Over the past months, Bitcoin has been at the center of a major paradigm shift within society. It’s been a long-time coming but the proof is in the numbers.
Having jumped past its major resistance level of $10k toward the end of 2020, the popular cryptocurrency soared past the $50k mark by February 2021.
The major events that propelled Bitcoin to unforeseen heights may be a mixture of economic uncertainty caused by the coronavirus pandemic, a rise in institutional investment, and big-name players – such as PayPal, Visa Inc., and now Tesla – investing in the asset.
As for what comes next, the sky appears to be the limit as a public trust and interest in Bitcoin and cryptocurrencies, in general, is at an all-time high.
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A Brief History of Bitcoin
History has shown us that with great profitability comes great volatility. The many rises, falls, and breakthroughs that Bitcoin has exhibited over its lifetime resemble the hero’s journey.
For those of us who weren’t believers in Bitcoin’s potential during its early days when Satoshi Nakamoto created the first 50 coins – i.e. The ‘Genesis Block’ – Bitcoin’s recent rise may have come as a surprise.
When Bitcoin was introduced as the first digital currency through Nakamoto’s whitepaper, it set the scene for the shifts that we are witnessing today, where prices can rise, dip and rise again without any signs of slowing down.
Since cryptocurrency markets are much more volatile than traditional markets, there are ample opportunities to profit from trading Bitcoin both in the long- and short- term.
So, if you’re interested in trading cryptocurrencies such as Bitcoin, it’s worth taking a look at the fundamentals of Bitcoin. Most commonly described as a decentralized cryptocurrency, Bitcoin does not have a singular person or institution that controls it.
As a result, the cryptocurrency markets are active 24/7 since trading can take place whenever traders choose. When investing in Bitcoin, you’re essentially investing in the cryptocurrency’s underlying technology, a.k.a. the Blockchain, which creates a payment network through which transactions are kept transparent, traceable, and immutable.
How to Trade Bitcoin
If you want to profit from cryptocurrencies there are two main paths that you can take: invest or trade. Investors buy the asset of their choice and hold on to it for a longer period as they believe the value of their investment will increase over time.
Trading is a more short-term approach that can see people earning substantial profits within weeks, days, or even minutes!
If you’re looking for ways to trade Bitcoin, know that you’re in good company. Each day, millions of traders open positions on popular cryptocurrencies such as Bitcoin and there are already several tried-and-tested methods that you can use such as day trading, scalping, and swing trading.
Day trading refers to the act of opening and closing positions within the same day. This means that traders need to pay attention to the day’s news and market movements to anticipate potential price movements. Swing trading, on the other hand, involves opening positions for a longer time, usually ranging between one and three days.
When using this technique, technical indicators are a useful tool to implement on your trading charts. Finally, the scalping approach involves opening and closing many positions within a very short time. While this may require more attention, scalping can be a profitable way to trade volatile assets without risking high deposits.
Choosing a Cryptocurrency Broker
The most important thing that traders need to keep in mind when trading cryptocurrencies is their broker’s features.
Here are a few non-negotiables that you should look out for in a broker:
- Leverage: One of the many perks of trading CFDs on cryptocurrencies is that you don’t need to own the underlying asset you’re trading. This makes it possible to leverage your positions and increase your profits without increasing your deposits. For example, if you want to open a position valued at $10,000 using 1:200 leverage, you’ll only need to deposit $50 into your trading account.
- 24/7 Trading: The cryptocurrency market never closes, so why should you not be able to access it at all times? Offering 24/7 access to the market is crucial if you want to stay ahead of the game. Pair that with 24/7 support from a 5-star customer care team and you’ve got yourself a recipe for success!
- Crypto Deposits and Withdrawals: Crypto markets move quickly and so should you. With multiple deposit options available, including Bitcoin, you can start trading soon after funding your account. Once you’re done trading, you can withdraw your funds with the same ease!
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