As time went by, the financial industry continued to produce new investment vehicles aimed at creating new opportunities both for retail and institutional investors. Anyone who does not want to take the path of traditional investing and simply buy stocks, is in the right spot. Today there are several new trends in online CFD trading, specifically ETFs and cryptocurrencies.
Why Invest in ETFs?
For anyone who really wants to get involved in online CFD trading, ETFs represent one of the best tools to invest in the financial markets and also have a diversified risk. That is possible because an Exchange-Traded Fund (ETF) is simply a marketable security that can track a basket of assets.
Although ETFs and mutual funds have some things in common, the price of an ETF will change throughout the day as they are bought and sold. With ETFs, investors are not exposing themselves to a single asset, which is one of the most important reasons ETFs have grown so much in popularity.
Stocks are very different to ETFs because stock liquidity is low, and volatility is high. People who trade stocks in the traditional way could face severe losses if the market moves against their trade. With an ETF, the outcome will not depend on how a single asset will perform over time.
A more recent trend in online CFD trading emerged in 2017, when cryptocurrencies became popular, after rising significantly in value. At the end of 2017, the global market cap of all existing cryptocurrencies exceeded $800 billion, according to information available on coinmarketcap.com
Widely-regarded as some of the most volatile instruments available, cryptocurrencies were soon included on the online brokers’ instruments list. With prices changing fast, potential returns (or losses, in case traders, don’t anticipate the direction of the market) might have emerged.
Even though 2018 was the worst year for valuations in the cryptocurrency market, tokens like Bitcoin, Ether, XRP, and Litecoin continue to be popular. Crypto enthusiasts around the globe continue to believe that digital money will have a future, and as long as people are willing to buy and sell them, there will continue to be a market for cryptocurrencies, despite critics.
Due to the current lower valuations, cryptocurrencies are expected to be considered trading instruments with high potential and new investing tools are expected to emerge during 2019.