Bitcoin trading, what is it?

Bitcoin and cryptocurrencies in general have become more democratic in recent years. Now we all need to know someone near or far who either holds cryptocurrency assets in an online wallet or invests in them through derivatives such as CFDs. These so-called digital currencies are not subject to the same rules as traditional currencies and do not have a physical backing.

Today we are going to take stock of the trading of one of these digital currencies, bitcoin. We will look at what bitcoin really is, what bitcoin trading is, and what factors affect its value.

What is bitcoin and bitcoin trading?

Bitcoin is the most famous and (perhaps) the most successful cryptocurrency. It is a digital currency created by Satoshi Nakamoto in 2009. Before Bitcoin, we had already seen several attempts to create a cryptocurrency (the first of them was eCash, created in 1990), but none of them ever reached scale. Bitcoin works on a blockchain, which is a public digital directory that is decentralized and exists on the same network. Each bitcoin runs on a blockchain that records all the details of all of its transactions.

Trading bitcoin is not like buying bitcoin: of course, some online brokers allow you to buy bitcoin or other crypto-currency assets; however, just to buy 1 unit of bitcoin, you need about $24,000 (August 2022). This is the whole point of trading: when you invest in bitcoin with a CFD (Contract for Difference), instead of holding cryptocurrency assets, you bet the amount to increase it (source: Bitcoin Prime review).

How to trade bitcoins?

To trade bitcoin, you first need to find a good online broker. Some will allow you to buy assets directly, others only offer CFD investments.

To start investing your capital, you should open an account with one of the most popular online brokers such as eToro or Binance. You will then need to deposit money into it (many brokers require a minimum deposit) and search to find bitcoin. You must select the amount you wish to invest via CFD and confirm your investment. It’s really very simple and less risky than getting a bitcoin asset.

There are several “trading strategies” that can be used if you want to invest in bitcoin, such as “day trading” which consists of opening and closing your position within one trading day. This means that you will avoid entering the market at night and therefore will not pay an overnight fee. This is a good strategy for those who want to invest in the short term, and it allows you to stay on top of the market over time.

What affects the value of bitcoin?

The value of Bitcoin is constantly fluctuating: certain elements play an important role in these fluctuations. Understanding these elements will give you an edge in trading this digital currency.

The elements that play an important role in the value of Bitcoin are: press, integration (i.e. the number of merchants or others accepting payments in Bitcoin), the number of Bitcoins in circulation (which is capped at 21 million). ), etc.

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