Bitcoin is a virtual currency that made its appearance a few years ago and that, as much as real coins, has its own quote live on the foreign exchange market. We therefore propose to find out how this currency is listed and above all how to trade Bitcoin in real time thanks to the different online speculation solutions to profit from its very high volatility.
Pro memory: what is a bitcoin?
Bitcoins are a kind of virtual currency born in 2009. This digital currency is today the first decentralized Peer to Peer payment network without central authority. It is not regulated by a specific banking system and in some cases bitcoins could be compared to digital cash.
Bitcoins are often referred to on the Internet under the acronyms “BTC” and “XBT”.
The number of bitcoins in circulation in the market is limited to 21 million units but one of its peculiarities is that it can be influenced by some events of the stock market or trade. It is therefore an extremely speculative asset.
People wishing to use bitcoins must have a digital wallet or go through a stock exchange. Bitcoins are used to buy anything, be it products or services. As bitcoins are increasingly used, their general trend remains upward over the long term.
Thus, in Canada or the United States hundreds of bitcoin distribution points are available and it is also noted that more and more e-commerce sites accept bitcoins as a payment method on the Internet or in physical form.
Bitcoins can be traded between individuals, professionals or individuals, on the Internet or against real currencies such as the dollar or the euro, taking into account the exchange rate. This is the reason why bitcoins can be dealt with: they have become a full-fledged asset with a price that knows about bullish and bearish tendencies but above all that is characterized by a very strong volatility.
Numerous investors have already made the decision to invest in bitcoins by speculating on the evolution of their listing through CFDs or other trading instruments or financial placement products.
Who is Bitcoin trading in real time?
Any investor, private or professional, has the possibility to deal with the Bitcoin quote live. Its course is in fact listed on the financial markets as much as the other stock values and it is therefore possible to use online trading taking advantage of the very high volatility of this currency.
To do so, just log in with a simple CFD online trading platform. It will obviously be advisable to have some bases in technical and fundamental analysis to correctly anticipate the future movements of this asset.
How to treat Bitcoins live from a broker?
As we have just explained, it is possible to treat Bitcoins live from a broker’s online trading platform. If you choose a Forex broker, CFDs will allow you to take a position on buying or selling on Bitcoins and, to pocket earnings, to resell your position when the course has reached a sufficiently interesting difference.
Historical analysis of the Bitcoin quotation
To better understand the interest of Bitcoin as an asset to be treated, it is necessary to take an interest in the historical technical analysis of its listing. In this way it is noted that the stock charts show different phases starting from the first listing of Bitcoin in 2010.
In the initial phase the Bitcoin course has progressively reached the value of 1 $ in 2011 and then embark on a long and very volatile bullish trend from May 2011 to March 2013 which allowed it to reach 30 dollars before falling back below 10 dollars due to of the bubble explosion.
After this period the Bitcoin quotation does not cease to evolve upwards, which suggests a good earning prospects for investors who use online trading and who are looking for a profitable value.
How do the bitcoin emission and quotation work?
One might ask how bitcoins are issued since they do not represent a physical currency and are not regulated by any banking authority like a central bank. In reality bitcoins are created by computer software that has an innovative algorithm that allows, among other things, to limit the amount of these payment units on the market. At the time of its creation, the bitcoin was defined on the basis of a finished model of 21 million total units.
But the software used to emit bitcoins is programmed to create, in a regular way and with a decreasing rhythm, the number of bitcoins emitted, respecting a precise cycle. From 2009 to 2013, the software issued 50 additional bitcoins every 10 minutes. Later, as of January 2013, the software issued 25 bitcoins every 10 minutes. Therefore, the quantity of bitcoin emitted in the same period continues to decline over time. Bitcoin knows in our days a growing popularity in the world.
But how does the listing of this virtual currency work? Bitcoins are quoted on the market continuously, ie 24 hours a day and 5 days a week (Monday to Friday). This quotation, like that of any market asset, is regulated by the relationship between supply and demand and shows a very high volatility. This is the reason why the price of bitcoin has seen a rise in price, as in 2013, with a price above $ 1,000, or more than one ounce of gold. Obviously he lost some of the points he earned, but he then passed the $ 1,000 bar again in 2017.
The historical evolution of the bitcoin course on the market
Since its creation in 2009, bitcoin has seen its listing fluctuate very significantly with strong volatility. It is interesting to observe what has been the underlying trend for bitcoins in the last ten years because the charts show a real upward trend.
This is why bitcoin is considered today as a quality investment by many investors. This asset can be treated both in the short term, thanks to its strong volatility, and in the long term, thanks to its upward trend clearly demonstrated by its historian.
In order to invest in bitcoins, it is sufficient to address the Internet, given that numerous trading platforms offer it as active and it is thus possible to take a position on its listing, both upwards and downwards, through CFDs. Thanks to CFDs you can in particular take advantage of a leverage effect like any other currency.
What are the advantages of treating online Bitcoins?
There is a reason why more and more investors are turning to online Bitcoin trading today. The speculation on this type of assets, in fact, remains particularly interesting and shows numerous advantages that we propose to discover here in detail.
