Are you thinking of entering the bitcoin market this year as a trader but wonder about the various opportunities and risks unique to 2022 and beyond? Anyone who plans to buy, sell, invest, trade, save, or otherwise speculate on crypto, particularly bitcoin (BTC), should be keenly aware of how current political events, economic trends, and other circumstances impact the alt-coin space.
Perhaps the best way to acquire a thorough understanding of BTC and other top alt-coins is to study the latest developments in the cryptocurrency markets, research the recent price activity of BTC, examine the many opportunities and risks, and learn what it takes for newcomers to succeed in one of the most exciting asset classes of all.
Latest Developments in Crypto Markets
For everyday investors, it’s becoming much easier to buy and sell digital currencies like bitcoin, Ethereum, and others. One reason is that the leading brokerage firms have begun offering alt-coin trading on their websites.
The expected future of BTC and the entire sector is bright. Several factors play into the long-term success of the asset, including rising acceptance by merchants, increasing use by consumers, government policies that have generally made it easier for citizens to acquire cryptocurrency, and the continued price rises of BTC amid a highly volatile global economy.
Learning how to trade bitcoin with AvaTrade is a straightforward process. The brokerage walks new account holders through each step. In under an hour, traders can be buying and selling the world’s most capitalized crypto in whatever manner they prefer.
The long-term future of alt-currency is extremely positive. Even with wide price swings, many investors have learned to catch short-term spikes for significant profits.
Bitcoin as Market Leader
When people speak about blockchain and financial markets, as well as digital money, they inevitably mention bitcoin almost as a synonym for the asset class. There are many reasons for that phenomenon. First, BTC is the most capitalized of all cryptocurrencies.
Currently nearing a total value of $1 trillion, the worth of all coins in existence far surpasses any other alt-coin. Another reason it’s leading the segment is its price history.
For starters, BTC has a longer history than any of its competitors. It was the first of its kind in 2009 and essentially spawned the growth of an entirely new form of money.
Not only is bitcoin easy to buy and sell, but consumers can also spend it, save it, store it, accumulate it in accounts, lock it into digital cold wallets, and stash it into retirement accounts for long-term growth potential.
As the only market leader the sector has ever had, bitcoin’s success has had a deep impact on the performance of hundreds of its competitors.
Opportunities
If you trade any alt-coin as a part-time or full-time endeavor, it’s critical to be aware of the opportunities within the asset class during the 2020s, which could turn out to be a golden age for cryptos.
In addition to virtually unlimited upside potential for the price, all current signs are pointing toward widespread acceptance within the next several years. Among consumers, traders, and investors, demand is growing.
One reason BTC’s capitalization total increases regularly is higher demand. All it takes to calculate capitalization is to multiply the price by the number of coins owned by all holders. Even amid huge swings in value, capitalization rises consistently.
There’s another factor behind rising demand. What investors call stacking is the simple accumulation of an asset, like gold or bitcoin, for the sole purpose of long-term appreciation.
They aren’t interested in short-term trends, financial news, or current events. They merely wish to acquire their preferred asset and stow it away for the future. It’s an old-fashioned way of doing things but can offer potentially massive payoffs for those who have the discipline to follow the method. One other component of demand is the recent trend toward staking.
Right now, BTC does not pay interest on staked assets, but it might do so in the near future. Ethereum and other coins do offer staking rewards, which are close to earning interest on the cash you put in a savings account.
Risks
Everything comes with risk, and digital currency is no different. Note that for many investors, the potential rewards of ownership clearly outweigh the risks. Otherwise, the asset would not be so popular. Risks include extreme price volatility, pyramid schemes, potentially strict government regulation, the loss of anonymity for users, and tax reporting requirements that could take a number of burdensome forms.
For New Traders
What are BTC’s pros and cons from the viewpoint of traders? Accounts are easy to set up, and the top brokerage firms allow multiple ways to own, trade, and invest cryptos. Account holders can buy alt-coins directly, acquire shares of crypto-backed funds, or use CFDs (contracts for difference) to speculate on price moves without owning the underlying asset.
Fortunately, brokers work hard to deal with some of the challenges that come with owning a digital asset. Because it’s not so easy to understand the technology behind alt-coins, most brokers offer extensive educational resources that include library access, trading simulators, and webinars.