Bitcoin vs Euro - Cryptocurrencies

Instrument description

Cryptocurrencies have grown significantly in Europe, and it is evident with the growing infrastructure of traders, applications, and ATMs (Automated Teller Machines). The knowledge and information surrounding cryptocurrency has grown, but still, its consumer base is not fully understood and evaluated.

The European Union (EU) as a whole is considered as the second-biggest economy. The Gross Domestic Product (GDP) of the EU in 2019 was $18.292 trillion, and the EU accounts for more than 22% of the global economy. The economic significance of the EU makes it one of the most important places for people who favor and want to invest in digital currencies such as Bitcoin. Any policy or decision that the EU takes directly influences the entire development and adoption of blockchain technology.

EU has declared the buying and selling of cryptocurrencies legal across member states, but the taxes on crypto assets vary from country to country. Bitcoin surged in 2017 and touched a value of $20,000 before dropping. The EU has clearly stated that no country is allowed to introduce its own cryptocurrencies. Although owning cryptocurrency is legal, but the digital currency is still not recognized as a source of money that can be used for exchange or commerce purposes.

What is the BTC/EUR currency pair?

The Bitcoin (BTC) pairing with Euro (EUR) is given by ‘BTC/EUR’ where BTC is the base currency, while EUR is the counter or quote currency. The BTC/EUR pairing is one of the most recognized and popularly traded cryptos to fiat currency pairs globally.

The BTC/EUR represents the value of Bitcoin as compared to Euro. The BTC/EUR exchange accounts for nearly 5% of the Bitcoin transactions all across the world. The BTC/EUR pair shows the amount of Euro needed to buy one Bitcoin. The current exchange rate is 1 BTC = €8626.3

History of BTC/EUR

The trend of trading cryptocurrencies in EU member states is growing each year. Since its launch in 2009, Bitcoin is considered as the best digital currency based on value and market capitalization. The EU currency, on the other hand, called ‘Euro,’ is one of the significant and second most traded currencies across the world. The crypto market is known for its volatility, which may give tremendous opportunity for traders to speculate on the price difference and to have the possibility to potentially profit. .

Bitcoin began in 2008 as a whitepaper that gave details on the peer to peer electronic payment system. In 2009, Bitcoin was officially released as a digital payment system working on a blockchain technology where new information is made for a transaction, and two parties can make an exchange without any middleman or a third party (banks), hence the name ‘peer to peer.’ The first Bitcoin was used to buy pizza, and there are more than 18 million Bitcoins in circulation, and almost 80% of the Bitcoins are already mined.

In May 2010, one Bitcoin was approximately equal to $25, but in February 2011, 1 BTC was equal to $1. In April 2013, 1 BTC was equal to $250, and the progress continued, and in November, one Bitcoin was equal to $1200. The popularity of Bitcoin grew considerably, and it reached an all-time high value of $20,000 (€17,974) in 2017 before hovering around $8000 to $9000 by April 2018.

The Euro is the standard currency of 19 out of 27 member countries and the second most traded and valued currency after the US Dollar (USD). Euro was introduced on January 1, 1999, but officially banknotes and coins came into everyday use in 2002. Traders based in Europe are more interested in Bitcoin when it comes to cryptocurrencies as they are more familiar with Bitcoin as compared with other fiat and digital currencies.

How to analyze BTC/EUR Price Chart

The Bitcoin traders always benefit from the volatility of the cryptocurrency market and constant price swings. As a trader, you have the option to go Long or Short depending on the BTC rate against the EUR and benefit from the price difference to potentially profit if the market goes in your direction.

When we study the price chart of the BTC/EUR pair, we see that value remained within the range of €6000 to €9000 from the first week of January 2020 to the last week of February 2020. There was a sudden decline in March, and BTC/EUR pair fell to the lowest value of €4386.36 on March 16, 2020. The BTC/EUR pair is seeing uptrend since May 2020 with a few downturns, and the highest value of €10,386 was recorded on August 17, 2020.

Currently, BTC/EUR pair trades on €8626.3. The Bid price is €8626.8 while the Ask price is €8627.4.

If you believe that the value of BTC will rise as compared to EUR, then you open a long or Buy position, and similarly, when you speculate the price of BTC will fall against EUR, then you open a short or Sell position. Adding cryptocurrency such as Bitcoin can diversify a portfolio and particularly may help short term traders to try and take advantage of volatility and gain in a short period.

What causes price change in the BTC/EUR pair?

In the BTC/EUR pairing, one is a digital currency, and one is a paper currency, so different factors influence BTC and EUR separately.

The value of the Euro is directly impacted by both micro and macro-economic factors, which include the European Central Bank (ECB) policies, Interest rate, Inflation, GDP, Political situation, and growth forecasts. The Bitcoin, on the other hand, still operates under regulatory restrictions from the EU. The value of Bitcoin varies with a change in taxation policies within the member state.

For trading BTC/EUR pair, it is better to keep a close eye on not only the development of the crypto market but also the global political and economic events.

The information above is for education purposes only and cannot be considered as investment advice. Past performance is not reliable indicator of future results.