The cryptocurrency sector is in the middle of a huge debate as to how the concept can gain wider public acceptance and the coins themselves gain greater usage. For traders in forex markets, this is an important issue because a higher volume of exchanges and usage means that there is a corresponding increase in opportunities for trades. When it comes to contracts for difference, this is an important issue.
As a CFD position can be taken to gain profits from an asset that loses values as well as goes up in price, this allows a far greater flexibility in terms of trading decisions than other forms of trading, for example a simple purchase of stock where the aim is for the price to go up over a certain term.
With cryptocurrencies there are plenty of opportunities for CFD forex traders to take short positions and profit from an asset actually falling in value. This means that while headline grabbers such as the original digital token Bitcoin and its established rivals such as Ethereum and Litecoin are the basis for many trades, other smaller coins should be on a savvy trader’s radar too.
The major cryptocurrency exchange Binance recently delisted a number of crypto coins and their prices fell accordingly. This is a perfect example of where a CFD trader who knew the market would have been able to use the situation to good advantage and make successful trades. Five of the coins that were delisted are still operational and provide great examples of how the cryptocurrency sector offers many opportunities that go far beyond the bigger established brand names.
A privacy coin designed to facilitate anonymous and trustless decentralized transfers, CloakCoin pretty much adheres to the original white paper concept behind the launch of Bitcoin. Although there was no specific controversy that caused Binance to delist the coin, lack of interest from the community and an absence of updates for the project seem to have had an effect.
It was recently ranked as the 371st biggest cryptocurrency by market capitalization, but it is likely to suffer from the move by Binance as in the wake of the delisting news its price fell by 17% in 24 hours and 73% of its entire trading volume came from the one exchange.
Modum also saw a price decrease of 17% after being delisted, which is even less surprising as it had 99% of its trading volume from Binance in the 24 hours before the announcement was made. Ranked 354th by market capitalization, the coin’s website sets out the lofty aim of being “set to revolutionize and disrupt the supply-chain industry”. However, the project’s GitHub had been quiet before the delist as the last change was as long ago as April 2018.
Ranked 182nd by market capitalization, Substratum also saw a steep decline in value after being delisted by Binance. A platform offering a decentralized storage of information on computers that are connected to it, Substratum has had some claims made against it in terms of scams, most notably one referring to faking web-based hosting service GitHub, which is used for activity numbers. Suggestions that the project suffers the same vulnerability as Oyster Pearl regarding the mining of new tokens and how to spend them have also affected confidence.
The Wings project, ranked 297th by market capitalization, is a decentralized crowdfunding platform which is based on the Ethereum blockchain. There have been no accusations against the project and the decision by Binance seems to have been based on its more general terms of trading. However, the delist once again caused prices to fall and no doubt some CFD forex traders came away with a smile while others may have less reason to be happy.
Of all the coins recently delisted by Binance, Salt was the highest ranked at 161st by market capitalization. As it only had 65% of its trading volume coming from the exchange in the 24 hours before the move, it lost only 9% of its value. However, there is some controversy surrounding the lending platform. It allows users to put up crypto as collateral in exchange for a cash loan, so it was perhaps more likely than some other projects to draw attention to the way it actually worked in practice. In November 2018, it came to light that the US Securities and Exchange Commission (SEC) was investigating. SALT’s initial coin offering was being examined as an unregistered securities offering, and there were also questions about how the company had disposed of the funds it had raised.
The moves by such an established exchange as Binance to delist coins should always raise questions for CFD traders interested in the crypto sector. “At Binance, we periodically review each digital asset we list to ensure that it continues to meet the high level of standard we expect. When a coin or token no longer meets this standard, or the industry changes, we conduct a more in-depth review and potentially delist it”, the exchange says.
With issues such as commitment of a team to a project, the level and quality of development activity, and whether there is any evidence of unethical or even fraudulent conduct being taken into account, Binance’s decisions can be a good place to start looking deeper into whether a particular crypto asset may be worth taking a position on.