Top performing Cryptocurrencies in 2021; the difference between Crypto trading and forex, and what you should know before you start trading Crypto CFDs

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Top performing cryptos in terms of market capitalization as of early June 2021 and brief features:

  • Bitcoin (BTC/USD): Market cap over $641B; created in 2009, BTC is the original and most popular crypto, runs on a Blockchain, (ledger that logs transactions distributed across a network of millions of computers); but BTC is relatively now an obsolete technology and mining also involves huge EV impact. BTC/USD jumped almost +122.49% in 2021 from December 2020 closing levels of 28933.00 to an April 2021 lifetime high of 64374.00; as of 19th July, around 30514.00, BTC/USD is up by almost +5.46%.; current market cap around $574B; trading volume around $21B/day.
  • Ethereum (ETH/USD): Market cap over $307B; also runs on a Blockchain platform, popular among programmers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs). ETH/USD jumped almost +491.45% in 2021 from December 2020, closing at 735.81, to May 2021 high of 4352.11; now around 1800, ETH/USD is up almost +145%; current market cap around $212B; trading volume around $14B/day.
    • Tether (USDT/USD): Market cap over $62B; unlike some other forms of cryptos, Tether is a Stablecoin, meaning it’s backed by fiat currencies like U.S. dollars and the Euro, and hypothetically keeps a value equal to one of those denominations. In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favored by investors who are wary of the extreme volatility of other coins. U.S. Fed is more interested in a Stablecoin format for its CBDC project than Bitcoin/Blockchain platform. USDT/USD was at 1.0010 in December 2020, making a high of 1.0038 in January 2021 (+0.28%), now around 0.9997, almost flat like a normal FX pair; current market cap around $62B; trading volume $40B/day.
  • Binance (BNB/USD): Market cap over $56B; The Binance Coin is a form of cryptocurrency that one can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world. Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing, or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin. BNB/USD soared almost +1735% in 2021 from a December 2020 close of 37.33 to a May 2021 lifetime high 684.83; now around 277.71, BNB/USD is up by +735%; present market cap around $47B; trading volume around $1.5B/day.
  • Cardano (ADA/USD): Market cap over $51B; a relative late entrant in Crypto space, ADA is important for its early embrace of proof-of-stake validation. This method expedites transaction time and decreases energy usage and environmental (EV) impact by removing the competitive, problem-solving aspect of transaction verification presently in platforms like Bitcoin. Cardano also works like Ethereum to enable smart contracts and decentralized applications, which are powered by ADA, its native coin. In 2021, ADA/USD jumped around +1263%, from December 2020 closing levels of 0.181489 to a lifetime high of 2.473774 in May 2021; at around 1.118070, ADA/USD is still up by almost +516%.; current market cap around $36B; daily trading volume $1B/day.
  • Dogecoin (DOGE/USD): Market cap over $44B; a favorite of celebrity traders like Elon Musk (Tesla), with less EV impact EV; unlike many other cryptos, such as Bitcoin, there is no limit on the number of Dogecoins that can be created, which leaves the coin susceptible to devaluation as supply increases. DOGE/USD gained almost 15433% in 2021, from December 2020 closing levels of 0.004670 to a May 2021 lifetime high of 0.725410; now around 0.170770, still up by almost +3557%; current market cap around $23B; daily trading volume around $1B.
  • XRP (XRP/USD): Market cap over $40B; a digital technology and payment processing platform, XRP can be used on that network to facilitate exchanges of different currency types, including fiat currencies and other major cryptocurrencies; XRP was created by some of the same founders as Ripple. In 2021, XRP/USD jumped almost +751%, from December 2020 closing levels of 0.21940 to an April 2021 lifetime high of 1.86811; now around 0.55431, XRP/USD is still up by around +150%.; current market cap around $26B; trading volume $1.7B/day.

Some of the major differences between Crypto and forex (FX) trading as CFDs:

Like FX trading, trading Crypto prices as CFDs also involves a base currency against a quote currency like BTC/USD (assuming Crypto as a digital currency). But there are major differences:

  • Crypto trading is not governed by a common regulation (no definitive global regulatory framework) which can leading to fraud, and is susceptible to money laundering and terrorist financing.
  • Crypto is a great tech innovation for system transaction efficiency and thus various countries are now keen to adopt the technology rather than accepting it as a legal tender (currency).
  • In June 2021, El Salvador became the world’s 1st country to adopt Bitcoin as a legal tender, enacting legislation that takes effect in September. This means that Bitcoin can be used to pay for goods and services throughout the country, and recipients are legally obliged to accept it.
  • The Crypto trading market is open 24/7 vs 24/5 for FX.

Factors you should know before start trading Crypto as CFDs:

  • Proper risk management and position sizing along with Crypto/CFD trading education.
  • Technical analysis
  • Trustworthy Crypto trading platforms or service providers (CFD broker)
  • Active monitoring of Crypto-related news, especially on regulation or regulatory crackdown such as in China recently
  • G20 countries/Central Bank policies for Cryptos
  • Understand the concept, technology, and prospect for various Cryptos

Bottom line:

Before trading cryptos as CFDs, traders should be well-educated on the various factors that may impact crypto prices.