If you are a trader one of the newest terms that you have learn about is the “Bitcoin or BTC.” A year ago, the concept was already introduced but it was not quite popular and interesting. But today, it has become a popular topic especially in the stock exchange market. You might consider its existence quite interesting but what might shock you is that it its value has been increasing. In January 2013 it was just 13 dollars per BTC. On April of the same year it rose to 190 dollars per BTC and then even more to over a thousand. Your first reaction to this sudden increase might be how is that even possible but then you will ask yourself, how can I earn from that interesting fluctuation? Before we dig deeper and answer this question we must first understand what a Bitcoin really is.
BITCOIN: WHAT IS IT?
Digital currency – that is what a Bitcoin is. In a clearer sense, it is money. However, it is not like any tradition currency because you can only have it when you are online. That’s right – it e=only exists in the virtual world and you can never find it in paper or metal form. Some vendors nowadays are already offering coins and notes in BTC. But this is just an option and not a rule. It is like money that you earn from video games or virtual games. The only difference is that you can buy real stuff using BTC.
WHO INVENTED THE BITCOIN?
Satoshi Nakamoto created the Bitcoin in 2008. However, others believe that he is not really who he says he is because in 2010 he has vanished from the virtual world. Nevertheless, his creation has stunned the virtual community and it has now become a marketable item. Unlike conventional currency, BTC is not being issued by a central authority. As an alternative, in order to produce Bitcoins there is a network that is being program to reach over 21 million of it. When it has reached its production limit, computers called bitcoin miners generate around 24 BTC in every 10 minutes. Thus, by 2017 this can be divided in two and then amount produced shall gradually decrease until the 21 million BTC target can be achieved by 2140. Yes, it is a very long time!
Now that you know a little about bitcoins let’s go back to the first paragraph. Remember the above mentioned fact that there was a sudden increase of the Bitcoin’s value? This big jump was greatly influenced by the crisis that happened in Cyprus and the “strange” decision of getting people’s savings. Of course, this action surely brings mistrust to the banking system. And mistrust was the reason why Bitcoins came in to the spotlight. People paid attention to it because people started seeing it as a probable investment. They also realized that it can be a great method of preserving savings.
The trading industry, especially Binary trading is fast advancing. Through the years you may observe that brokers both new and amateurs are taking bigger leaps towards transforming themselves to real business leaders. Because of these regulations are requested by numerous traders. Brokers want to be regulated. When traders become regulated then they can be in a much safer environment. Of course, regulation is ideal but it is not the sole element that the industry needs for progress. As it constantly improves, new ideas are generated. On step is the introduction of the BTC as n asset. As of the moment, only a single broker (based in the UK) has been offering binary options on BTC asset.
WHY IS BTC BAD FOR BINARY OPTIONS TRADING?
As mentioned before, BTC trading is bad because of volatility. A number of traders may consider this a positive thing because as a matter of fact volatility can move prices and when this happens money can be made. However, this can only be considered a trend and even a strong trend can soon break down. Because it lacks liquidity and cannot be traded normally then it actually is bad.
WHY IS BTC GOOD FOR BINARY OPTIONS TRADING?
If you are a risk taker then this is great for you! Many traders actually consider the Bitcoin as a hot asset which it really is at current moment.