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Stock trading and investing is never for the faint of heart, but one can certainly enjoy it without losing their head or their hard-earned money.
Investing in reputable fiat currencies is well established, usually easy to understand, and there are many avenues for traders to seek help. It can be a bit tedious and slow to grow if you only invest in “proven” trustworthy stocks, but it is still relatively accessible.
Derivatives
Derivatives such as futures or options increase the intensity, as investments become more speculative and complex – even more so than just looking at numbers on a screen.
The potential for profit here is incredibly huge, but so is the potential for loss. This is why derivatives are usually left to institutional investors or experienced traders who have a better understanding of how to navigate these sectors and, frankly, are more willing to lose their investments.
Now, imagine adding cryptocurrencies into the mix here.
Cryptocurrency derivatives are not a new concept, and many leading exchanges and platforms have launched services for experienced traders to try their luck with them. However, entering a speculative market that deals with notoriously volatile assets is not easy. Just because someone finds success trading futures and options with fiat currency does not mean they will have the same luck in cryptocurrencies.
Simply put, cryptocurrency derivatives are intimidating for the average trader. But is there any way to make it less scary?
Fiat Investment Services has only Become Online banking is becoming more accessible with the emergence of mobile-focused products that use simple, understandable language to guide newcomers. Any sensible retail bank financial advisor would also likely advise clients to store money in an investment account rather than a traditional savings account, promoting legitimacy that gives people a sense of security.
Many blockchain-based services are trying to do the same thing, but success has been moderate.
Whichever way you look at it, cryptocurrencies will always be more valuable. Uphill The learning curve of fiat currencies is due to how the technology and market work. In most cases, a person interested in cryptocurrencies cannot simply walk into a bank and get sound advice on derivatives trading strategies.
Making cryptocurrency derivatives more accessible requires a clear push in both education and the creation of services that don’t require a PhD to run.
For example, projects like Thalex have made this their business. Thalex is an exchange that specializes in cryptocurrency derivatives, especially perpetual contracts, futures and options, but its simple approach serves its mission of removing friction from trading idea to execution and empowering traders by offering tools that help level the playing field.
Likewise, Thalex offers a “paper trading” platform. This allows those interested in its platform to test its services and try out trades before going live, creating an environment where users can learn about the basics of cryptocurrency derivatives.
Futures and options are not an impossible concept to understand, but the unpredictability and lack of education on how they work in cryptocurrencies makes investors less inclined to explore them. To overcome this fear of crypto derivatives from fiat and crypto traders alike, there must be a way to mitigate the downside. This will not only help make the pros and cons of derivatives trading clearer, but will also help create a roadmap that traders can practically follow.