As cryptocurrencies become a household phrase, there are probably still many of you out there wondering what is Bitcoin? Bitcoin is the world’s largest cryptocurrency, which is essentially a digital currency or online cash. Bitcoin can be bought or sold, traded, or used to pay for items where it’s accepted. The concept of Bitcoin was first published in 2009 by an entity called Satoshi Nakamoto, which could be either a group or an individual—to this day nobody is sure. Bitcoin as a payment method requires a digital wallet and every transaction is processed and recorded in an online ledger known as a blockchain. Bitcoin works on the concept of decentralized finance (De-Fi), so nobody actually owns it, rather it is controlled by its users. Now that we’ve answered the question what is Bitcoin, let’s learn about virtual currencies a bit more and how to start trading bitcoin with iFOREX as CFDs.
Bitcoin’s unpredictable prices
One of Bitcoin’s most prominent characteristics is its volatility. For example, in April Bitcoin was worth over $65,000—an all-time high—however, by the 4th of July rolled around, it was only worth $47,257. As you start to learn about virtual currencies like Ethereum’s Ether and Ripple, you’ll see they can be just as volatile.
Like many other stocks, Bitcoin prices are influenced largely by supply and demand. American investor Michael Terpin explained by saying, “Every four years, the number of bitcoins that come onto the market – that are mined – halve. That means every four years, you end up all of a sudden having a much lower supply. And yet, demand is linear.” If the supply drops but the demand for Bitcoin remains the same, the price of Bitcoin will slowly start to rise. The king of crypto’s prices are also influenced by things like regulations around cryptocurrency mining, the support of high-profile celebrities like Elon Musk, which can cause huge changes to prices, and its market credibility, which tends to increase as it gains more institutional investment.
One recent issue that can affect Bitcoin prices going forward concerns crypto mining’s impact on the environment, as Bitcoin makes a bigger carbon footprint the more coins that are mined, which could impact Bitcoin prices going forward. Another factor which could have a reverse knock-on effect on Bitcoin prices this year is El Salvador’s recent decision to make Bitcoin legal tender. This could be a giant step towards solidifying cryptocurrencies’ place in the financial world and the global markets.
How does CFD crypto trading work?
If you’d like to dip your toes into the world of crypto trading as CFDs or Contracts For Difference, it’s advisable to learn more about virtual currencies first. Different coins trade at different prices and, while they often follow similar price trends, they each have unique factors that can influence their prices. And when it comes to trading bitcoin as CFDs, its volatility can present both opportunities and risks, as CFDs allow you to take advantage of price changes in both directions—increases as well as decreases—without having to purchase the underlying asset (in this case any actual Bitcoin) and without the use of an e-wallet.
Essentially, you’re trading on volatility. You can open “buy” deals if you think prices are going up, or “sell” deals if you think prices are going down. Trading cryptocurrencies like Bitcoin, Ethereum, Ripple, Litecoin, or any of the other popular crypto instruments as CFDs allows you to expand your portfolio into the exciting cryptocurrencies trading market.
Start trading bitcoin with iFOREX as CFDs
If you’re ready to enter the world of cryptocurrency, you can start trading Bitcoin with iFOREX as CFDs. iFOREX is a leading global broker with decades of market expertise and reliability. iFOREX offers you the opportunity to trade CFDs in not only Bitcoin, but many other cryptocurrencies as well, including Ethereum, Ripple and even Dogecoin. Before you start trading bitcoin with iFOREX as CFDs, take advantage of the brand’s signature educational resources package designed for traders of all experience levels. From how-to PDF guides to interactive video tutorials and even 1-on-1 training with a live trading coach, you can learn about virtual currencies and prepare for your CFD trading journey with a tailored educational experience.
iFOREX’s advanced trading platform is available in both desktop and mobile formats and gives you access to the world’s global markets where you can start trading bitcoin with iFOREX as CFDs as well as commodities, indices, shares of today’s top companies, foreign currency pairs and ETFs. And with the brand’s lineup of innovative trading tools and features, you’ll be able to make more informed trading decisions from the outset.