible trading platforms has seen cryptocurrency trading become a popular pastime for many Europeans, while some take it to the next level and make a living from it.
Arguably the biggest development inaccessibility has come from exchanges accepting deposits for a wide range of fiat currencies, allowing investors to easily enter the market using their debit or credit card. Fiat deposits can then be traded through a variety of trading pairs on the exchange, giving traders quick exposure to their cryptocurrency of choice.
The simplicity and accessibility of modern cryptocurrencies are arguably best exemplified by the recently launched Norwegian Block Exchange, or NBX. Unlike many other exchanges, NBX offers free fiat deposits and a flat, low trading fee, giving traders fewer hurdles to jump over. It also has an extremely intuitive, simplified user interface, making it ideal for those with limited trading experience.
Despite being based in Norway, NBX is a global cryptocurrency exchange platform, it offers its services to European and international clients, all of whom have access to its free fiat deposits.
Cryptocurrencies as an Alternative Investment Class
Unlike traditional securities, you don’t need to be an accredited broker to trade cryptocurrencies, and you almost certainly won’t need to hire a broker. Because of this, cryptocurrency investments are accessible to everyday investors, allowing practically anybody to gain exposure to one of the most profitable asset classes in recent history.
Nonetheless, it’s important to note that although cryptocurrencies have historically generated excellent returns for investors, they are particularly volatile, which can be either a curse or a blessing depending on your perspective. The volatility of cryptocurrencies makes them excellent assets for short-term traders—including day and swing traders, who extract profits from transient changes in pricing.
After all, Bitcoin (BTC) currently has a 60-day average volatility of 1.9%, giving traders the opportunity to capture a gain of 1.9% or more in a single day. This volatility is also seen in most other cryptocurrencies, including Ethereum (ETH) which has a 60-day average volatility of 4.4%, and Litecoin (LTC) with a staggering 8.4% volatility.
As you might imagine, these radical price swings also make cryptocurrencies potentially lucrative trading instruments for arbitrageurs who extract almost guaranteed profits by taking advantage of the price disparities of an asset across different exchange platforms.
Impressive Recent Performance
Although the economic situation in many European countries has taken a turn for the worst in recent months as a result of Coronavirus-related lockdowns, the cryptocurrency market has witnessed demonstrated extraordinary performance in 2020 so far.
Despite suffering a blip in March, the overall cryptocurrency market has grown in size by more than 50% since the start of the year. The total market capitalization of all cryptocurrencies now stands at $288 billion after climbing from just $191.5 billion at the turn of the year. At the same time, most popular cryptocurrencies have experienced meteoric growth since the start of the year, while many have reached their highest value in 2020 in July.
As a result, Bitcoin has gained over 33% since the start of the year, while Ethereum and Tezos (XTZ) are up 119% and 129% respectively. This growth is also seen among mid-cap, small-cap, as well as micro-cap cryptocurrencies—some of which have managed to appreciate by more than 1,000% YTD—including Orion Protocol (ORN) and Aleph (ALEPH).
Comparatively, the Dow Jones Industrial Average (DOW), Nikkei 225 (NI225), S&P 500 (IND), and most other major stock indices are down significantly over the same period.
Because of these striking returns, more and more people are turning to cryptocurrency investments as a way to diversify their portfolio and hedge their bets against traditional assets like stocks, shares, and commodities.