The cryptocurrency industry has taken quite the hit in the past few months, but it has managed to attract a lot of attention from investors and has gone from an obscure coin known only to tech enthusiasts to becoming a household word. Despite the fact that it has received more exposure over the past year, which can be mostly attributed to the massive price increase, many are still unsure as to what exactly Bitcoin is and whether or not there is any money to be made in trading it. To help you better understand the cryptocurrency and how it functions financially, here is a short guide that gives you an explanation of what Bitcoin is and if it is worth your time trading the asset.
What Is Bitcoin?
To put it simply, Bitcoin is a digital form of payment that allows for seamless, affordable, instant, global transactions. Through the use of blockchain technology, which is essentially a type of decentralized network that conducts transactions and keeps a public record of all the transactions that are made through the network, people are able to receive, send, purchase, and store Bitcoin. Bitcoin is easy to use, and the only thing you will need beyond a computer is some special software that allows you to properly hold and transfer your Bitcoin as you see fit. Besides these two vital tools, it works like any other type of payment platform. While Bitcoin is a form of payment and was designed as such; however, it is more often treated as an asset, which brings us to the most important question.
Can you make money trading Bitcoin?
It’s important to ask whether any asset is profitable before you jump into the market, and this is especially true of an asset such as Bitcoin becasue of its high volatility and reputation for having disreputable exchanges or exchanges that are often the target of criminal hacking operations. So, can you make money trading Bitcoin? The short answer is yes. Even in the year 2018, it is still believed that many of the problems that face the cryptocurrency still play into the ability of traders to make money. For example, the overall volatility in the cryptocurrency market (because of a lack of inherent value, a lot of hype from both users and investors, and illiquidity in the crypto market as a whole) is said to actually help traders make real profit off of the digital currency rather than losing money as most have expected to when they started trading the asset. If you’re looking to get into Bitcoin trading, the good news is that there is still money to be made.
While you can still make money in this market, it is important that you do not enter it blindly and expect to make a profit. The crypto market may be similar to Forex, but it operates differently and requires much more attention to detail and the willingness to change strategy and move funds at a moment’s notice. Whether you plan on investing and holding onto your crypto assets in the long term or you plan on day trading bitcoin and intend on trying to make a profit on a regular basis, make sure to implement the right strategy, study the market heavily, and prepare yourself for any and all potential issues that may arise in the crypto market. Once you are sure that you have what it takes to invest in Bitcoin, move forward with caution and only invest what you are willing to lose. Good luck!