With the development of Bitcoin the revolution on the financial market began. Many who recognized this potential early and invested in the crypto currency are now millionaires. It is therefore understandable that the interest in Bitcoin trading continues. But how does trading with Bitcoin actually work? Is it still worthwhile at all and what risks can exist?
What makes Bitcoin Trading so interesting?
Due to the properties just mentioned, Bitcoin has many advantages and is becoming increasingly popular worldwide. Looking at the price development of Bitcoin, it becomes clear that the crypto currency has increased significantly in the last year. After the crypto currency was repeatedly declared a failure in the past, it now has a value of about US$10,000. In the meantime, it has already reached a value of over 20,000 US$. In comparison, the exchange rate in 2013 was still around 100 US$. This results in a price increase by a factor of 100 to 200 in just under 4 years. Experts are of the opinion that in the long term the value could even be much higher.
How does Bitcoin Trading work?
Anyone who has decided to invest in Bitcoin now generally has two options:
- Buy Bitcoins - Mine Bitcoins - The direct way would be to buy Bitcoins and hold them until a certain price increase is reached and then sell them. However, if you decide to take this step, there are a number of hurdles you must first overcome.
- Bitcoin Trading via CFDs - Fortunately, you don't have to own the crypto currency to trade Bitcoin. Alternatively, you can trade Bitcoin via CFDs. CFD stands for Contract for Difference. Here investors merely speculate on the rise or fall of the Bitcoin price.
Important basic rules and precautions
As mentioned above, Bitcoin Trading can be a great opportunity but at the same time a great risk. Therefore it is very important to follow some basic rules and take precautions to keep the risk as low as possible.
- Bitcoin Trading is speculative. Bitcoin is still comparatively young and the idea is far from being fully developed. Therefore, there is hardly any reliable empirical data about the price development. Looking at the price development, an average increase can be observed, but it is rather erratic and fluctuates strongly. This volatility is further fuelled by inexperienced traders in particular, as they react very quickly to price fluctuations and may sell too early. This then leads to a downward spiral and a vicious circle develops
- Always stay up to date. In order to successfully operate Bitcoin Trading, investors should regularly inform themselves about news on Bitcoin and the crypto scene in general. A headline can quickly lead to a price change as described above. If you miss this news, you might miss a good opportunity
- Initially work with small amounts. In order to protect yourself from major losses and to get a feel for trading, only small amounts should be invested at first. In case of a bad speculation, these are more likely to get over
- Protection through limits and stop values. Many brokers offer their investors the possibility to protect themselves from total loss with a stop value. Here a certain value can be determined in advance, at which the investor would like to sell his CFDs, so that not the entire invested capital is lost.
Conclusion on Bitcoin Trading
Bitcoin Trading can still be a worthwhile investment. The examples from the past show how high the profits can be. But this time is probably over, because since the beginning/mid 2017 really everyone is investing in this area and the gold-rush atmosphere is over. It also remains very speculative and the risk should not be forgotten out of sheer euphoria about the possible return opportunities. For investors who are not very familiar with Bitcoin or the Blockchain or people who are only interested in trading the crypto currency, trading CFDs is the easiest solution. Personal note: Since the market is influenced by external forces, it is no longer possible to make reasonable predictions. Until the middle of 2017 it was simply necessary to wait and the price of most crypto currencies rose automatically. Those times are over. An investment in block chain technology is more worthwhile.
All important information at this link: bitcoinaussiesystem.co