CFDs are a difficult product to understand, the CNMV considers that they are not suitable for retail investors due to their complexity and risk.
The bitcoin is a virtual currency that appeared a few years ago and which, like the other real currencies, has its own live quote on the money market. In order to take advantage of its high volatility, we suggest you to discover here how this currency quotes and, above all, how to trade with bitcoins in real time thanks to the different online speculation solutions.
Summary: What is bitcoin?
Bitcoins are a type of virtual currency that was introduced in 2009. This digital currency is today the first decentralized Peer to Peer payment network without any central authority. It is not governed by any particular banking system. In some cases you could compare bitcoins with digital cash.
On the Internet, bitcoins are often called BTC or XBT.
The number of bitcoins in circulation in the market is limited to 21 million units, but one of its peculiarities is that it can be affected by some events in the stock or commercial markets. It is therefore an extremely speculative asset.
People who wish to use bitcoins must have a digital wallet or pass through a foreign exchange market. Bitcoins are used to buy all kinds of things, products or services. As it is increasingly used, its overall trend remains upward in the long run.
Thus, in Canada or the United States we can find hundreds of bitcoin distribution points. We also note that more and more commercial or e-commerce sites are accepting bitcoins as payment currency on the Internet or physically.
Bitcoins can be exchanged between individuals, between professionals or individuals, on the Internet or even against real currencies such as the dollar or the euro, taking into account the exchange rate. This is why bitcoins can be traded, as they have become an asset in themselves with a share price that is experiencing bearish and bullish trends, but above all enjoys great volatility.
Many investors have already chosen to invest in bitcoins, speculating on the evolution of their quotes through CFDs or other trading instruments or financial investment products.
Who is bitcoin trading aimed at in real time?
Every investor, both private and professional, has the possibility to trade with the quote of the bitcoin live. This price is indeed quoted on the financial markets, just like other stocks, so it is possible to use online trading to take advantage of the very high volatility of this currency.
To do this, you simply need to access a CFD-type online trading platform through a simple pre-registration process. Ideally, of course, some basic knowledge of technical and fundamental analysis is needed to properly anticipate future movements of this asset.
How to trade the bitcoin live with a broker
As we have just explained, it is possible to trade bitcoins live from a broker’s online trading platform. If you choose a Forex broker, CFDs will allow you to take positions on the buying or selling of bitcoins and sell your position when your quote has reached a sufficiently interesting spread to make a profit.
Historical analysis of the bitcoin price
To help you better understand why bitcoin is an interesting asset to trade, you need to take an interest in the historical analysis of its price. In this sense, the stock market charts show several phases from the first quotation of the bitcóin in 2010.
In 2011, the price of bitcoin rose progressively to one dollar; later, from May 2011 to March 2013, a long, very volatile upward trend allowed it to reach $30 before falling back to $10 as a result of the bursting of the bubble.
Since this period, the bitcoin price has been rising steadily, which has led to good earnings prospects for investors who use online trading and are looking for a profitable value.
How bitcoins are issued and quoted
We might ask ourselves how bitcoins are issued, as they do not represent a physical currency and are not regulated by any banking authority, such as a central bank. In fact, the bitcoins are created by means of a computer program that has an innovative algorithm, which allows, among other things, limiting the amount of these payment units on the market. During its creation, the bitcoin was defined on the basis of a finished model of 21 million units in total.
However, the programme used to broadcast the bitcoins is programmed to mine them, on a regular basis and at a decreasing rate, respecting a particular cycle. Thus, from 2009 to 2013, the programme broadcast an additional 50 bitcoins every 10 minutes. Then, as of January 2013, the program will broadcast 25 bitcoins every 10 minutes. The number of bitcoins issued in the same period will therefore continue to decline over time. Bitcoin is experiencing increasing popularity worldwide today.
But what about the price of this virtual currency? Bitcoins are traded on the continuous market, i.e. 24 hours a day, 5 days a week (Monday to Friday). This price, like that of any market asset, is governed by the relationship between supply and demand and shows very high volatility. This is the reason why we have seen an increase in bitcoin prices on numerous occasions, such as in 2013, with a price of more than 1,000 dollars, i.e. more than one ounce of gold. Of course, since then he has lost some of his points, and has again passed the $1,000 mark in 2017.
Historical evolution of the bitcoin price in the market
Since its creation in 2009, bitcoin has seen its price fluctuate significantly and volatilly. It is interesting to note what the background trend has been for bitcoins over the last ten years, as the graphs show a real upward trend.
This is why many investors today consider bitcoin to be a preferred investment. This asset can be traded both in the short term due to its high volatility and in the long term due to its upward trend, which is clearly demonstrated by its track record.
To invest in bitcoins, you only need to enter the Internet, as many trading platforms offer them as an asset. It is thus possible to take positions for trading through both upward and downward CFDs. Thanks to CFDs, you can especially enjoy a leverage effect, as with any other currency.