Monday, January 24

‘The future is crypto’ – Moneyweb


The cryptocurrency market has seen big rallies recently. And while there isn’t much you can count on in online trading, the volatility of cryptocurrencies is something that has been fairly consistent for the past two years. Bitcoin (BTC) has seen its biggest rally in recent months, as the ‘premium’ cryptocurrency broke the psychological milestone of reaching the $ 50,000 level in August. Just three months later (at the time of this writing), Bitcoin now sits at over 66,000. Similarly, rival cryptocurrencies like Ethereum and Ripple have also seen huge price increases to around $ 4,700 and $ 1. , 25 respectively.

It is worth mentioning that the cryptocurrency market, especially Bitcoin, posted disastrous all-time highs and lows in early 2021. However, despite its tumultuous performance, there remains a huge amount of wealth to be made with the total cryptocurrency market valued at more than 2 trillion dollars.

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Cryptocurrency trading in South Africa

South Africa has seen a rapid increase in the amount of crypto assets traded locally. In June 2021, the South African Treasury revealed that there are at least two million local retail investors in crypto, which is equivalent to $ 2 billion in transaction volumes.

Given the volatility history of cryptocurrencies, the current surge does not guarantee a long-term reversal. As a surge in prices spreads through the crypto market, many traders are asking, ‘Is now a good time to invest in crypto?’

What is driving the recent crypto rally?

Bitcoin, and indeed the entire crypto market, has proven to be an asset prone to large price movements based on rumors and events. PayPal recently announced that it would allow customers in Britain to use Bitcoin and other cryptocurrencies. This provides more legitimacy for the entire crypto market and ultimately starts a buying chain reaction, driving up the price of all digital currencies.

Is it worth investing in Bitcoin? What does it take to make a profit?

Bitcoin is like any asset. If you buy it and go up, you make a profit, and if it goes down, you lose money. The problem is the huge price movements seen in Bitcoin, often thousands of dollars. If the low is about $ 47,000 and the bullish high is $ 68,000, that’s a big move for most traders. However, it means that you need a lot of capital. That being said, we have seen daily moves from $ 5000 to even $ 10,000. This makes cryptocurrencies a great risk, although there are many people who make money.

Unfortunately, many people continue to lose large sums of money, because although they have correctly judged the direction of the price, they lose due to financing. For example, if you were to buy Bitcoin in early August, you would have bought it at $ 48,000 and it rose to a high of around $ 68,000. That’s good news, right? But if it goes back down to $ 47,000 (which is not impossible), it is an obvious loss. There are always big movements in the cryptocurrency market and it is something that people should be aware of.

How risky is crypto trading?

Personally, I prefer to trade currencies or indices because they are more stable. They don’t move in the huge amounts that cryptocurrencies do. But it is a very high risk and generates extremely high returns. Due to the size of a single Bitcoin, with a value currently approaching $ 67,000, it needs a lot of money just to be able to maintain a position in the cryptocurrency market.

Will we see widespread adoption of cryptocurrencies?

I think it is already happening. The future is without a doubt crypto. What remains to be seen is whether it is through Bitcoin or some other crypto asset. I don’t think there is any doubt that cryptocurrencies are the future.

We are seeing the adoption of cryptocurrencies by some of the largest financial companies in the world. It is clear that when you start, people believe in a snowball effect; if one starts, all other companies will start accepting crypto.

Anything to keep in mind when trading cryptocurrencies

Be very careful and accept the enormous volatility of the market. You need to be patient and understand that you may not have enough money to hold a position if the trend goes against you. It is a good market and the traders are making a lot of money. You need to have enough capital so that even when the market goes against you, you can maintain your position.

Daniel Kibel is a co-founder of CMTrading.


www.moneyweb.co.za

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