Bitcoin trading

There are a few things that you'll find trading bitcoin that are not available in other markets.

Bitcoin Market Cap

Bitcoin’s market cap currently hovers around $6.5B. This number is calculated by multiplying the number of bitcoins in circulation and the current price of one bitcoin.

Although this gives us an idea of what trading strategies to use to trade bitcoin (the market cap is equivalent to that of a small stock), it is not of much importance to bitcoin’s utility. Bitcoin can be useful at any price.

This is important to keep in mind: bitcoin’s utility is not fundamentally connected to its price. Which means bitcoin is almost a purely speculative asset - a trader's paradise.

Bitcoin Price Volatility

Most of the time, bitcoin hits mainstream news because of its price volatility. The fact of the matter is that volatility is indeed high but it has been subsiding over time. This is normal as bitcoin grows and more players with big pockets enter the market.

Liquidity

Liquidity is determined by the amount of bitcoins available for purchase or sale at a specific price. In general, bitcoin is not a very liquid market relatively to forex or equities.

Manipulation

Big players can move bitcoin price in a given direction with relative ease. Dishonest and unregulated bitcoin brokers can move their price feeds in a direction that would allow them to pocket maximum retail trader losses.

The advantages of bitcoin trading

24/7: Contrarily to other markets, the bitcoin markets are always open. You can open and close trades at any time of day.
Global: Bitcoin is a global currency and so bitcoin can theoretically be traded from anywhere.
Volatility: The high volatility of the bitcoin markets means there opportunities to make or lose large sums of money quickly.
Leverage: Leveraged bitcoin trading amplifies your wins and losses.
Cheap: Bitcoin trading fees are very low or non-existent.
Uncorrelated: Bitcoin has not registered significant correlations with any other equity, currency, or commodity. It is a market of its own.