How easy is it to invest in Bitcoin on Forex?
The Bitcoin Cryptocurrency (Bitcoin Live Schedule) is based on specific methods of data protection and is used for fast and reliable payments and money transfers. In terms of financial markets, Bitcoin is identical to conventional currencies and can be seen as a tool for investment and trading speculation. As a result, the cryptocurrency is traded on specialized exchanges and is increasingly distributed on the Forex market. Bitcoin trading volumes in Japan alone reach $5 billion a year. This popularity is due to exceptional volatility and growth prospects. (Find out about Bitcoin prospects in the article “What will happen to Bitcoin in 2018?”)
Features of the market value of Bitcoin
Bitcoin is issued using blockchain technology and is not controlled or controlled by anyone, but is limited programmatically to 21 million coins. From the consumer’s point of view, this is a guarantee asset similar to gold, so in crisis situations, its price is increased by buying by long-term investors.
The first release of Bitcoins took place in 2009, and the Forex market of cryptocurrency appeared in 2013-14. The cost of Bitcoin on the Forex market is not secured by banks, governments or any financial structures that affect the liquidity of the currency. There’s no single center that can determine the cost of Bitcoin.
The price of a digital asset tends to decrease as a result of the loss of trust of users involved in a blockchain network. Such a situation may arise for reasons unrelated to the market situation or the state of the economy. These may include the actions of cryptocurrency developers, changes to encryption and transaction support programs, technical problems, government restrictions and bans. In addition, new cryptocurrencies are emerging that can be much more attractive to investors. It is unrealistic for Forex traders to calculate such factors by usual methods.
We must not forget about the systemic legal risk. Cryptocurrencies are not regulated as a financial instrument. Moreover, the European Parliament committee on monetary issues believes that EU countries should refrain from regulating digital currencies and blockchain-based financial settlements for the time being. This legal position of Bitcoin and other cryptocurrencies increases the risk of speculation compared to conventional financial instruments. (Find out more about blockchain in the article “What is Blockchain and why do you need it?”)
Reasons for changing the course of Bitcoin
Bitcoin is influenced by factors other than those that cause growth or decline in conventional currencies. What should be considered when trading Bitcoin on the Forex market?
News affecting the level of trust
Any negative information, announcements of state control or bans cause the price of Bitcoin to fall. Conversely, news of Bitcoin being recognized as a legal tender or of Bitcoin derivatives being traded on stock exchanges raises its price.
Developments in the cryptocurrency system are unpredictable. Hacker attacks, blockchain separation, transaction difficulties and similar technical problems can lead to mass sales and price collapse.
The influence of big players
Unlike the usual market, the volumes of trading in digital currencies are much smaller. Large transactions can have a significant impact on prices. Conversely, major players risk not finding buyers for their assets and incur losses.
Some governments and large industrial corporations consider Bitcoin and other cryptocurrencies a threat to the national financial system. Any attempts at prohibition or control cause speculative sales. New bills to support Bitcoin create demand and price increases for the cryptocurrency.
Quotes on cryptobearches
Exchange of cryptocurrencies for real money is provided by the cryptobirch. They are arranged in the same way as ordinary stock exchanges and currency exchanges, taking into account the peculiarities of digital assets. There are two types of exchanges – exchange and brokers. The price of Bitcoin is formed at these exchanges depending on demand and supply. The reliability of cryptocurrency exchange operations can affect the prices of digital currencies in cryptocurrency charts. Capitalization, i.e. the value of all issued coins in dollars, plays an important role in changing the price of Bitcoin. These data are constantly changing.
Read it too:
- «Cryptocurrencies with huge growth potential in 2018. Part one. Monero, Ripple and Dash.”
- «Cryptocurrencies with huge growth potential in 2018. Part two. NEO, Stellar Lumens, Zcash»
- «How easy is it to invest in Bitcoin on Forex?»
- «How easy is it to trade Crypto-currencies at Forex market?»
- «What happens to Bitcoin in 2018?“»
- «The future of IOTA: Why does Tangle beat Blockchain Iota’s forecasts for 2018»
- «How to Buy Bitcoin Online. ” Fast. | ” The best 5 ways to do it»
Bitcoin on the Forex market
Trading on cryptobearches is not available for small investors because of the high price of the minimum lot. Such traders pay attention to the Forex market. Here brokers most often offer trading in BTC/USD or BTC/EUR pairs with leverage from 1:3 to 1:20. One lot is 100 bitcoins, in 0.01 lot increments. Trading can be carried out with underlying assets or CFDs. (Learn more about Bitcoin trading on Forex in the article “How easy it is to trade with Crypto-currencies at Forex market?)
Bitcoin is traded 24 hours a day, 7 days a week, but most Forex brokers do not work at weekends. However, this feature should be taken into account in the technical analysis. Although the cryptocurrency has unpredictable volatility, simple technical analysis tools work in quiet periods. There may be gaps on the news, but they’re unpredictable.
Bitcoin trading with Forex brokers on small timeframes is unprofitable because of the big spread. Therefore, it is recommended to open positions for a few days in order to get a significant profit. There are other unfavorable conditions for traders, such as limitation of volumes and forced closure of transactions. But this is offset by the potential for high returns and the potential for digital currencies to hedge and diversify the investment portfolio.
Bitcoin trading at the company e-Toro
The eToro Forex broker provides its clients with the opportunity to trade in cryptocurrencies and copy such transactions of other traders. Leverage is not provided for and daily limits of trading volumes are set. Since September 2017, eToro’s traders, when opening positions to buy in the cryptocurrency, have become owners of Bitcoin, rather than the contract for difference, as it was before. Many traders wrote about it in Etoro’s reviews on our portal. Short positions are possible only in the form of CFDs through CFD brokers.
Interestingly, CFD contracts are regulated financial instruments and are therefore protected by applicable law. Bitcoin purchases are not covered by the UK and Cyprus Compensation Schemes. All trading in Bitcoin is subject to the Terms and Conditions published on the eToro website.
For easy investment in Bitcoin, eToro has created a fund for copying cryptocurrency transactions. eToro is a regulated broker, so investors don’t have to worry about the safety of their funds. The Crypto CopyFund is a diversified portfolio of assets with a capitalization of at least one billion dollars and a trading volume of 20 million dollars per day. At the moment, Bitcoin’s portfolio includes 67.66%, and the Fund’s profitability since the beginning of its operation has exceeded 50%. The average daily yield is about 1%. The opening of positions in the fund is limited by the daily limit. When the daily limit is reached, the fund closes for new investors and opens the next day.
At the end of the article, watch an interesting video about Bitcoin trading.