First of all it is important to understand that the volume of Bitcoins is fixed and therefore it is not possible to create new volumes of Bitcoin as you can do with traditional currencies. The maximum volume of Bitcoins in circulation on the market is in fact set at 21 million units. The system also plans to divide the number of Bitcoins created to reach the 21 million Bitcoin ceiling from now to 2140 for two every four years. The request for cryptomonete, and in particular Bitcoin, is growing strongly and their production it is a limited reason why the listing trend of this asset has a very good chance of staying up in the coming years.
Moreover, it is known that more and more Internet users use Bitcoin as an exchange currency to pay for their online purchases. In fact, experts in this sector predict a significant increase in the use of these dematerialized currencies in the future with a consequent new price flare.
Bitcoin also has a significant advantage because it enjoys its status as a precursor in the world of cryptomonete. Because of its precocity, it is the virtual currency for which there are more applications and that can be used on multiple sites in the world. Even today, Bitcoin is the cryptomonet that has the strongest stock market capitalization. Despite some weaknesses highlighted at the beginning of the market, Bitcoin remains today the leader of its business sector and is able to massively retain its users.
Bitcoin also has an important advantage for experienced investors who can use this asset to diversify their investment portfolios. This is the reason why many traders invest in Bitcoin in parallel with their current investments. It is also increasingly regarded as a reserve currency, like the Yuan which has enjoyed this status for some years even though it has not yet really acquired it. It must be emphasized that the big central banks are also increasingly interested in Bitcoin as active in diversifying portfolios, such as the Central Bank of Barbados, which has hinted that it could integrate Bitcoin into its reserve currency portfolios.
What are the drawbacks of treating online Bitcoins?
Obviously, online Bitcoin trading not only has advantages, but they have to deal with some disadvantages that must be taken into consideration before starting to speculate and of which we give you the main examples here.
First, we said before that the roof for the creation of Bitcoin is 21 million units. It seems, however, that this roof is not necessarily infallible. In fact, the possibility remains that in the future this ceiling will be challenged by its creators and system administrators with, consequently, a probable upward revision. In fact, industry experts imagine the possibility of inflation between 1% and 2% applicable to Bitcoin by Central Banks. However, such a change to the long-term bitcoin creation ceiling could also reinforce investors’ interest in this virtual currency, thereby turning into an advantage with a positive impact on its price.
The volatility of Bitcoin in financial markets was considered to date as an advantage by traders investing in this asset. However, this advantage can also be considered a disadvantage if the risk it represents is taken into account. The evolution of the Bitcoin quotation in fact evolves mainly to sawtooth with movements of a sometimes very large amplitude and on important volumes, therefore the risk of loss is to be considered with the greatest attention. This is why Bitcoin trading is primarily reserved for the most aggressive traders and who are able to react quickly to possible trend reversals. It is estimated that the volatility of Bitcoin on the markets generally ranges between 2.5% and 4.5% depending on the months.
For the moment Bitcoin escapes the control of the authorities and governments and is therefore free to set its own rules. But this situation could change in the longer term and governments could create barriers to trading this virtual currency as they do for traditional currencies. The possibility of such regulation is in fact a real brake for the development of FinTech and Bitcoin is a particularly sensitive asset to events that affect China because more than half of the “minerals” come from these countries, which is why a regulation by of the Chinese government would have strong chances to strongly impact on the future of Bitcoin.
Another brake on the potential development of Bitcoin also comes from the fight against terrorism. As surprising as it may seem to be a link between this virtual currency and terrorist organizations, governments are thinking that this type of currency can fund these organizations anonymously. It is therefore possible that actions are initiated to limit this type of use with a clear impact on the listing of Bitcoin.
To sum up: must we deal with Bitcoin and in what way?
As we have seen, online Bitcoin trading has many advantages and disadvantages at the same time. One can therefore ask whether it is really interesting to deal with this asset.
Obviously investing in a booming market is always a good idea because it allows you to profit from significant transaction volumes and an equally important volatility that offers very interesting price differences in a short time. However, this type of trading is reserved for more experienced investors who have sufficient knowledge to interpret the charts and identify future trends.
We also advise against using a leverage effect that could significantly increase risks if you reverse the movement in the opposite direction from your positions. The use of stop and limit orders is a plus but must however take into account the saw-tooth evolution of this asset, which sometimes shows strong variations in the context of a well-marked underlying trend.
Investors who have sufficient availability will be able to venture into very interesting Day Trading strategies on Bitcoin but require constant attention. Technical analysis is in this case to be preferred by coupling several good indicators. However, fundamental analysis must not be overlooked because it allows us to anticipate any acceleration or reversal of movement.
The use of CFDs to invest in Bitcoin is, as we said above, an excellent idea for the freedom that this type of contract provides to its user. However, we recommend that you use Bitcoin only as a diversification asset and not as a single asset in your investment portfolios. Do not forget to follow the other cryptomete as the Ethereum that currently has the wind in its stern and plays the role of official challenger of Bitcoin.
Thanks to the various tips we have given you, you can create valid and effective strategies for dealing with Bitcoins.