Bitcoin is a household name. It refers to a digital currency, which doesn’t work the same way as traditional money. Bitcoin doesn’t have a physical form, it is decentralized, and only exists as encrypted financial transactions in ledgers that are copied across thousands of computers online.
Globally, money is always controlled by a central authority, which makes financial systems vulnerable to unauthorized people and manipulation. However, Bitcoin doesn’t work that way. It was designed to make financial transactions transparent. Given that Bitcoin doesn’t get any direct interference from the government, and its decentralized nature, its users are not worried about interest rates, exchange rates, or any hidden fees.
Blockchain is the technology behind all cryptocurrency transactions. It ensures that these transactions remain safe and secure. Blockchain is a decentralized computer network whose responsibility is to keep records of a sequence of transactions and at the same time make a chain of records that are transparent to each user in the network.
Every time a new transaction gets recorded, a copy of the block of data gets added to the chain. It is also updated on all the computers on that network. So, although blockchain technology is not controlled by the government, or any governing authority, its transparency makes it possible to see if there is anyone who was trying to tamper with the record or transaction.
Cryptocurrency trading involves speculating on the price movement of specific cryptocurrencies against fiat currency or other cryptocurrencies through crypto-to-crypto pairs.
Traders can take a long or short position and use leverage to increase their buying power. While there are various methods of trading cryptocurrencies, some popular ones include spot trading and futures trading. These trading methods provide greater flexibility for traders to participate in the cryptocurrency market.
Since Bitcoin was developed over a decade ago, cryptocurrency trading has continued to experience immense popularity. Cryptocurrencies refer to digital coins created through blockchain or cryptographic peer-to-peer technology. The difference between cryptocurrencies and fiat currencies is that the latter is tangible and issued by governments worldwide. However, cryptocurrencies are not tangible since they are comprised of bits and bytes of data.
Also, cryptocurrencies don’t come with a central authority or body that issues and regulates their circulation. Since cryptocurrencies are not issued or distributed by governments, they are not taken as legal tender.
Although cryptocurrencies are not considered legal tender globally, they have the potential to change the financial industry, which makes them difficult to ignore. Also, blockchain technology, which is the foundation of cryptocurrency creation has brought about new investment chances, and traders are capitalizing on that.
Once demand exceeds supply the prices go up. Bitcoin has a supply cap of 21 million coins. Various governing teams specify their whole cryptocurrency supply, and so, they can decide when to release more tokens to the public. Consequently, they hold the power to hold them back to control the money supply.
Some cryptocurrencies have the means to send the existing tokens to unrecoverable addresses on the blockchain. The idea is to keep the circulating supply at a certain level so that it doesn’t grow too big. Demand also increases if a currency gains more awareness or its utility goes up, especially when people start treating it as an investment.
Most cryptocurrency exchanges list mainstream cryptocurrencies and the most popular tokens, including Bitcoin. That means that smaller tokens might only be listed on a few exchanges limiting its access. Whenever some crypto storage providers accumulate quotes to interchange a set of cryptocurrencies on various exchanges, they charge a fee to do so. Consequently, that takes the investment cost high.
Also, in case a cryptocurrency is only thinly traded on a small exchange, it means that the exchange may be taking a large amount from traders. Once a cryptocurrency gets listed on multiple exchanges, it can bring the number of those willing to buy it high, which could also increase its demand. If the demand goes up, the price increases too.
The process of producing new cryptocurrency tokens is referred to as mining. Cryptocurrency miners need to use a computer to verify the next blocks on the blockchain. As the competition to mine a specific cryptocurrency increases, it becomes harder to mine since miners are constantly in a race to solve a complex math problem to verify a block.
This increases the mining cost since the team requires more powerful computers for a successful mining process. If the mining costs go up, the value of cryptocurrency also increases. No miner will try to mine cryptocurrency if the value of the cryptocurrency they are mining will not offset its cost. That means that the price of the cryptocurrency will keep rising provided there is a demand to use blockchain.
Cryptocurrency governance doesn’t follow a fixed set of rules. Instead, these rules are dictated by the developers, and they base them on the community they serve. Some developers allow their holders to contribute to the decision-making process regarding how a token is used and mined. There is a need for consensus among stakeholders when it comes to hanging the token’s governance.
Willing buyers are always looking for stable governance since it also means stable pricing. However, the slow process of updating software for improved protocols can lower crypto’s value. Even if an update is likely to unlock the value for cryptocurrency holders but takes a long time, it may hurt stakeholders.
With over 13,000 distinct types of cryptocurrencies, and more getting launched constantly, competition is likely to keep rising. Although it is easy to keep launching more cryptocurrencies, making them viable is another task since they need to build a network of interested users.
