What Types of Cryptocurrencies
Can You Trade?

The decentralised nature of crypto transactions, inherent security, and swift processing speeds of cryptocurrencies like Bitcoin, have led many to believe that cryptos could eventually replace traditional currencies.

While it’s uncertain if cryptocurrencies and the underlying blockchain technology will replace existing financial systems, their impact to the financial sector has already sparked significant interest, making tokens such as Bitcoin and Ethereum popular tradable commodities.

Some people opt to own the underlying asset and profit from price increases. However, the fledgling nature of cryptocurrencies means that token prices are highly volatile. Therefore, a lot of traders opt to trade cryptocurrencies using Contracts For Difference (CFDs). At this point, you’ve probably got a few questions about what crypto CFD trading is, whether crypto is CFD-friendly, and how you can trade crypto CFDs in Australia or wherever you call home.

So let's explain how you can trade one of the most exciting fintech innovations of the last few decades using CFDs.

Beyond Bitcoin: The Cryptocurrency Ecosystem

Bitcoin has been around since 2009. It’s the biggest cryptocurrency in the world, with a market cap of more than $1.2 trillion, and it attracts the most mainstream media attention. This makes it the most traded cryptocurrency out there.

However, it’s not the only token. Ethereum is regarded as a second-generation cryptocurrency. It took certain ideas from Bitcoin but introduced new concepts, such as smart contracts. Today, dozens of different tokens have taken what Bitcoin started and added something new.

In CFD crypto trading, ‘token’ is used as an umbrella term for all coins that are not Bitcoin, often collectively referred to as altcoins.

Examples of Tradable Cryptocurrencies on TMGM

Cryptocurrencies can be categorised according to their utility. All cryptos allow something of value to be exchanged via a decentralised blockchain. However, the way we categorise each crypto depends on the thing of value being exchanged and how it’s exchanged. The main categories are:

Payment Coins

These coins are used to exchange tokens with a monetary value. Bitcoin was designed to be a digital currency that allows people to pay for things via a decentralised peer-to-peer network, i.e. you don’t need a central payment processor.

Smart Contract Platforms

Ethereum was the first smart contract blockchain. These blockchains have two layers. One layer is the main blockchain through which tokens can be exchanged. The second layer allows developers to build apps, known as decentralised apps. These apps are powered by smart contracts, which execute predefined actions based on a set of rules. These actions are facilitated by the first layer of the blockchain.

Utility Tokens

These tokens are what spawned out of the smart contract revolution. Essentially, they’re the tokens required to process transactions within decentralised apps. On the Ethereum blockchain, for example, you have the main coin, ETH. You then have different decentralised apps operating on top of the main blockchain (i.e. the second layer). These apps have their own tokens, which can be used to exchange data, governance information, gaming content and much more.

Stablecoins

Stablecoins are typically used as stores of value. The cryptocurrency market is volatile, and the value of tokens can fluctuate wildly. Stablecoins peg their value to fiat currencies, such as USD. This gives them some stability. For example, USDT (Tether) is pegged to USD, which means 1 USDT is worth $1.

Based on the above categories, some of the most popular crypto CFD trading tokens worth researching are:

• Payment Coins: Bitcoin, Litecoin, Ripple
• Smart Contract Platforms: Ethereum, Cardano, EOS
• Utility Tokens: BNB (Binance), Chainlink (oracle network), Uniswap (Decentralised Exchange)
• Stablecoins: USDT (Tether), USD Coin, Dai

How to Trade Cryptocurrencies on MT5

At TMGM, our CFD trading platform gives you access to cryptocurrency-based Contracts For Difference (CFD). This is different from crypto exchanges, where you buy and sell tokens and have an ownership stake.

Crypto CFD trading is a form of price speculation. In simple terms, you’re aiming to predict whether a token’s value will increase or decrease. CFDs are a financial instrument that allows you to do this because you don’t own the underlying asset.

This means you can trade cryptocurrency CFDs without needing a wallet or exchange to store digital tokens. You’re simply making trades based on the price of an asset. In this regard, it’s a hands-off, trading-oriented style of buying or selling Bitcoin and other cryptos.

