Bitcoin and Binary Options Trading
About a year and a half back I heard about Bitcoin and at the time I didn’t pay much attention to it, but lately this word seems to pop out all over the place. The thing that sparked my recent interest was the fact that Bitcoin (BTC) increased its value from $13/BTC on the 1st of January to $190/BTC on the 9th of April (2013). When I heard that, my first thought was “WTF is Bitcoin?!?” immediately followed by ” How can I make some money out of that kind of fluctuation?” …so I did some research on it and here’s what I found out:
What is Bitcoin?
The simplest answer is: a digital currency. Yep, it’s MONEY. But unlike traditional currency, Bitcoin exists only in the digital world and you will never find it in the form of paper or metal money. Well, some vendors offer banknotes and coins denominated in bitcoins but that is more of an exception than a rule. It’s similar to video game money with the big difference that you can buy real world stuff with it.
The Bitcoin was first invented around 2008 by Satoshi Nakamoto but it is believed that this name is a pseudonym and since 2011 he has “vanished” from the internet, saying that he had “moved on to other things”. Nonetheless, the Bitcoin still exists and is now hotter than ever. Unlike traditional currency, Bitcoin is not issued by a centralized authority. Instead, the network is programmed to produce Bitcoins until the total number reaches 21 million BTC. At the moment, computers (called “bitcoin miners”) produce 24 bitcoins every 10 minutes. Within the year 2017 this amount will be halved and then the amount produced will decrease gradually until the target of 21 million bitcoins will be reached in 2140…long time, I know.
The big jump in price that I talked about earlier was mostly triggered by the Cyprus crisis and the unprecedented decision of taking (I refrain from saying “stealing”) people’s savings. Of course such a course of action can determine a guy to lose some trust in the banking system and that’s when Bitcoins begun to gain some attention and increase in value because more people started to see Bitcoin as a valid investment or just a new way to preserve their savings.
The whole Binary industry is advancing at a fast pace these days and during the last period we see more and more brokers taking serious steps towards becoming real leaders in the business. Regulation is slowly starting to be requested by more and more traders and as a result, brokers are more interested in becoming regulated. That can only benefit us traders because the trading environment will be safer and a lot of the shady brokers will disappear. Regulation is important, of course, but it is not the only thing we need for the industry to go forward. Constantly improving, innovating and coming up with new ideas is also an important step towards making Binary options trading even bigger than it already is. Such a step is introducing Bitcoin as an asset. At the moment just one UK based broker offers Binary options on Bitcoin, but it’s a start and it’s something fresh. I can’t say I’m a big fan of trading Bitcoin as a Binary asset, but I do like the fact that brokers are trying to come up with new things. Where can I trade Binary Options? Visit this link.
Why trading Binary Options on Bitcoin Sucks?
Like I said, I’m not a big fan of Bitcoin trading and this is mostly due to its volatility. Some traders will find this to be a good thing because after all, volatility moves price and if price moves, we can make money. But going from $13/BTC to $190/BTC in just 3 months is not what I call healthy volatility. I would rather call this erratic movement and an almost impossible to trade asset. Of course, even the strongest trend can break down on any currency pair, commodity, stock or index, but they offer clues before the turn actually happens, while Bitcoin just lacks liquidity at the moment and cannot be traded in a normal fashion.
Why trading Binary Options on Bitcoin doesn’t Suck?
Some of us are risk takers and love sharp, huge moves. Well, for those traders, Bitcoin is the hottest asset…but to be honest to me it looks more like gambling because its movement is just too hard to be safely predicted. Just as I said before, Bitcoin is just too wild and crazy right now and I don’t consider it a valid investment option. A lot of this irregular movement comes from the fact that only a few merchants accept Bitcoin payments and this makes it less popular and of course, less traded.
Wrapping it up – Don’t Gamble on Bitcoin
This relatively new digital currency might have some uses, but for me US Dollars or Euros work just fine and I really don’t feel the need for digital money. Binary Options brokers offer a lot of assets, some volatile, some slow so take your pick. We have enough assets to trade and one more is of little interest and almost not needed at all. Also, it is believed that a large share of Bitcoin’s commercial use is for illicit gambling, drug transactions or money laundering…oops…better stay away for now. So bottom line is this: unless you need a money laundering service, stick to the regular assets…there are plenty.