Take advantage of the volatile cryptocurrency prices
If there’s one main criticism levelled at Bitcoin of late, it is that it is too volatile. Prices of cryptocurrencies have changed dramatically over a short time, and this makes some investors nervous. But, there are ways to take advantage of the volatile cryptocurrency prices.
The data shows that cryptocurrencies have had a turbulent year. Let’s look at Bitcoin, as an example. In March last year, it was priced at $1,172, and this saw a steady increase throughout the year until it started to climb in November. By December 17th, it had hit the heady heights of $19,343, but it didn’t stay there for long. Within three days, it was down to $13,857, and by early February, the price was $6,941. At the time of writing, it has since bounced back and is currently sat at $8,196.
Ethereum, another well-known cryptocurrency, has had an equally interesting year. It started at just $31.39 in March 2017 but had reached $1,244 by early January 2018. It has since fallen like Bitcoin and is currently sitting at $609.99.
Is volatility good?
But, can this be a good thing? For starters, one of the main reasons people want to take advantage of the Bitcoin price, is to increase their holdings. These are people who have earned Bitcoins, or who have bought them at a low price, and wanted to enhance their portfolio. More coins mean more profit, when the price does increase again.
As the price is increasingly volatile, there can be opportunities to sell at a high price and buy back when the value decreases. Centralised exchange platforms can be used for this, and even peer to peer trading. The hardest part is predicting when the price will become volatile again.
CFD trading with Bitcoin
It can be easy to capitalise on rising, or falling prices, in Bitcoin by using it for CFD trading. A CFD (Contract for Difference) trade is an agreement between you, and a broker, to pay the difference between an opening and closing price of an asset. It might sound more complicated than usual trading, but it isn’t. Not all brokers, however, will trade with cryptocurrencies.
Due to Bitcoin and other cryptocurrencies being so volatile, they cannot yet qualify as currencies or media of exchange. But, they can work for CFDs if the platform will accept them. Examples of such trades include the Ethereum/US Dollar pairing.
It is normal to find a cryptocurrency paired with the US Dollar or less often against the Euro or the British Pound. Margin requirements are still quite high, but they present an advantage for experienced traders, making money from the rise and fall of the cryptocurrency.
Make the most of the volatility
CFD trading with cryptocurrencies, such as Bitcoin, can be a quick and seamless process. It removes the length verification process that is associated with other trades, and the deposits and withdrawals are almost instant.
It is one of those situations where the volatility of Bitcoin can be a blessing. And, it is also easy to forget that all asset classes are subject to rapid changes. Fiat currencies, stocks, digital assets – all of these can see sudden changes in their price or value. Bitcoin is still new, and not everyone is brave enough to change trying it.
If you do want to try CFD trading, with Bitcoin or other cryptocurrencies, you can do so on Olsson Capital. It will give you reassurance of using an established and reputable platform for your trades, and you can seek advice as you go. Join the cryptocurrency revolution and go with those waves of volatility today.