Bitcoin, as «digital gold», is a rather interesting trading asset; it has its own characteristics of high liquidity and volatility. Surely the majority of Internet users have already heard about it, and even more so about its rapid growth in price, which rises literally by the hour. Traders are also interested in such a digital product, ordinary investors buy it, transactions in the financial market take place with the help of bitcoin.
The first cryptocurrency was created in 2009 by Satoshi Nakamoto under the name Bitcoin. The main difference from traditional currencies (EUR, USD, GBP and others) is that Bitcoin is completely confidential, secure and all transactions are decentralized. Hence, the value of Bitcoin is not determined by the political decisions of central banks such as the US Federal Reserve, the European Central Bank or the Bank of England, etc. In any CFDs trading platforms, Bitcoin is referred to as BTC. Now many Forex brokers offer it as a trading asset. Bitcoin is the most volatile and popular of all cryptocurrencies, because the rest have followed on its basis. In addition, all traders who trade CFDs on cryptocurrencies usually rely on Bitcoin.
Like any other investment products and foreign exchange trading, Bitcoin is an unpredictable asset. Here you can make both profit and loss, depending on how you forecast the price. The market price of bitcoin depends on supply and demand, which is why traders believe in this asset and trade actively. Bitcoin can be predicted using technical analysis figures, making your trading more profitable. It is best to trade in the long-term mode, when the bitcoin correction is completed.
How Bitcoin System Works
Bitcoin can be considered, neither as something physical, any object, namely, as a program, or an application that has a special electronic wallet for storing electronic currency. Bitcoin wallet, like any electronic wallet, has standard functions, that is, it is designed to store, receive and transfer electronic money. Bitcoin wallet number is a whole code with many numbers and letters. To replenish it or transfer funds, it is enough to indicate this long number in the transaction. This is how it all looks at first glance, but in reality everything is much more complicated.
To confirm each transaction, all records are held in the blockchain, which is a kind of electronic ledger. All information on a financial transaction is recorded there: date, time, amount and other parameters, and each record is protected by a special digital signature. Bitcoin transactions are completely transparent, that is, any user can see the information, but it is simply impossible to change anything in it.
For example, consider a medical record. Anyone can see all the records that are made in it, but only the doctor himself who has access to it can add something. Similarly, in the blockchain, everyone sees transactions, they are open and available for viewing, but only the owner has a special access key and no one else can change anything.
Main Benefits of Bitcoin CFDs
With the development and increase in the volume of online trading, as well as with the increase in the turnover of the financial market itself, its price has increased significantly. The first Bitcoin cost literally a penny, but today its price has risen to a thousand dollars. Bitcoin CFD trades just like any other asset, you buy at a lower price and sell at a higher price. Therefore, you do not need to store bitcoins in cryptocurrency wallets and worry about someone hacking into your account and stealing them. When you trade Bitcoin, you are not buying the cryptocurrency itself, but simply speculating on the price. Another major advantage of CFDs is that you can use margin. Using margin trading, you can open a much larger position with leverage than you have the deposit itself.
It is advisable to start trading on the hourly chart, in accordance with the trend movement of the market, while it is advisable to use support and resistance lines and various technical indicators that help establish the direction of the trend. You can trade breakout strategies, they are quite effective. For all beginners, it is recommended to start trading cryptocurrency on a demo account, since this asset is quite specific and has many different features.