CFD vs. Crypto Investing

Here’s a quick overview of how crypto CFD trading differs from investing in cryptocurrencies:

Our MetaTrader 5 platform provides access to a diverse range of cryptocurrencies. These cryptocurrencies are paired with a currency, so they’re similar to forex currency pairs. For example, BTC/USD means you’re trading the price of BTC against the value of USD.

You can go long on the price of BTC against USD, which means you expect the value to increase. Alternatively, you can go short on the price of BTC against USD, which means you expect the value to decrease.

You’ll have access to a variety of crypto trading pairs at TMGM:

All cryptos have their unique features and differentiated potential. However, as is always the case with tradable assets, some have more potential than others. From the table above, five cryptocurrencies you might want to consider first are:

Bitcoin (BTC)

The original cryptocurrency introduced people to the power of blockchain-based transactions in 2009. Since then, Bitcoin has established itself as the most valuable cryptocurrency in the world with a market cap of more than $1 trillion. The highest price one Bitcoin has achieved, as of July 2024, is $73,000.

Ethereum (ETH)

Following the advent of Bitcoin, Ethereum was the second cryptocurrency. It provided a different take on how transactions are authorised by implementing Proof of Stake (users with a stake in the blockchain are chosen at random to verify blocks of transactions) rather than Proof of Work (miners race to be the first one to solve a complex equation that unlocks blocks of transactions). One of Ethereum’s biggest strengths is the fact its blockchain is divided into two layers, one of which runs decentralised apps (dApps). More recently, the release of Ethereum 2.0 made it suitable for the increased demand placed on the blockchain. The market cap of Ethereum in 2024 was over $277 billion, and a single coin was worth over $2,000.

Solana (SOL)

Crypto enthusiasts regard Solana as a next-generation blockchain because it takes what Ethereum started and adds to it. Specifically, Solana’s blockchain is capable of processing transactions faster and for lower fees than Ethereum. This makes it an attractive proposition for developers of decentralised apps. Although many experts believe Ethereum 2.0 will be the leading dApp blockchain, there is a lot of hype surrounding Solana, which is one of the reasons its market cap in 2024 was over $55 billion.

Litecoin (LTC)

This crypto was inspired by Bitcoin and released in 2011. It's often seen as the silver token in crypto if we assume that Bitcoin is gold. The advantages Litecoin has over Bitcoin is that transactions are faster, and the fees are lower. The market cap for Litecoin in July 2024 was $4.4 billion, with tokens costing approximately $58 each.

Ripple (XRP)

The XRP token is often referred to as Ripple because that's the blockchain it's used on. Ripple had a market cap of $29 billion in 2024, with a token price of less than $1. Supporters of Ripple (XRP) champion its transaction speeds. The technology has also been embraced by banks looking towards the future of international transactions.

Why choose TMGM as your crypto CFD broker? Our crypto CFD trading platform offers not just access to a range of popular tokens, but also comes with a host of advanced tools and features.

• Trade on a crypto CFD platform that complies with ASIC and VFSC regulations
• Get leverage of up to 1:200
• Tight spreads to keep trading costs low
• Fast execution so you get the best current prices
• 24/7 trading
• Free access to MetaTrader 5
• Research and crypto market updates – always research tokens before opening trades

The Ever-Evolving Cryptoverse

Blockchain technology is constantly evolving, which means new innovations, features, and cryptocurrencies are launching all the time. This is why CFD crypto trading is so lively and buoyant.

Given the rapid rate evolution in the world of crypto, staying informed and agile is crucial to stay on top of the game. You will need to check the latest crypto headlines, tap into our trading news feeds, monitor social media, and get expert trading insights.

The market is full of opportunities, but only if you can keep your finger on the pulse and spot them before things change. That’s why you need to be fully informed before you start trading crypto CFD products.

Start Your Crypto Discovery Journey

The volatility of crypto CFDs presents many opportunities but also risks. However, that same volatility is why you should go in with your eyes wide open and be acquainted with our risk warning.

After setting up your TMGM account and making your initial deposit, research the market and take advantage of the resources available to you with TMGM before you place your first trade.

Once you feel confident, you can delve deeper into the market, experience the world of crypto CFD trading, and see which potentially lucrative opportunities you can find.