Will Bitcoin Explode Again?

Bitcoin's price is bouncing in all directions again. It is difficult to open a new trading account and it is always a matter of waiting to see if an order will actually be executed.

Is bitcoin on the eve of a new price spurt? In about 1 week, traders from the major American investment banks will receive their bonus for the stock market year 2017. Several bitcoin gurus predict that a large part of that money will find its way into virtual currencies.

Whether it actually comes to that remains to be seen. Experience shows that high bonuses are especially good news for sellers of luxury goods, such as sports cars. For the time being, the price of bitcoin is mainly a plaything of all kinds of events, such as the Chinese approach to bitcoin mining companies and the new regulations in South Korea.

making bitcoins
New bitcoins are created by people and companies running a program on their computer. With that program, the trade in the currency is managed in the right direction, among other things. In fact, parties exchange computer power for a very small amount of bitcoin. In China, however, bitcoin is so popular that electricity supplies are falling short in some cities. As a result, the country has been unfolding plans to severely restrict bitcoin production.

Before traders could fully absorb the news, the news broke that South Korea is adjusting its virtual currency regulations. The country wants to ban anonymous accounts and allow regulators to close trading platforms. The prospect that it is likely to become more difficult to trade these currencies there has led to a price drop of more than 10% in recent days.

Very popular
The large price fluctuations play a role in the popularity of bitcoin. If you are a little lucky, you will achieve a return within a few days that is much, much higher than the current savings rate of 0,1%. However, there are some major drawbacks to trading. Most people choose to trade the currency through a digital wallet. With that, it is only possible to choose a position for a further rise by buying bitcoins. Moreover, you often have to wait and see whether your order is actually executed.

Real Currency Trading
If you like to earn some money through currency trading, it is better to opt for regular currencies. There is so much trade in it that you know very quickly whether a transaction has been carried out and at what price. It is also a lot easier to choose position for price drops of a certain currency.

It is common practice to trade currencies using leverage. An increase in the euro from $1,20 to $1,21 can yield the same return as if a bitcoin went from $14.000 to $15.000. Finally, it is of course very nice to tell in the cafe that you have made a lot of money on the yen, while your drinkers all saw the value of their bitcoins fall from almost $20.000 to less than $15.000.

Lawrence Martins

Laurens Maartens is a currency expert at the Dutch Payment and Exchange Company (NBWM). Maartens analyzes current currency developments and also provides lectures and training in the field of currency management.

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