Bitcoin trading is a gold mine to say the fact. You can make a lot of money from it if you know what you are doing. You do not have to buy bitcoin and keep it until its value rises; you can trade bitcoin via CFD in Canada to make money. Bitcoin CFD trading allows the trader to make a profit when the price of bitcoin is rising or falling.
While this seems like the best way to trade bitcoin in Canada because of the better profit-making opportunity it presents, you need a good knowledge of the factors that determine the price movement of bitcoin before you can make a meaningful profit from bitcoin trading. Check below for helpful information in that regard.
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What moves bitcoin price?
You need to know the factors responsible for price movement in bitcoin trading before you can start trading bitcoin. Check below for some of these factors:
- Bitcoin supply: The simple law of demand and supply applies a great deal in this situation. The higher the supply, the lower the price and vice versa. In the same vein, the higher the demand, the higher the price. When the supply is low and demand is high, then the price of bitcoin will rise. The total supply of bitcoin to date is 21 million. Studies show that this quantity will be totally exhausted by 2140.
- Economic news: Economic news can go a long way to determine the rate of demand for bitcoin. Bad press, for example, will cause people to be skeptical and lose interest and this will lower demand for bitcoin. Consequently, it will cause the price to fall. If the news indicates uncertainties about bitcoin longevity, value, or security, for example, it can bring about a fall in demand and the price will equally go down. Good press, on the other hand, can cause the value of bitcoin to shoot to the stars. The quality of the news can depend on its source. If the source is trustworthy, then it will surely have a considerable impact on the bitcoin price movement.
- Integration: One other factor worthy of note is the issue of integration. If a company accepts PayPal as a means of payment then you can expect its value to rise a great deal. If a store like Amazon Canada, Wal-Mart Canada, or any other store accepts bitcoin as a means of payment, then it will increase the demand for bitcoin and this will increase its market value, thereby causing its price to rise. A bitcoin trader that wants to make a consistent profit in Canada will keep these things in mind. They are also very easy to understand.
- Important events: Series of events can determine whether or not the price of bitcoin will rise or fall. Good examples of such events include macroeconomic bitcoin announcements, security breaches, and changes in government regulations. If the events are negative towards bitcoin, they can force its price down and vice versa. The value of bitcoin can soar if there is an agreement between bitcoin users to speed up the network.
From the information above, you would have learned about the many features that can affect the price movement of bitcoin. You can see that bitcoin price is moved by economic events mainly.
So, you must be on the lookout for news and events relating to bitcoin if you want to make a regular profit from bitcoin trading. The beauty of it is that you can access many economic events for free online.
You can even catch wind of the news events as an early bird, thereby enabling you to make decisions as regards your bitcoin trading before every other trader does.