What is Bitcoin?
May 17, 2021, | AtoZ Markets – In 2009 the world was graced with the introduction of the first decentralized digital currency, Bitcoin. Over a decade on BTC has prevailed and today is the largest cryptocurrency by market cap. Using peer-to-peer technology to operate with no central authority the bitcoin blockchain was created to enable quick and secure transactions.
Bitcoin originated following a set of ideas outlined in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. Only approximately 21 million bitcoins cease to exist. Over the years the blockchain has evolved and engineers have designed additional protocols that have helped improve the quickness and privacy of transactions, including the Omni Layer, Lightning Network and Liquid Network. Another prominent example is the Bitcoin Cash hard fork in 2017. Bitcoin Cash is now a very viable crypto on its own.
With 3000+ digital currencies circulating today, Bitcoin can be credited with spawning this new revolution. Bitcoin is widely available online and will continue to be a dominant force in the crypto space.
What Moves Bitcoin's Price?
To get in on a surging opportunity or short the latest bubble, it is important for traders to understand what impacts Bitcoin's Price movements.
- Supply:
There will only ever be 21 million Bitcoin in circulation, expected to be exhausted by 2040. This built-in scarcity is a key factor that can support Bitcoin's long-term value.
- Hype / News:
As we have seen time and time again, particularly the "Elon Musk Effect", Bitcoin is sensitive to relevant news or events, and its price fluctuates. Any "bad" press or news concerning security, regulation, value, or longevity will have a negative effect on Bitcoin's market value. So, it's important to stay in the know.
- Adoption / Integration:
Bitcoin's public profile can also depend on new adoption, or perhaps integrations into existing payment systems or financial frameworks. The more demand for the crypto asset may have a positive impact on its price.
How to trade BTC/USD
Day Trading BTC/USD:
Day trading is the strategy of opening and closing positions within a single day. Do you want to profit from BTC's short-term price movements? This strategy may be your best option. The key goal here is to profit from immediate movements.
The Trend can be your Friend:
This style of trading is when positions are opened or closed based on a current market trend. For example, if the market is in a bullish trend, traders may decide to go long, then short if the market is bearish. trend trading is always straightforward, but it can help traders take day-to-day volatility in their stride and preventing them to get caught up in short-term market movements.
Hedging your bets:
In a bid to protect their BTC/USD positions and mitigate risk some traders choose to opt for the hedging strategy. Let's say you are concerned that the market will move against you, hedging is when you take an opposing position to one that is already open. For instance: Let's just say you have Bitcoin in your portfolio and there is concern about a drop in price, here traders can open a short position on BTC with CFDs. So, if the expected fall does occur gains made on the short position will offset any loss on your owned Bitcoin.
The HODLing strategy:
For many Bitcoin can be a HODLing game. Derived from a misspelling of "hold" this refers to the buy and hold strategy in crypto. This is popular to the fresher entrants to the market who may be unsure of how it works and fear losing currency, and it involves the holding of your BTC for a longer time span.
What is leverage?
Leverage, sometimes referred to as margin is used by traders to increase potential return. Through leverage, traders can invest a smaller amount of funds to open a larger market position. At TradeOr we offer leverage of 10:1 on crypto pairs meaning you can trade 10x the value that is in your trading account. So, let's say for example you want to trade $2,000 on BTC/USD. With the leverage of 10:1, if you open this position, only one-tenth of the fund represents your own funds, the remaining $18,000 is subsequently "borrowed" from TradeOr. Let's give a full example.
If you deposit $2,000 into your trading account, with TradeOr to open a position on BTC/USD you will be able to open a trade to the amount of $20,000. In the instance that this trade sees a 10% return ($2,000) your account will increase by 50%, to $4,000. However, with trading, you can lose. So, in the same example if the result went the opposite way and you saw a 10% loss you would have wiped out the funds in your account. It's for this reason leverage can be seen as a double-edged sword and it is important that when trading with leverage it's done with strict risk management.
Trading BTC/USD With TradeOr?
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Speed is everything when it comes to trading financial markets. Our traders can access instantaneous funding by using Bitcoin as their source of power. Deposit using BTC and start using the crypto asset to trade or invest in all major financial instruments.
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We all need a helping hand sometimes. So, that is why we offer 24/7 support to all traders. No query is too big or too small for our team of trading veterans.