A Look into Bitcoin Trading
Bitcoin is a digital currency that was created in 2009 and has seen massive fluctuations in value ever since. Big price changes can happen any time as the Bitcoin market operates 24/5. The volatility of the Bitcoin makes it a very risky investment asset, yet it attracts many investors for the same reason. Are you looking to get into Bitcoin trading? This article will give you the basic knowledge you need to engage in Bitcoin trading.
Factors that affect the price of Bitcoin
Being a decentralized currency, Bitcoin isn’t affected by most economic and political factors unlike regular currencies. The factors that do affect Bitcoin value include the following:
- Supply - There is only a limited number of Bitcoins that can be “mined”. The final Bitcoin is expected to be mined by 2040.
- Bitcoin market cap - The current value of the entire Bitcoin market, as well as its perceived value, play a significant role in determining the price of Bitcoin. This is due to the fact that traders go long on Bitcoin in times of upsurge and withdraw all their investments in times of decline.
- Bitcoin news - which influences the public’s attitude towards the digital currency.
The main strategies for trading Bitcoins
It is no surprise that there is no magic method in being successful at Bitcoin trading 100 percent of the time but here are some trading strategies that may help you.
Day trading - Day trading allows you to go for a short-term approach by taking advantage of the price movements during the same day. Day traders don’t usually buy and wait for future fluctuations. They perform a few or several hundreds of trades in one day, but each time the primary purpose is to profit from price movements in extremely liquid financial instruments.
Buy and hold – This method enables traders to opt for a passive and long-term strategy by buying Bitcoins and holding onto them for an extended period of time regardless of the market’s movement. This approach does not require traders to pay close attention to short-term price fluctuations and technical indicators. Instead, they have to choose their investment options wisely.
Swing trading - This strategy requires constant monitoring of the Bitcoin market to catch upward trends whenever they appear and keep holding onto that position until the first sign of a decline appears. It is one of the major trading approaches used by investors and a good alternative for day trading and buy and hold strategy.
The risks involved
Bitcoin trading requires caution. One day you’ll see the currency’s value reach an all-time high of near $20,000 and then the next few days you’ll see it go down to $6,000. Apart from high volatility, many Bitcoin exchanges are a target of hacking and theft.
Craft your Bitcoin strategies with r1investing
Whenever you feel like trading Bitcoin, r1investing brings everything that traders need to you. With us, you go through a quick onboarding process and get instant access to the cryptocurrency market. Here is the package of advantages you get with r1investing:
Excellent trading service backed up with top-notch technology;
One of the most compelling investment conditions on the market;
Wide range of crypto assets: Bitcoin, Ether, Dash, Ripple, Litecoin, etc.;
VODs, courses, articles about crypto trading.