It was virtually a decade
ago when a mysterious programmer changed the world
with his new invention: Bitcoin, the first ever
crypto currency. Nothing has been the same again.
BItcoin made history by becoming the first
decentralized digital currency in the world that has
buying and selling powers. All of the sudden a new
way of making transactions has opened up to the
world of investors and innovators. Soon enough,
other crypto currencies entered the scene of digital
currencies such as Ethereum, Litecoin and Dash.
These days the value of Bitcoin exceeds $41 billion
dollars, opening a thriving market for exchanges and
Crypto currencies brought with them new opportunities for acquiring wealth and making a fortune. The teeming crypto currencies exchange market has also opened up new venues for making money out of digital currencies without having to participate in the exchange itself.
The same way online traders predict the movements of traditional currencies, they are also able to predict the movements of digital currencies. Taking a position on the value of digital currency is as easy as taking a position on traditional currencies. However, taking positions on digital currencies is different from taking a position on traditional currencies:
Traditional currencies are open for trading only during weekdays. During the weekend, there's no trade and it's impossible to take a position on currencies. Digital currencies are offered for trading around the clock, seven days a week. There is no doubt that transitioning into a day trader is much easier when the weekend is available for traders to train in online trading.
Central banks control the amount and value of
traditional currencies by changing the
interest rates to stimulate the economy or
prevent a financial crisis. A rise in the
interest rate of a currency usually
strengthens it, while a cut in the interest
of a currency usually weakens it.
The value of crypto currency is dependent on its global acceptance, due to its decentralized nature. The forces of the free market set the value of each digital currency in accordance with its market value. That does not mean that taking positions on crypto currencies is not influenced by governmental interference, which might take a decision against its free use. Attempts to increase capital controls usually lead to an increased demand for crypto currencies, as investors look for other methods to maintain their wealth.
Either way, the mixture of a true free market of crypto currencies combined with the influences of the traditional economy create a teeming and volatile market that creates opportunities for online traders.
Instead of following financial from all around the world to get a comprehensive picture of a currency's value, trading on crypto currencies requires knowledge of that particular ecosystem. News about mining and dedicated exchanges regularly appears at dedicated blogs and websites. Following the trends of a much more confined type of asset makes it easier to track trends and capitalize on them.