Bitcoin, the revolutionary crypto trader was brought out as new technology to the world by a pseudonym personSatoshi Nakamoto in the year of 2009. Bitcoin is a digital asset, and the main aim of the invention of Bitcoin is to create an alternative currency to facilitate peer-to-peer transactions and exchanges with no third-party interferences. It is also used as an investment asset but is not as simple as stock markets. It is much more technologically complex. It operates on the technology of Blockchain, where Blockchain acts as a public ledger, recording all the transactions as blocks to the existing Blockchain.
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The most tech-savvy person might take a bit of time to understand the working fundamentals and tech ladder of Bitcoins and other cryptocurrencies. When you enter the world of Bitcoin and cryptocurrency, you must understand the transactions of Bitcoins are irreversible. The Bitcoin exchange is the tricky part, and on the other hand, handling Bitcoin is very complex. Checking all the transactions and dealing with the private and public keys can be hectic. Though even after all of these hassles, trading in Bitcoin is worth it.
This article will be a perfect mini guide to enlighten you about Bitcoin trading.
Factors responsible for the fluctuating price value of Bitcoin
Bitcoins are highly volatile assets. Within a matter of hours and days, the price can spike to the sky at the same time and might fall below the feet. So, before starting to make any investment, one must understand the factors that are responsible for the moving price value of Bitcoin.
- Bitcoin supply: The Bitcoin supply is the most important factor determining the price value. The supply chain of Bitcoin is limited to 21 million only. According to current data, 19.9 million Bitcoins are already in circulation.
- Press:When bad press can ruin the whole MNCs, then what’s Bitcoin? Bad press has a tremendous effect on the price value of Bitcoin. If any negative news is spreading in the air, then there are going to be repercussions faced by the whole industry.
- Macroeconomic environment: Bitcoin gets affected by the macroeconomics environment of the global economy. If the world is suffering from a crisis and wars, then it is going to affect the value of Bitcoin.
All the traders and investors want to yield profits from their trading and investment of Bitcoin. Here are a few trading methods.
- Day trading: As the name suggests, this trading technique will enable you to operate the trade moments throughout the day but you won’t be having exposure to trading during the nighttime. You can also do multiple trading in one day. This trading style is the perfect fit for you if you are looking to yield profits from small price moments.
- Trend trading: The name itself gives an insight intothe style. Here you will be trading according to the trend of the market. If the trend you are following is going down, you would want to close the position and start looking for another trend to operate upon.
- Hedging strategy: This strategy works on the principles of mitigating or reducing the risk. According to this strategy, you will be taking the opposing position against your original opening position.
- Hold bitcoin strategy: This strategy works upon buying and holding Bitcoins. The name HOLD comes from the misspelling of one of the old cryptocurrency forums. The fundamental of this strategy is about research and making positive assumptions or trying to work upon a positive outlook for holding Bitcoins for a long time.
- Exposure to Bitcoin.
1. Bitcoin derivatives:
Here, you won’t be holding the autonomy of the Bitcoin or owning the Bitcoin. You will be evaluating or speculating the price of Bitcoins with CFDs. The benefits of this are-
- Leverage and margins
- Hedging and less risky
- High Liquidity
2. Bitcoin exchange:
This is particularly for the investors who buy and hold Bitcoin and also for the traders. Here you will have direct autonomy and ownership of Bitcoin.
The Bottom Line
Bitcoins are highly volatile assets and are profitable too. But, the most important note is, that one must not put all the savings into a will to make huge money. If you lose, you must lose a tiny amount that can be manageable. To gain an amazing experience in Bitcoin training, you can check out platforms like Crypto Superstar.