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Day trading has been a popular way of making a profit in financial markets for centuries, and has become particularly common since the growth of computer-assisted trading platforms in the 1990s. Day traders try to capitalize on asset price movements during a single trading day. Commonly used in stock and forex markets, day trading has also been enthusiastically embraced by the cryptocurrency trading community over the past few years.
However, the acceptability of crypto day trading from an Islamic law perspective remains a gray area, with many Muslim investors uncertain whether it's a halal (permitted) or haram (prohibited) activity. This article covers the basic concepts related to cryptocurrency day trading and its alignment with core Islamic principles.
Key Takeaways:
Crypto day trading involves buying and selling cryptocurrency assets during a single day, with the purpose of profiting from intraday price swings.
Unlike day trading in stocks, bonds, commodities and forex, crypto day trading operations are settled nearly instantly, and thus do not violate the Islamic finance principle of not trading an asset you don't actually own.
Depending upon the chosen asset and the approach a trader adopts, crypto day trading may be considered a halal activity.