When Bitcoin first emerged onto the market, many predicted its fall. However, despite a large number of people weighing in on the death of the Bitcoin, the digital currency has remained a strong investment and trading opportunity for countless around the world to this day. What’s more, others predicted that Bitcoin would hit $1 million before the end of the decade during the currencies peak value of $17 400 in 2017.
Just one year later in 2018, the currency experienced its worst year yet and the value plummeted, although, it wasn’t long before Bitcoin started climbing in value again. After some time, the uncertain volatility of the digital currency became known and many started to question whether or not the element of volatility could actually be benefited from.
If you are among the masses wondering how to benefit from the volatile value of Bitcoin and you would like to buy Bitcoin with debit card, Paypal, Skrill, or other platforms, here’s how you can use volatility to your advantage.
Bitcoin’s Volatility Explained
Before you start investing and spending in Bitcoin, you should know that the element of volatility should be accepted, as it definitely won’t be disappearing anytime soon. This is because there are several factors that result in the currencies unpredictable volatility, which include variances in popularity, real-life events, and global financial impacts to name merely a few. However, the main influencers that cause volatility include market immaturity, types of investors, and the lack of regulation.
When considering these influencing factors and the fact that Bitcoin can be traded at an impressive speed, simply watching the markets for long enough and identifying the most profitable time to sell is a plausible strategy that many beginner traders use to navigate the market. However, there are several advanced trading strategies that are also worth considering.
Using Volatility To Your Advantage
While volatility is definitely not a direct problem, budding investors and traders should be aware of it in order to use the element accordingly. Therefore, you should evaluate trading risks to develop a risk strategy. However, when it comes to using volatility to benefit, your strategy should include a method of waiting for the value to fall before buying in and monitoring markets to determine the most profitable time to sell. This may seem understandably more simple than what it really is, although, with time and adequate effort, you will be able to note certain value rise and decline trends, even if they are at certain times of the day or particular days of the week.
Before investing and trading, you should watch the market for some time and develop a specific strategy that you feel confident with. In addition to this, you should also research to gain clarity on each factor that affects the volatility of Bitcoin. In addition to this, you should also consider that the volatility of the digital currency may not be a never-ending element as certain influencing factors may eventually even out and no longer add to the volatility.