The basics of crypto trading
Today practically everyone has heard about Bitcoin. High liquidity, extensive demand, mind-blowing growth and lots of hopes tied to BTC – that’s what attracts even more investors.
Bitcoin is the most famous and demanded cryptocurrency in the world with the total capitalization exceeding $ 100 trillion. Cryptoinvestors, sceptics and even common people are keeping an eye on the Bitcoin’s exchange rate with interest. What can be expected from this cryptocurrency and how to make money with it?
The essence of Bitcoin consists in using of this decentralized currency by people without regard to the currency market, politics and economy in the fastest, easiest and most comprehensible way. All transactions are guided collectively through a network, and the system’s transparency allows any user to check a key’s validity. Interest in the coin is being promoted by the availability of only a limited amount of coins which appear gradually – namely 21 million. Moreover, it’s becoming even more difficult to mine them each year due to the decreasing emission. Also, a lack of backing adds volatility – it’s not clear what will happen to the currency in future.
The history of Bitcoin dates back to 2007: at that time Satoshi Nakamoto (there is no certainty whether it’s a real name or a pseudonym) started to develop a conception of Bitcoin. A year later he published a document containing the concept of work of the coin.
The first virtual coin was issued on January 9th, 2009. At that moment a version 0.1 BTC appeared which was supported only by a few Windows versions. In the same month, Satoshi Nakamoto mined the first 50 coins and conducted the first transaction.
In another 6 months the first exchange of the cryptocurrency for fiat money occurred: Martti Malmi got a little more than 5 dollars for 5 050 BTC. The price of the first Bitcoin didn’t even exceed $ 0,001.
Already in December of the same year a version 0.2 was released, and in 2010 – ver. 0.3. Generation of blocks started in a number of flows.
The first astonishing rise of the Bitcoin’s exchange rate took place in the summer of 2011. The most impressive increase was observed in March-December 2017 when 1 BTC cost nearly $ 20 thousand.
Users who trade Bitcoin actively or use it for long-term investments note the specific nature of the coin and cryptocurrency as a whole. The following can be considered as advantages for consumers:
Even professional investors recognize unlimited opportunities for Bitcoin’s growth. Moreover, people who have been working in IT-sphere for a long time also praise it.
There is also a significant number of negative reviews on the Internet. Someone consider Bitcoin to be some sort of an MLM pyramid, others presume that interest surrounding it is created artificially to blow a bubble and make money on common people and investors. The notable minuses are a lack of backing and high volatility.
The Bitcoin exchange rate is a little more than ₽ 431 340 or about $ 6 363. Only 5 years ago this value was nearly 40 times less. And initially, as many as 1 309 Bitcoins could be bought for one dollar!
The high popularity of the coin ensured an enormous growth of its exchange rate, the high liquidity of the currency and its introduction almost into every aspect of life. Today it’s not only possible to trade or exchange Bitcoins for traditional money but also to pay with them for purchases, goods on the Internet.
Despite its unique success, it’s hard to talk about the future of Bitcoin. Even opinions of the most well-known experts vary significantly. On the whole, two major theories can be extracted:
Any of the forecasts of the Bitcoin exchange rate provided above cannot be called reliable – too much depends on external factors.
Global popularity and record-breaking dynamics of growth of the cryptocurrency’s value in 2017 caused raising of questions how to earn Bitcoins and how they can be generally put to use.
Mining is a classical way to obtain Bitcoins and other coins. The point is to create special structures which ensure the functioning of the cryptocurrency platform. It’s difficult to make money with classical mining today. And, if only 8 years ago it was just enough to have a powerful computer in order to get Bitcoins, nowadays separate farms with specialized equipment which unite tens or hundreds of graphics cards simultaneously are required. It’s almost impossible for an average user to get a hold of such resources.
The classical format of mining is now being replaced by cloud mining. It allows avoiding expenses for the graphics card, their mounting and setting up special software – it’s only necessary to buy capacities of already installed equipment and start to make a profit. The resources themselves are located in data centres. This way of earning Bitcoins is easier, but it’s crucial to choose a supplier thoroughly in order not to be scammed.
People are accustomed to keeping regular money in a wallet, at home under a mattress, in a safe or in a bank deposit. Such variants aren’t available for Bitcoin and other digital currency. A lack of a physical form has caused emerging of a number of ways to store the digital money:
You should choose a way of storing according to your own preferences, aspects of working with Bitcoin, capabilities of available devices and a pace of your movements. The perfect choice is to use a number of formats simultaneously and not to keep all Bitcoins in one place.
BTC is a digital currency which doesn’t have a physical form. So users should know how to withdraw Bitcoins. A usual bank transfer won’t work as the money are stored in special wallets and are out of control of financial institutions. Owners of coins can use the following methods:
Platforms may charge their own fee for a withdrawal and place restrictions concerning amounts and daily limits.
Mining allows earning cryptocurrency. After obtaining it can be withdrawn in fiat money (or the currency can be bought for regular money), stored in an account in expectation of the growth of the exchange rate or shifted to active trading. Among the ways to earn via Bitcoin the most popular ones are:
Active trading is suitable for advanced users who understand processes which occur in the cryosphere. Novices should be very careful and aware while investing in this way.
Although Bitcoin lost another 8% on July 13th, naysayers expect a new rate jump. So what does make market analysts so optimistic, especially if we recall its 33% price change that led to its fall?
The most recent Bitcoin rate behavior was far from being satisfactory, and it is not necessary to be a market analyst to interpret the situation correctly. To date, the crypto asset has lost 32% of it’s 2019 highest rate mark of $13,739, and its short-term rate action doesn’t give good signs to Bitcoin owners.
Over the past weeks, BTC has formed a stable line between $13,739 and $13,177 before going down with its price to the mark of $9,600. Despite such a trend, most traders believe that BTC will restore its positions and will reach the Fibonacci Retracement level of 61.8%.
Regardless of the market conditions and trends, some analysts across the market are very optimistic about long-term price action of BTC, which is related to the Bitcoin wallet setting a new record, miner capitulation, and a pre-halving hype to push Bitcoin towards $20,000.
Bitcoin rate (Bitcoin, BTC) overcame the mark of $11 thousand and confidently rushes to $12 thousand for one digital coin. The largest cryptocurrency of the world began a rapid growth in the spring of 2019 after the disastrous year of 2018, when its decline was noted daily. According to CoinDesk.com, at the time of publication of the material, the BTC rate was at around $11.3 thousand - in one day the digital asset went up by more than $500 and this is the highest value since March 2018.
Despite the rapid increase in value, Bitcoin has not yet broken its record. In December 2017, at the peak of its popularity, it costs over $20 thousand, affecting not only the crypto market but also the segment of computer components. Bitcoin provoked an explosive growth in demand for video cards used for mining the digital coins, which led to a shortage and a sharp increase in their value around the world. Well-known crypto-analyst Oliver Isaacs in an interview with The Independent said that, according to his forecasts, by the end of 2019 or in early 2020, Bitcoin will set a new world record. In his opinion, by this period the cost of BTC could reach $25 thousand.