Bitcoin trading on forex
Bitcoin started its history in 2008, when a small group of programmers, or maybe just one person, as the information about the developers is still a secret, created an innovative technology for storing and transferring information. It is reflected, above all, in bitcoin as a method of payment. Although we now know that such developments are useful not only in financial transactions, but in many other areas as well.
Now bitcoin and numerous cryptocurrencies, which appeared later, attract attention, first of all, as a tool for generating fast income of dozens of percent within a few weeks. Judge for yourself, since May this year, bitcoin has almost quadrupled in value, moreover, the potential for further growth is still there.
While the pessimists see cryptocurrencies as a big "financial bubble" that is about to burst, the traders who bought in time are counting their profits.
Bitcoin: another bubble or a special financial markets asset?
If you look at the chart, you can indeed see signs of massive overbought in the daily TF, but we should not forget that bitcoin is rightfully considered a special asset. It has earned this status not only because many people call it the backbone of the financial system of the future, but because of a number of other factors.
1. The initial impetus for bitcoin's proliferation was the anonymity of payments. It is useful for those who are tired of the bureaucratic delays of the banking system and want to use settlement tools with lower fees.
2. The technology itself provides significant support for the growth of quotations, as according to it the finite number of coins is limited - no more than 21 million bitcoin units can be created.
3 Moreover, the complexity of obtaining new bitcoins is increasing day by day, meaning that more and more computing power is required to do the job. As a consequence, the supply decreases, which means that, as follows from the simplest laws of economics, the value of the cryptocurrency that has already appeared must increase.
4. Finally, perhaps the most important factor is the psychology of traders. When a particular financial asset starts to rise sharply in value, even the most conservative market participants tend to take advantage of the trading opportunity by starting to increase the volume of positions. Trading decisions become a result of emotions instead of analytical calculations, at the same time volatility starts going over the top.
That is, preconditions for further growth in cryptocurrencies remain in place, although a correction may occur at any time, as there will always be those willing to lock in profits and close part of their positions when historical highs are updated.
An additional growth driver could be interest from investment companies and hedge funds, which are not yet legally able to fully handle digital assets, but have a great desire to participate directly in these trends.