Trading of Cryptocurrency CFDs vs. Traditional investment
Trading of Cryptocurrency CFDs vs. Traditional investment
Cryptocurrencies are the next step in financial evolution. As the first decentralized digital currency based on a system that operates without a single central bank or administrator, BTC represents an advance in both financial trading and asset allocation. Online currency trading has just improved ... but will it replace traditional investment?
Bitcoin vs. Investment in gold
People like gold It is a safe asset. That's why most investments are made in this precious metal. But the first days of the gold rush are over; gold and bullion buyers should not treat it as a plan to get rich quickly. Even so, it is still a good long-term investment.
There is evidence of ancient gold mines and mining operations dating back to 200,000 years before Christ. Civilizations began to trade gold around 600 BC, and even today it is used by traders and investors with great enthusiasm. It is also certain that gold will never lose its intrinsic value as a precious metal with numerous practical applications. Also, we must say, that the fluctuations are less extreme than many other investment products, including Bitcoin.
We could also assume that Gold could have rebounds. The US dollar is negatively correlated with gold, and any weakness in the former should have a positive impact on the latter. The cost of gold mining could increase substantially, and more miners could suspend gold mining operations. If that happens, prices will increase since gold reserves will be limited.
Gold represents approximately 1-2% of the market share. An increase should lead to price spikes. In addition, any rebound in the inflation rate could increase the price of gold. It should also be considered that the debt / GDP ratio in developed countries has been constantly increasing, this is a sign of a greater supply of money, which is positive for precious metals, such as gold.
Bitcoin has a finite supply, but it has a clear difference compared to other investments. For the first time, we have something that is not totally controlled by any entity, such as a government or a bank. However, Bitcoin is unlikely to completely replace gold as an investment asset because the system has not yet scaled common markets, where it can reach a truly "universal" state and be used as a legitimate form of currency.
A Bitcoin investment strategy
We are now witnessing irrational behavior in the cryptocurrency market. People think it's the future, but it reminds me a lot of the dot.com bubble ... and it could burst drastically.
Bitcoin is by far the most popular cryptocurrency. People are throwing money there thinking that it will never be devalued since there is no Central Bank to regulate it. At some point you have to do it, because people use it for exchanges / services, and it is difficult to charge in fractions. If a Bitcoin is worth, for example, 14,400 USD, and I using Bitcoin I charge you $ 100 for my plumbing services, in Bitcoin terms this means that you must pay me a fraction of the currency. Therefore, it becomes ridiculous at some point if the price goes too high. We would need:
create an additional supply;
re-set the price if it goes too high;
propose an alternative if we can not receive payments in small amounts.
One more thing to note is that we go higher 2018-2019 with shares, Bitcoin could collide with stocks and real estate. Usually, all risky assets explode together, so we could see a destruction of their value. When the loans are canceled, it actually reduces the supply of money, while the assets are devalued and the currencies are strengthened in that environment.
Do you want to know more about Bitcoin? Improve your knowledge by reviewing our article. What is Bitcoin? now!
Bitcoin Futures
The adoption of BTC Futures should be seen as a very positive step for Bitcoin. Banks say that Bitcoin is generally a bad investment because it falls into unregulated space, so it calls it "risky"; and they say it because it could affect the personal banking services of the banks, making it easier and cheaper to make transactions between people and / or merchants who use Bitcoin technology. The introduction of BTC futures is a move towards regulated space, which reduces the risk of the Bitcoin profile.
Fundamentally, when you consider what Bitcoin offers to society, in the sense that it is a wealth reserve (especially for countries with extremely devalued currencies and hyperinflation) and a platform that allows a transactional service, there is a possibility that it reaches 70,000 USD for Bitcoin, which would take it to a market capitalization level of USD 1 trillion, and even a fraction of the gold market, which is valued at 7 trillion dollars. Also keep in mind that Bitcoin is much easier to use for transactions, unlike gold.
In addition, the technical analysis shows that you could reach $ 70,000 for Bitcoin, as crazy as it sounds. The use of futures exchanges should provide more liquidity in the currency, making it less volatile.
Other investment risks of Bitcoin
Governments could press hard to eliminate this technology, because it could rival their own national currencies, which would make it difficult to implement monetary policies.
In addition, banks have a lot of money and can decide to buy Bitcoin to protect the revenues of their personal banking department that are at risk with this technology.
For conspiracy theorists, it might also be possible for banks and governments to employ hackers to get the technology out, making it unsafe and causing a mass exodus of money in the cryptocurrency market. This is one of the general security risks of Bitcoin.
