WHAT IS BITCOIN?
Bitcoin is a digital currency created in January 2009 following the housing market crash. It follows the ideas begun during a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto.
The identity of the person or persons who created the technology remains a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, There are not any physical bitcoins, only balances kept on a public ledger that everybody has transparent access to, that – alongside all Bitcoin transactions – is verified by a massive amount of computing power. Bitcoins aren’t issued or backed by any banks or governments, nor are individual bitcoins valuable as a commodity. Despite it not being tender, Bitcoin charts high on popularity, and has triggered the launch of many other virtual currencies collectively mentioned as ALTCOINS
How Did Bitcoin Become so Popular?
Bitcoin was the primary digital currency to be created. It is also the most respected, well-capitalized, and highly traded Cryptocurrency in the world.cryptocurrency trading allows for maximum yield when it is volatile, due to its many ups and downs. This is precisely the rationale global traders enjoy Bitcoin trading.
The media plays a big part in Bitcoin’s volatility. Whenever a breaking story surfaces, Bitcoin starts to fluctuate and traders have the chance to take advantage. History has shown that Bitcoin traders and speculators routinely push this digital currency to the forefront of CFD trading.
It is increasingly being used as the preferred payment option for merchants, money transfers, and trading purposes. Bitcoin enjoys widespread popularity as a financial trading instrument, despite no association with governments or central banks.
Bitcoins are mined using powerful computer hardware and software. A maximum of 21 million Bitcoin is going to be available, after which no further bitcoins are going to be produced. The algorithm that governs the production of Bitcoin limits the quantity to be produced, and the rate at which they will be produced. It is a finite commodity – there’s a hard and fast amount, which ensures that greater demand will always prop the worth. In this way, it’s almost like other finite commodities like petroleum, silver, or gold.
HOW TO TRADE BITCOIN?
- Open a trading account
To trade CFDs, you’ll first need a trading account. It only takes a few minutes to get set up, and you can take your first position as soon as you’ve added funds.
Keep in mind that, unlike if you were to buy and sell bitcoin, you won’t need an account with a bitcoin exchange. That’s because you trade on the prices offered we derive from multiple exchanges on your behalf.
2. Build a trading plan
You’ve chosen a trading strategy, but if you’re new to the markets you might want to consider a trading plan as well. A trading plan can help you make objective decisions even when the stake is high so that you don’t leave trades open too long – or close them too early.
Here are a few tips for creating a plan:
A. Set out what you want to achieve from your trading, broken down into short and long-term goals
B. Decide your acceptable risk from each trade, as well as how much you are willing to risk overall
C. Pick a risk-reward ratio, so you know how much potential profit you need to justify your potential loss choose which markets you want to trade. Do you want to start with just bitcoin, or try a few more?
3.Do your research
Before you start trading, you need to make sure you’re up to speed with the latest bitcoin news, in order to best understand what’s next for the cryptocurrency’s price.
When it comes to interpreting bitcoin’s behaviour, charts can also be an invaluable tool. Past data can help you make sense of how the market is moving, while comparing timeframes may provide a closer insight into emerging trends and patterns.
4. Fund your account
5. BUY Bitcoin (go long) or SELL it (go short)
What moves bitcoin’s price?
While bitcoin’s volatility makes the cryptocurrency a beautiful opportunity, it also makes it a very risky market to take a position on. Its price can shift significantly and suddenly – and since the bitcoin market operates round the clock, this is often susceptible to happen any time of day.
As a decentralised currency, bitcoin is free from many of the economic and political concerns which affect traditional currencies. But as a market still in its adolescence, there is a lot of uncertainty entirely unique to the cryptocurrency.
Anyone of the following factors could have a sudden and significant impact on its price, and as such you need to learn to navigate the risks they may open up.