If people can find a useful application for a certain currency on the blockchain, it is easy for them to build a network, especially if it promises to improve a competitor’s limitation and succeeds. Whenever a new competitor gets momentum, it minimizes the value of the competitor, which drives its value down while raising the value of the new cryptocurrency.
Social media plays a big role in determining the value of cryptocurrencies. Any hype from social media or influential people on it can determine whether the piece will go up or down. Although cryptocurrency exchanges offer information on a currency or blockchain, it is prudent to check any details that might come from other sources such as social media. That is because they don’t need to be accurate to affect the volatility of cryptocurrency.
For those who wish to expand their investment portfolios by venturing into Bitcoin trading, here is a guide on how Bitcoin differs from traditional assets.
Gold has maintained its value over time, and many people use it to cushion against market turndowns. Although Bitcoin is a newer investment asset compared to gold, many people opt to choose crypto to safeguard against corrections and recession.
Gold is among the list of rarest metals. However, Bitcoin is also considered rare in the cryptocurrencies category since its supply limit is capped at 21 million coins. While gold and Bitcoin have some similarities, one cannot deny that crypto has out won gold when it comes to the return on investment.
The most powerful stock exchange globally is the New York State Exchange. Formally founded in 1792, NYSE was formally constituted as the NYSE Board in 1817. Since its inception, it has made many people prosper financially. However, the fast appreciation of Bitcoin has many people considering shifting their investment portfolios to the crypto world.
Stocks are a fraction of a business ownership interest. Those who hold some shares in a company share in its capital or partly own it. The success of a company determines the rise in stock prices over time. Therefore, for one to benefit from a stock investment, the company needs to succeed over time.
Although stocks are backed by cash flow and the company’s assets, Bitcoin is not supported or dependent on hard assets. Whenever Bitcoin prices move, it is a result of speculation brought by market sentiments. Whenever the sentiments change, the price shifts, which can be drastic.
In a nutshell, Bitcoin is driven by the hope that a person will want to buy it at a higher price in the future. To consider Bitcoin a successful investment, the owner needs to find someone to purchase it for a higher price than they paid. Stocks are known to offer solid returns, they are accessible, have intrinsic value, and come with stronger regulations compared to Bitcoin. However, although Bitcoin is volatile, it has the potential to offer high rewards. For years, Bitcoin has been outperforming many tech stocks. Bitcoin is secure and straightforward.
Although real estate doesn’t offer the same high returns as stocks, it is also considered a tangible asset that comes with intrinsic value. Besides the high capital costs and required maintenance, real estate offers people great investment chances. Also, it is a regulated asset that offers long-term returns.
On the other hand, Bitcoin costs much less to invest in compared to real estate. Also, it doesn’t come with regular maintenance needs. In the past five years, those who invested in Bitcoin got higher returns than their real estate investment counterparts.
Immediate Apex is a Bitcoin Trading platform that is designed with the traders’ convenience in mind. It provides an opportunity even for those who have never heard about crypto trading to understand the concept and get comfortable and confident enough to try it.
Convenience comes in the form of how accessible this platform is. Anyone can access it without having to invest in any capital. All they need to do is create an account. The platform provides traders with learning materials that range from webinars to instructional videos and a comprehensive FAQs section to a partnered broker who is always ready to answer any questions a trader might have. With a small first deposit, they can start trading if they wish.
With so many trading platforms out there, one might ask why to settle for this one. Firstly, this platform is free to use for anyone. Also, it offers traders the chance to start trading on a demo account to sharpen their trading strategies and learn how the platform works.
The platform also offers traders a high level of security through encryption technologies to ensure that their information is stored securely. The platform is easy to use even for beginners since it is not cluttered with numerous menus.
The spread refers to the difference between the Ask price and the bid of a certain cryptocurrency. The Ask price is mostly higher than the bid price. The spread changes depending on the amount of the market’s volatility and liquidity. It is, therefore, prudent to check the latest prices before one commit to a trade.
Similar to gold mining, cryptocurrency mining refers to a way of extracting money from a sparingly free resource. However, the process of cryptocurrency mining is technologically complex. It is a way of creating a new cryptocurrency unit and putting it in circulation.
The process involves applying huge computing resources to solve complicated mathematical equations. Miners assume the role of de facto auditor and keep verifying blocks of crypto transactions, ensuring that the same unit of cryptocurrency doesn’t get used twice. Miners get paid through the creation of a new unit of the cryptocurrency as a way of thanking them for ensuring the validity of the cryptocurrency.
No. Contrary to regular markets, cryptocurrency trading markets remain open 24/7. The only aspect that traders need to consider is the price movements since cryptocurrency prices can drop or rise drastically.
A demo account allows traders to trade with virtual/ ‘fake’ money offered by a trading platform. It allows traders to have a feel of live trading while not in such an environment. Using a demo account allows a trader to learn how the platform works and polish their trading strategies before they can decide whether they want to risk with live trading.