As central banks print more and more money over time, devaluing the value of fiat currencies, their current quantitative easing programs could be considered very risky and inflating the Central Bank's balance sheets. As central banks embark upon such far-fetched decisions, they demonstrate no responsibility for safeguarding the long-term value of their respective fiat currencies in a currency war environment.
The key factor with the announcement of CME is that now large investors can cover their exposure so they have no reason to avoid Bitcoin. The days to come will reveal how much institutional interest there is. If they can protect themselves, they will enter. Do you remember the dot.com bubble? Conservative funds were forced to invest in high-tech risky stocks because their results seemed poor compared to technology funds. The same can happen with cryptocurrencies. When funds get double digit returns by putting some of their funds in crypts, they will all join.
Is Bitcoin safe?
It is stated that Bitcoin can not be pirated, manipulated or altered; however, digital exchanges or wallets are vulnerable, as are online bank accounts. If you have Bitcoin, you can become a target.
As Bitcoin does not really exist in a physical sense, in the wallet there are secure digital keys in relation to Bitcoin. The private key is a secret code that allows the user to test the ownership of their Bitcoin. Portfolios installed on smartphones that use an application, or web-based wallets, can also be activated in currency exchanges. Bitcoin owners must ensure that the security of their computer is up-to-date, and such exchanges require a high level of security.
James Hill, a software developer at consulting firm Scott Logic, says that the core security of the blockchain algorithm, which underpins all cryptocurrencies, is strong. He mentions that the real risk comes from losing the keys that prove your property on the coin.
How to trade in Bitcoins
The traders have asked me many times:
Where to exchange bitcoins;
How to exchange bitcoins for usd;
We can exchange Bitcoin for profits;
Is there any way to exchange Bitcoin in Forex?
How to trade in Bitcoins with MT4
Gold could be going through a revaluation phase, where cryptocurrencies such as Bitcoin now rival it as the preferred risk asset, or when inflation risks persist. This sudden popularity of crypto has potentially weakened the demand for gold. In addition, there is a possibility that the Federal Reserve of the United States will raise rates three times in the next 12 months, and this will change gold investments in bonds.
For that reason, as well as everything that has been mentioned above and due to the high potential of the price of the cryptocurrency, the correct thing in our opinion is to make Bitcoin trading a reality compared to other currencies, such as the CFD BTC / USD that Admiral Markets offers , for example.
Due to the uncertainty surrounding Bitcoin as an asset, you can take advantage of your daily movements for your benefit. In short, when investing in Bitcoin, the traditional strategy of buying and holding the position remains insecure.
The Bitcoin strategies you can choose to adopt are daytrading, intra-week trading and scalping. You can always see our professional webinars and request advice related to trade on our MT4 platform.
Traditionally, there is a price cycle in each asset and financial instrument. We distinguish four main price / market cycles.
Accumulation
Profit margin
Distribution
Reduction
Depending on the market, they share similar characteristics and go through similar phases. The markets are cyclical, they can go up, reach a maximum, go down and reach a minimum. When one cycle ends, the next one begins.
Many investors and traders generally do not recognize that the markets are cyclical or forget to realize the end of the current phase of the market. In addition, even when you accept the existence of cycles, it is almost impossible to choose an upper or lower part of the cycle. However, understanding the cycles is essential if you want to maximize commercial or investment returns.
By using our graphs, you will be able to exploit the largest BTC / USD CFD movements in your lower time frames, such as the five-minute chart, and your higher time frames, such as daily charts. You may also want to invest in the strength (or weakness) of the BTC by trading the weekly and monthly table.
By using the leverage offered in an intelligent way and trading the BTC / USD CFDs, you may get much higher returns than simply buying BTC.
conclusion
Should Bitcoin become a form of currency? As with all technology, something better may appear in the future, and when this happens, it could cause the Bitcoin value to decrease, doing it dramatically. Unlike currencies, Bitcoin does not have an interest yield, therefore, in a normalizing monetary policy environment with increasing rates, it is better not to try to treat this product as a long-term value deposit to finance your retirement.
Although the BTC presents innovation and perhaps evolution as a virtual payment system, there are still many problems in terms of security and sustainability that must be addressed before we can encourage customers to use it or accept it as a payment method. While we believe that Bitcoin could be a viable investment option, you should never overcome the stability and versatility of gold as a product to invest.
We suggest starting with a small investment amount, perhaps a small fraction of your capital, approximately 0.1%, to learn how it works, how to trade with it and how to handle it safely in a wallet.
If you are going to trade BTC / USD CFDs - or Gold Spot CFDs - we suggest you pay close attention to the risks that may be involved with the trade and you should always practice any operation in a Demo account, before venturing into the live market .
