Tuesday July 5, 2016 - 17:55:05 GMT
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3 reasons that make BTC a great asset for day trading
Many of the traders have heard about bitcoins. While this crypto currency has been invented for anonymous payments on the Internet, within just a few years bitcoin has grown into something huge. Current market cap of it is around 10 trillion US dollars, which is around a half of all of the companies listed at NYSE. Yes, bitcoin trading is actually more than you could think. However, next to the daily volumes, there are three main reasons that make this crypto currency an interesting choice for the day traders. Let’s take a look.
Well, unlike most of the other currencies, bitcoins are decentralised. This means that there is no governing body that can issue more bitcoins or remove some of them from the market just because it wants to do so. The supply of bitcoins is constantly increasing, however this is planned and can be easily “included” in the price forecast. Everyone can easily find out when daily supply of bitcoins is going to shrink.
Unlike gambling with bitcoins, which is mostly used for entertainment, day trading of bitcoin requires quite some certainty in the macroeconomic data. This is where BTC comes handy as it comes with a transparent data regarding the traded volumes, tightening of bitcoin mining and so on.
Having said this, BTC is still traded against USD, EUR or any other currency. Hence, you should still keep an eye on the fundamental data when trading bitcoins, although there is twice as less things to keep an eye on when compared to EUR/USD or any other FX pair.
Day traders love volatility. If there is no volatility, it is just impossible to make any profit on the market. With bitcoin trading it is possible to see the price increasing and decreasing for dozens of percent within just a day. While this can certainly be seen as a risky investment, it is a great advantage for the day traders.
Also, this volatility can be a great potential for trading robots. While it is certainly possible to snap a few cents when trading FX currency pairs or stocks, the spread of BTC tends to be low, while the the possible gains made just out of tiny fluctuations can be measured in dollars.
Unlike various stock and currency brokers, bitcoin trading is served by the various exchanges. It is not possible to get regulated as a bitcoin exchange, hence there is no licensing involved whatsoever. While currency traders from the US have to deal with much worse conditions than their European rivals, with bitcoins everyone can get the same set of conditions, instruments and so on.
As a bitcoin day trader you can choose amongst dozens of various exchanges, some of which does not even require you to go through any KYC procedures. Because of this it is possible to say that bitcoin makes day trading accessible for everyone.
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