Getting to know cryptocurrency markets a little better
The cryptocurrency markets have been unstable for as long as they've been around, with the current dip going on for almost 2 months. Regardless of that, the growing number of crypto users worldwide is hard to ignore, with recent estimates suggesting that users have almost tripled from 35 million to 101 million since 2018.
The demand for access to trading has forced the hand of many asset trading platforms to offer crypto assets to customers. Take for example trading giants IG Markets, which offers one of the oldest platforms-launched back in 1974. Another name that's become popular within the crypto industry is eToro. This platform was founded back in 2006 before Bitcoin had even been put onto the market.
While it's undeniable that crypto trading is edging towards the point of being mainstream, there are still a few blockers that are stopping many newcomers from entering the market. Part of that are the seemingly complicated trading exchange platforms used by customers. Although this is mostly untrue, we can sympathise with some comments made by customers regarding usability of certain platforms.
There are some who believe that the use of trading platforms may be the answer to entering the crypto market for many users. Why? Because the vast majority of trading platforms have been around for years and feature a first-rate security system, secure payment methods, and a rigorously tested exchange. Moreover, many of these platforms bring with them a reputable name and a thriving community of users.
What is the difference between a trading platform and crypto exchange?
Bybit is one of the leading crypto exchanges and has been around since 2018, entering the market at about the time crypto began to emerge as a trading option for many people. It's a typical crypto trading platform, offering an almost endless list of coins and a range of ways to buy, sell, invest, and even short cryptocurrencies.
Trading platforms offer a service allowing users to trade on much more than just digital currency. Traders will have access to stocks such as gold, crude oil, precious metals, trading on stock prices of major companies, and the list goes on. The fact is there's nothing new to learn about these trading platforms, but the really interesting thing for crypto enthusiasts is the normalisation and acceptance of the crypto industry.
For experienced traders that have been working with forex, shares, indices, and commodities, crypto isn't going to be such a scary prospect. However, it's the high volatility that scares off many of the more experienced traders-but, in equal measures, it's the volatility that makes it so interesting. We are likely to see the number of crypto traders rise in spikes, as each of these big players in the online trading sphere open their doors to cryptocurrency.
The ubiquitousness of crypto makes it difficult for even the most reclusive trader to ignore. Now, with trading platforms offering markets and promoting them through their apps and desktop sites, it's going to be difficult for traders to ignore the draw of the highly profitable crypto market.
Some, possibly ambitious, projections for the industry have it valued at $1,758 billion by 2027. Given the current market value of Bitcoin (BTC) this may seem an impossibility. But, if the value of BTC rises back up and pushes beyond April's all-time-high price of $64,805, then this would come as no surprise. Decentralized finance was the promise, but as we see blockchain technology continue to influence all sectors of industry, we may actually be moving closer to centralized cryptocurrency.
Do trading platforms offer more than exchanges?
It's the complete package on offer that's attracting some crypto users to trading platforms. But, for the vast majority of crypto traders, they already know what they want. Focusing the attention of the service into cryptocurrency is what most of these traders want. Undeniably, the rise in demand for access to crypto has benefitted the online trading industry as a whole, notably for companies targeting amatuer home traders.
Most crypto traders have arrived at that point out of necessity or curiosity. Either way, these users are tailor-made for trading, as they have taken it upon themselves to explore ways to manage and invest into a relatively complex financial industry. The global economy suffered a lot during the pandemic, forcing many to turn to other means to bring in money and manage their finances. Cryptocurrency exchanges offered a high-risk, high-reward option, which to many seemed like the best decision. We saw soaring numbers of crypto users in Latin America, which was one of the regions that was heavily hit by the pandemic.
Most of the major cryptocurrency exchange platforms offer a fairly comprehensive service. For those that are entirely new to trading or crypto, they may feel perplexed by the user-interface they see. But, once you run through the basics, the whole thing becomes fairly clear. There are a few unique features that allow you to invest crypto assets in "Earn" programmes, which pay out interest over a set period of time. As well as that, there are "Futures" markets available through certain platforms, which offer the ability to short against the price of specific crypto assets. These aren't features that are going to push the value of crypto exchanges above trading platforms. But, for those crypto evangelists, this will make the difference.
Amatuer trading is transforming the industry and companies are tailoring their apps and sites to suit the newcomer. Take for example, the crypto exchange giant Binance, which now offers a "Lite" and "Professional" version of their services, with the Lite version simplifying everything and making trading even easier.
What can we expect to see in crypto space soon?
The focus for crypto in general is to try and bring the price of the market to a more stable position, the market volatility is still raising questions over the value of digital currency as an asset class. This is the blocker for crypto. The thing that is stopping it from becoming what it is destined to be. The hype will plateau and we'll be left with some game-changing technology and a bustling new industry. The coins that have been built on solid foundations, with a genuine plan and one which is aimed at revolutionising the way things have been done in the past, these will excel and be around for the long term. While the others that have been created to game the market and make a mockery of things, they will fall and fade into the distance.
In terms of trading
platforms and crypto exchanges, as they both offer the same service it's really
not a problem for the industry as a whole. Ultimately, the more access the
public has to crypto, the more the industry will grow. Crypto has reached a
point now where the value of blockchain is established and broadly demanded.
Fintech is growing rapidly and cryptocurrency is at the heart of it. The buying
and selling of digital currency is becoming ever-quicker, easier, and with just
the touch of a button, users are able to make substantial finance moves. This
kind of accessibility is a result of public demand and the crypto space is
adopting at the right pace.