Cryptocurrencies are the next step in financial evolution. As the first decentralized digital currency based on a system that operates without a single central bank or administrator, BTC represents an advance in both financial trading and asset allocation. Online currency trading has just improved ... but will it replace traditional investment?
Bitcoin vs. Investment in gold
People like gold It is a safe asset. That's why most investments are made in this precious metal. But the first days of the gold rush are over; gold and bullion buyers should not treat it as a plan to get rich quickly. Even so, it is still a good long-term investment.
There is evidence of ancient gold mines and mining operations dating back to 200,000 years before Christ. Civilizations began to trade gold around 600 BC, and even today it is used by traders and investors with great enthusiasm. It is also certain that gold will never lose its intrinsic value as a precious metal with numerous practical applications. Also, we must say, that the fluctuations are less extreme than many other investment products, including Bitcoin.
We could also assume that Gold could have rebounds. The US dollar is negatively correlated with gold, and any weakness in the former should have a positive impact on the latter. The cost of gold mining could increase substantially, and more miners could suspend gold mining operations. If that happens, prices will increase since gold reserves will be limited.
Gold represents approximately 1-2% of the market share. An increase should lead to price spikes. In addition, any rebound in the inflation rate could increase the price of gold. It should also be considered that the debt / GDP ratio in developed countries has been constantly increasing, this is a sign of a greater supply of money, which is positive for precious metals, such as gold.
Bitcoin has a finite supply, but it has a clear difference compared to other investments. For the first time, we have something that is not totally controlled by any entity, such as a government or a bank. However, Bitcoin is unlikely to completely replace gold as an investment asset because the system has not yet scaled common markets, where it can reach a truly "universal" state and be used as a legitimate form of currency.
A Bitcoin investment strategy
We are now witnessing irrational behavior in the cryptocurrency market. People think it's the future, but it reminds me a lot of the dot.com bubble ... and it could burst drastically.
Bitcoin is by far the most popular cryptocurrency. People are throwing money there thinking that it will never be devalued since there is no Central Bank to regulate it. At some point you have to do it, because people use it for exchanges / services, and it is difficult to charge in fractions. If a Bitcoin is worth, for example, 14,400 USD, and I using Bitcoin I charge you $ 100 for my plumbing services, in Bitcoin terms this means that you must pay me a fraction of the currency. Therefore, it becomes ridiculous at some point if the price goes too high. We would need:
create an additional supply;
re-set the price if it goes too high;
propose an alternative if we can not receive payments in small amounts.
One more thing to note is that we go higher 2018-2019 with shares, Bitcoin could collide with stocks and real estate. Usually, all risky assets explode together, so we could see a destruction of their value. When the loans are canceled, it actually reduces the supply of money, while the assets are devalued and the currencies are strengthened in that environment.
Do you want to know more about Bitcoin? Improve your knowledge by reviewing our article. What is Bitcoin? now!
Bitcoin Futures
The adoption of BTC Futures should be seen as a very positive step for Bitcoin. Banks say that Bitcoin is generally a bad investment because it falls into unregulated space, so it calls it "risky"; and they say it because it could affect the personal banking services of the banks, making it easier and cheaper to make transactions between people and / or merchants who use Bitcoin technology. The introduction of BTC futures is a move towards regulated space, which reduces the risk of the Bitcoin profile.
Fundamentally, when you consider what Bitcoin offers to society, in the sense that it is a wealth reserve (especially for countries with extremely devalued currencies and hyperinflation) and a platform that allows a transactional service, there is a possibility that it reaches 70,000 USD for Bitcoin, which would take it to a market capitalization level of USD 1 trillion, and even a fraction of the gold market, which is valued at 7 trillion dollars. Also keep in mind that Bitcoin is much easier to use for transactions, unlike gold.
In addition, the technical analysis shows that you could reach $ 70,000 for Bitcoin, as crazy as it sounds. The use of futures exchanges should provide more liquidity in the currency, making it less volatile.
Other investment risks of Bitcoin
Governments could press hard to eliminate this technology, because it could rival their own national currencies, which would make it difficult to implement monetary policies.
In addition, banks have a lot of money and can decide to buy Bitcoin to protect the revenues of their personal banking department that are at risk with this technology.
For conspiracy theorists, it might also be possible for banks and governments to employ hackers to get the technology out, making it unsafe and causing a mass exodus of money in the cryptocurrency market. This is one of the general security risks of Bitcoin.
As central banks print more and more money over time, devaluing the value of fiat currencies, their current quantitative easing programs could be considered very risky and inflating the Central Bank's balance sheets. As central banks embark upon such far-fetched decisions, they demonstrate no responsibility for safeguarding the long-term value of their respective fiat currencies in a currency war environment.
