The crypto market seems to get stuck in the bear trend indefinitely, but it does not mean that you should lose interest in crypto trading. Nowadays, thousands of traders are still capable of yielding handsome gains under the current market conditions.

Smart investors realized that conventional investments might not be the best option in the crypto market. There are other instruments of speculative trading at their disposal. Let’s figure out what options are available.

What is speculative crypto trading?

Speaking about ordinary crypto trading, we mean buying and selling digital assets on an exchange platform or through an e-wallet. This is a conventional way of trading cryptocurrency which enables traders to make profits from regular bullish cycles in the market. This is also the best way of long-term investments.

The alternative to speculative trading cryptocurrency is trading derivatives: special financial instruments based on underlying assets. It means that you do not have to buy a physical token but you can speculate in their price changes.

What derivatives on cryptocurrency are available?

There are a few ways of purchasing crypto derivatives. For example, the first bitcoin futures contract was introduced in 2017. Nowadays, similar financial instruments are available for several cryptocurrencies, including Ethereum, Ripple, and Litecoin.

Another popular crypto derivative is an ETF (exchange-traded fund), an investment fund whose shares are traded on exchange platforms.In early October 2022, the US Securities and Exchange Commission (SEC) greenlighted the first ETF for bitcoin. This derivative is anticipated to become a reality for other digital tokens in the near time.

Nevertheless, both futures contracts and ETFs work on the same principle as common trading. Investors rely on price growth but not on their protracted bearish trend in which the crypto market has been stuck.

Investors may explore the benefits of CFD trading, the investment opportunity which can be easily exploited during both the uptrend and downtrend. CFD is a derivative that represents a contract between a trader and a broker to exchange the difference in the value of a financial instrument.

Traders’ profit depends on their forecast of a price change. If the forecast comes true, the profit equals the amount to which a token’s value has changed. To sum up, a CFD does not depend on either an increase or a fall in the price. The only thing that matters is the actual price change and the forecast’s accuracy.

Importantly, CFDs are commonly kept open for a few minutes or hours and are always traded with leverage, thus increasing a would-be profit. The best in a CFD is that a trader can easily gain a fat profit on a price fall. However, before you dive into trading CFDs, the first thing to do is find a trustworthy broker.

Do not forget that trading derivatives entails higher risks of hypothetical losses unlike conventional trading. At the same time, such risks are offset by would-be profits. Besides, all trading platforms running futures contracts and CFDs are regulated and operate under strict requirements.

It is up to you to decide on a particular method of trading crypto. First, it is essential to learn the nuts and bolts of all available options!