What is cryptocurrency? Bitcoin, altcoins and stablecoins explained
Cryptocurrency is money that exists only online and is recorded on a blockchain. Learn about Bitcoin, Ethereum, stablecoins and how crypto differs from forex.
Contents
In 2009 someone using the name "Satoshi Nakamoto" launched something few people took seriously at the time: Bitcoin. Today the crypto market is worth trillions of dollars and sits alongside forex and stocks as a major market for traders.
What does cryptocurrency mean?
A cryptocurrency is money that exists only in digital form and is not issued by any central bank. Every transaction is recorded on a blockchain, a public ledger copied across thousands of computers worldwide, which makes tampering with the records practically impossible.
The main types of crypto
- Bitcoin (BTC): the first and largest cryptocurrency, capped at 21 million coins and often called "digital gold".
- Ethereum (ETH): a programmable blockchain that hosts smart contracts and countless other projects.
- Altcoins: any coin other than Bitcoin, such as Ripple (XRP) and Litecoin (LTC).
- Stablecoins: coins like Tether (USDT) pegged to the US dollar, so they barely move.
How is crypto different from forex?
| Feature | Forex | Crypto |
|---|---|---|
| Trading hours | 24 hours, 5 days a week | 24 hours, 7 days a week |
| Volatility | Relatively low | Very high |
| Oversight | Central banks and regulators | More limited |
| Main drivers | Interest rates and macro data | Adoption, news and sentiment |
Daily swings of 5 to 10 percent are not unusual in crypto: big opportunities, big risks.
Two ways to trade crypto
- Buy on an exchange: you own the coin and keep it in a wallet.
- Trade CFDs with a broker: you trade only the price change and can sell in falling markets.
Key safety tips
Never share your wallet keys or passwords, use only reputable exchanges and brokers, and never put money you need into a market as volatile as crypto.
See our Bitcoin and Ethereum analysis in the forecasts section.
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Trading financial markets involves risk. This article is educational and is not investment advice.
Forex and CFD trading carries a high level of risk due to leverage and you may lose more than your initial capital. Content on this site is educational and not investment advice.
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