The key factor with the announcement of CME is that now large investors can cover their exposure so they have no reason to avoid Bitcoin. The days to come will reveal how much institutional interest there is. If they can protect themselves, they will enter. Do you remember the dot.com bubble? Conservative funds were forced to invest in high-tech risky stocks because their results seemed poor compared to technology funds. The same can happen with cryptocurrencies. When funds get double digit returns by putting some of their funds in crypts, they will all join.
Is Bitcoin safe?
It is stated that Bitcoin can not be pirated, manipulated or altered; however, digital exchanges or wallets are vulnerable, as are online bank accounts. If you have Bitcoin, you can become a target.
As Bitcoin does not really exist in a physical sense, in the wallet there are secure digital keys in relation to Bitcoin. The private key is a secret code that allows the user to test the ownership of their Bitcoin. Portfolios installed on smartphones that use an application, or web-based wallets, can also be activated in currency exchanges. Bitcoin owners must ensure that the security of their computer is up-to-date, and such exchanges require a high level of security.
James Hill, a software developer at consulting firm Scott Logic, says that the core security of the blockchain algorithm, which underpins all cryptocurrencies, is strong. He mentions that the real risk comes from losing the keys that prove your property on the coin.
How to trade in Bitcoins
The traders have asked me many times:
Where to exchange bitcoins;
How to exchange bitcoins for usd;
We can exchange Bitcoin for profits;
Is there any way to exchange Bitcoin in Forex?
How to trade in Bitcoins with MT4
Gold could be going through a revaluation phase, where cryptocurrencies such as Bitcoin now rival it as the preferred risk asset, or when inflation risks persist. This sudden popularity of crypto has potentially weakened the demand for gold. In addition, there is a possibility that the Federal Reserve of the United States will raise rates three times in the next 12 months, and this will change gold investments in bonds.
For that reason, as well as everything that has been mentioned above and due to the high potential of the price of the cryptocurrency, the correct thing in our opinion is to make Bitcoin trading a reality compared to other currencies, such as the CFD BTC / USD that Admiral Markets offers , for example.
Due to the uncertainty surrounding Bitcoin as an asset, you can take advantage of your daily movements for your benefit. In short, when investing in Bitcoin, the traditional strategy of buying and holding the position remains insecure.
The Bitcoin strategies you can choose to adopt are daytrading, intra-week trading and scalping. You can always see our professional webinars and request advice related to trade on our MT4 platform.
Traditionally, there is a price cycle in each asset and financial instrument. We distinguish four main price / market cycles.
Accumulation
Profit margin
Distribution
Reduction
Depending on the market, they share similar characteristics and go through similar phases. The markets are cyclical, they can go up, reach a maximum, go down and reach a minimum. When one cycle ends, the next one begins.
Many investors and traders generally do not recognize that the markets are cyclical or forget to realize the end of the current phase of the market. In addition, even when you accept the existence of cycles, it is almost impossible to choose an upper or lower part of the cycle. However, understanding the cycles is essential if you want to maximize commercial or investment returns.
By using our graphs, you will be able to exploit the largest BTC / USD CFD movements in your lower time frames, such as the five-minute chart, and your higher time frames, such as daily charts. You may also want to invest in the strength (or weakness) of the BTC by trading the weekly and monthly table.
By using the leverage offered in an intelligent way and trading the BTC / USD CFDs, you may get much higher returns than simply buying BTC.
conclusion
Should Bitcoin become a form of currency? As with all technology, something better may appear in the future, and when this happens, it could cause the Bitcoin value to decrease, doing it dramatically. Unlike currencies, Bitcoin does not have an interest yield, therefore, in a normalizing monetary policy environment with increasing rates, it is better not to try to treat this product as a long-term value deposit to finance your retirement.
Although the BTC presents innovation and perhaps evolution as a virtual payment system, there are still many problems in terms of security and sustainability that must be addressed before we can encourage customers to use it or accept it as a payment method. While we believe that Bitcoin could be a viable investment option, you should never overcome the stability and versatility of gold as a product to invest.
We suggest starting with a small investment amount, perhaps a small fraction of your capital, approximately 0.1%, to learn how it works, how to trade with it and how to handle it safely in a wallet.
If you are going to trade BTC / USD CFDs - or Gold Spot CFDs - we suggest you pay close attention to the risks that may be involved with the trade and you should always practice any operation in a Demo account, before venturing into the live market .
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ReplyDeleteThis is one reason why the company became successful quickly. There is no one responsible for the company's management or maintenance. Miroslav Vyboh started his company with one million shares.
ReplyDelete