Bitcoin has revolutionized the world of online finance. Transactions can now be made entirely using computer-produced currency. Several people have become incredibly wealthy using cryptocurrencies. And when forex trading comes in, the average user does not have to be a founding Bitcoin blockchain miner to get consistent spectacular returns.

 

Early Adoption. Processor Companies. And Early Investment

This money-making potential does not mean that all of the profits go to those who simply buy early and hold as the currency makes a massive amount of money in a short period of time. An example of institutional investment on a greater scale was the early investment of the Winklevoss twins.

These Facebook key players got into Bitcoin in the first few years of its inception. They set up a massive exchange-traded fund and then started exchanging. You know the end of that story!

But other Bitcoin millionaires like Tony Gallippi made their money starting Bitcoin processor companies. These individuals were venture capitalists who saw the cryptocurrency as a money-making opportunity and founded companies to help facilitate the process.

Jared Kenna, on the other hand, simply invested early. He bought his first bitcoins when they were only 20 cents. Kenna then held onto those coins, buying and selling more over time. He was able to amass a fortune of millions of dollars through the process of buying and selling cryptocurrency.

But while Bitcoin should not be seen as a guaranteed way to hit jackpot, it’s definitely an avenue for generating significant cash. ‘Cause enter Forex.

Cryptocurrency on Forex

Bitcoin may seem like an entirely different approach to currency, and in some ways it is. It’s not based off of the decisions of banks or governments like traditional forms of currency. And it cannot be used to trade deposits or pay off taxes. But that doesn’t mean Bitcoin is immune to the concepts of currency trading. In fact, the entire system is based on the principles of Forex trading.

Foreign exchange trading is based on the relationship between supply and demand impacting price changes. The limited supply of Bitcoin means that investors should focus less on mining and blockchain and more on the value and utility of Bitcoin to investors.

Therefore, if one wants to make money off of trading Bitcoin, they must look at forces beyond supply centering on extra-governmental demand. In regular Forex trading, an investor studies news and financial strength around several currencies in order to make decisions about going long or short on different currency trades.

An economic decline or a rise in printing from a central bank will lead to a significant decrease in the value of a currency and will shift that value relative to other currencies. With Bitcoin, everything is about the potential interest from different investors, companies, and countries.

So the secret to trading Bitcoin is to slightly shift one’s approach to foreign exchange trading. One can navigate swaps, arbitrage, and other peculiarities of the Forex trading world with a Forex practice account. Just to test the waters. Because to trade Bitcoin, an investor must follow corporate valuations carefully while taking advantage of options and swaps in order to mitigate possible risk.

Bitcoin’s Source of Value

Bitcoin has a different source of value which comes mainly from easing financial transactions made online and the currency transactions of different companies. The vote of confidence of more investors plus corporate respect means more demand and more returns. Simply put, if more companies buy Bitcoin, demand and prices go up.

A trader may sell the currency when a government proposes regulations or when a high-profile criminal corruption case involves Bitcoin. And buy when companies like Wells Fargo is about to make a massive investment on bitcoin.

Trades also hinge on economic data from other currencies like GDP and non-farm payrolls, both of which may point to the weakness of the dollar or the euro and the relative strength of Bitcoin. There is also the connected nature of these cryptocurrencies. A greater acceptance of one blockchain-based cryptocurrency means a greater demand for these currencies overall, and a consequent greater value for Bitcoin trades.

 

The Future of Cryptocurrency Seems Stable

The question of validity is not a question that will drive the price of the dollar or the euro. These currencies have existed for decades or longer and have no intention of going anywhere.

Despite what some cryptoskeptiks argue, Bitcoin trading and other trading in cryptocurrencies offers the same levels of risk and volatility that other forms of foreign exchange trading have. It has ups and downs like any currency, and those shifts may be extreme given the young age of the coin.

However, investing in the dollar or the yen will not lead to the sort of massive increases Bitcoin has seen in recent years. Betting on the right strategy and putting in the hours will make the plunging into this new venture the best decision one can probably make.