Crypto currencies pushed into the lime light in December of 2018, rising to fresh highs seemingly daily.  Prices of some of the more popular crypto currencies such as Bitcoin, Ethereum, Ripple and Litecoin have settled back toward earth, just as liquidity has taken hold in a new and rising market. There are several types of crypto currencies, some that offer payment methods while others are more focused on platform, allowing many different types of online platforms to arise and allowing speculators to bet on the crypto currency market.

Fresh Highs Generate Crypto Currency Liquidity

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Crypto currencies such as bitcoin experienced a surge in popularity as the price of the most liquid crypto currency hit all-time highs at 19,000. Since December, bitcoin and most of the other crypto currencies, have declined in value, but their historic rise brought many players to the market. One of the important factors that lead to the increase in online trading platforms, was the ability to short the crypto currency market. Prior to 2018, traders could only buy and sell crypto currencies, but they had no way to short or hedge future exposure. The rise of brokers and an active futures and forward markets have increased the liquidity of the crypto currency market.

Crypto Currency Categories

The most popular crypto currencies and the ones that have the most liquidity are crypto currencies that focus on payment methods. These include Bitcoin, Bitcoin Cash, and Litecoin. These crypto currencies are attempting to take the place of other payment methods and are accepted in several retain outlets around the globe. There have been reports of payments to governments for taxes in crypto currencies as well as real-estate transaction using bitcoin.  Bitcoin provides the most liquidity around the globe but is losing some market share to bitcoin cash.  One of the issues that makes bitcoin popular is also leading to its decline in market share. Bitcoin requires a huge amount of power to mine, since miners have to use high power computers to handle each transaction. All of these cryptos currencies are available on multiple platforms including the regulated U.S. entity Coinbase.

A second category of crypto currencies is platform related. The applications that built Ethereum which is blockchain-based, a public computing platform and operating system. Ether coins are created on Ethereum and used to pay for use.  A third type of category is hybrid crypto currencies which can be used on platforms as well as for payment methods. An example is the Ripple crypto currency.

How to Take Crypto Currencies Positions

One of the benefits of trading crypto currencies with a forex broker, is that you do not have to take the actual deliver of the crypto currency into a wallet. Most forex brokers offer contracts for differences (CFDs) which provides you with a security which is the change in the value of the price of a crypto currency. You are taking a position on the direction of the crypto currency, and do not have to exchange your underlying currency and the crypto currency. By using a forex broker, you can trade crypto currencies online using state of the art platforms.

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