Bitcoin has emerged as a formidable force in the financial market. Last year’s coronavirus pandemic has brought an immense spotlight to this cryptocurrency. Its emerging popularity has prompted many companies to start accepting it as a proper currency.
Tesla announced this February that they are mulling over accepting bitcoin payments for their vehicles. Even its chief, Elon Musk, has voted for bitcoin repeatedly. And Tesla isn’t the sole player here.
Big conglomerates and corporations such as Microsoft, Home Depot, Etsy, Starbucks, Twitch, KFC-backer Yum brands, PayPal, Namecheap, Whole Foods, have agreed to break the status quo and start welcoming the decentralized digital currency. This strong foothold has given markets the confidence to indulge in crypto trading.
Let’s first know about bitcoins
Before going any further, let’s learn about the basics. What is bitcoin and how did it become such a favorite for entrepreneurs like Musk or even Bill Gates.
For starters, it’s a digital asset or currency and has no central bank or single administrator. Though the real value of bitcoins is highly volatile, it is still preferred because of certain reasons:
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- Ideologies such as anarchism, decentralization and libertarianism
- For the sake of convenience
- For investing in currency
- The privacy of the transactions.
The growing importance of bitcoins
Many analysts are of the opinion that bitcoins are here to stay and this widespread acceptance will have ramifications for the upcoming decade.
The main reason for it being able to touch new heights is probably because it has the strong support of many major companies and investors.
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To recall, it was earlier slammed for being illegal, but nowadays, bitcoins are gaining prominence in the business world. Many are indulging in crypto trading or buying bitcoins worth millions.
Noted rapper Jay-Z and Twitter founder-CEO Jack Dorsey have bought 500 Bitcoins to create a Bitcoin Development fund, which will be a “blind irrevocable trust” keeping in mind Africa and India. Even Musk’s Tesla invested $1.5 billion in bitcoin. All these are pushing its prices north and upwards, solidifying its reputation.
Bitcoin and currency trading
As mentioned earlier, the popularity and increasing legitimacy of bitcoins has given traders the confidence to rope in bitcoins in currency trading. In recent times, many forex traders are going for crypto trading and have also started accepting bitcoins.
So if you want to engage in forex trade with bitcoins, you must keep certain things in mind:
- Look for a broker who accepts bitcoins and open a forex account
- From your digital wallet, transfer 2 bitcoins to the broker’s
- Choose a forex brokerage that is locally regulated
- Till the time you are aware of what you are doing, do not use leverage
So now what is crypto trading?
As the name suggests, crypto trading is the investing and buy-n-sell of cryptocurrencies. Do note that bitcoin is not the sole cryptocurrency in the market. There are others such as Ethereum, XRP and Tether. But since bitcoin is the original one, it is the most famous, trustworthy and significant.
Crypto trading may be scary at first because people have lost a lot of money via scams or otherwise. Also, it is highly unstable in comparison with any other traditional currency. But if you want to indulge in crypto trading, the time is now.
Leaving doubts aside, crypto trading has its benefits as well:
Volatility: It may sound like a disadvantage. But, experts mark out that it is this factor that makes trading in cryptocurrencies so much more exciting. Yes, you can suffer losses, but the profit earning can be huge as well. But, do good research before diving.
Market hours: Since this has no central bank or administrator controlling it, the crypto trading market is open all the time, the entire week and for 24 hours.
Deposit amount: You can start with as low as $25, but make sure the broker is registered.
Safety and security: There is no need for you to reveal your card details or even the tidbits of your bank account. So this is a big bonus in terms of financial security.
The way ahead for cryptocurrencies
In some countries, bitcoin-type currency comes as a saving grace and a messiah. Venezuela, for example, is reeling under economic downfall, with its domestic currency witnessing a sharp decline. In that case, it’s considered as a protection against rising prices and inflation.
However, experts are also of the opinion that a crash in cryptocurrencies may have a severe impact on the market. This can spark a massive financial crisis across the world. However, it needs to be noted that the size of the market is still not that huge to spark the systematic risk.
So, investors think cryptocurrencies are a hedge against inflation or a medium for speculation. But the market capitalization of all the digital currencies is much less than companies. So, the world is still not at that much risk.