LATAMArtículos (8)
How to trade crypto
<p>Crypto trading is surrounded by a lot of myths that scare away many people. Some think it’s expensive; others are concerned about its unpredictability. Quite often, these myths stem from a lack of understanding of cryptocurrency’s nature. After all, the cryptocurrency market is different from other financial markets. For one, cryptocurrencies have no physical form, so they can't change hands like gold or foreign currencies.<br /> <br /> In this article, we’ll explain the difference between crypto trading and investing and focus on one of the most popular ways to trade crypto – CFD trading. If you need to brush up on the basics of crypto, you can check out our <a href="/en/trading-academy/crypto/what-is-cryptocurrency">What is cryptocurrency, and how does crypto work</a> article before diving into cryptocurrency trading.</p> <h2>Crypto trading vs crypto investing</h2> <p> When looking to gain access to the crypto market, there are three possible scenarios to choose from: <br /> </p> <p>1. Buy and hold for an extended period of time to profit from the price increase.<br /> <br /> 2. Buy and sell regularly to profit from small price increases – crypto day trading.<br /> <br /> 3. Trade on the price movements with derivatives like CFDs.<br /> </p> <p paraeid="{4ae88016-a75c-44a6-af82-0cf7723ac87b}{215}" paraid="2140074582">Whenever buying the asset outright, as is the case with option 1, that's know as investing, and it can require substantial investment to make a considerable profit. It’s a strategy that has worked well for many when Bitcoin’s price was steadily climbing. However, investors are also the first to take the hit when crypto prices drop. <br /> </p> <p paraeid="{d7a63124-0b4c-4d34-80ee-1a17bba0613f}{28}" paraid="1728185531">The second and third options – trading cryptocurrency with CFDs, requires a much smaller amount of capital to start and can be beneficial even during crypto crashes. Moreover, CFD traders don't need to worry about having a crypto wallet or guarding their private key – they only need a trading account with an online broker.</p> <p><br /> <br /> <img alt="" src="/getmedia/40c7c01b-71b7-4c56-b2c9-c5fff357b984/article-how-to-trade-crypto-trading-vs-investing.webp" /></p> <h2>How to trade crypto with CFDs</h2> <p>Contracts for difference, or CFDs, are one of the most popular forms of derivative trading – allowing you to speculate on price movements without owning the underlying asset. If you are not familiar with derivative trading, check out our <a href="/en/trading-academy/cfds/what-are-cfds">CFD trading: a beginner’s guide</a><a href="/en/trading-academy/cfds/what-are-cfds"> </a>where we explain it in detail.</p> <p paraeid="{d7a63124-0b4c-4d34-80ee-1a17bba0613f}{120}" paraid="428144058">Many traders open and close contracts within the same day to avoid trading fees for holding a contract open overnight. However, although CFDs do incur overnight fees, they do not expire and can be used for a long-term strategy. </p> <p paraeid="{d7a63124-0b4c-4d34-80ee-1a17bba0613f}{164}" paraid="2122396469">When you trade on a cryptocurrency or any other financial market with CFDs, you can open two types of positions: long or short. </p> <h3>Going long</h3> <p>Traders open long (buy) positions when their research indicates that the price will increase. Let's say you decide to trade on Bitcoin. The current price is USD 22,500. You open a long position, and the price goes up to USD 22,600. The difference – USD 100 – is your profit. If the price drops to 22,400 instead, the USD 100 would become your loss.<br /> <br /> <img alt="" src="/getmedia/86eb405f-c7a7-4f80-91ba-8afdd17618ed/article-how-to-trade-crypto-long.webp" /></p> <h3>Going short</h3> <p>In a reverse scenario, when traders anticipate the price to drop, they open short (sell) positions. Let's say your research says that Bitcoin will depreciate soon, and you open a short position. Since you don't own any Bitcoin when you trade CFDs, you are not actually selling it; it's just that – opening a sell contract.<br /> <br /> If the price drops to USD 22,400, the USD 100 difference is your profit. However, if your research was incorrect and the price goes up to USD 22,600 instead, the USD 100 becomes your loss.<br /> <br /> <img alt="" src="/getmedia/948368c3-9740-4b83-a7f1-f687a12f1053/article-how-to-trade-crypto-short.webp" /><br /> <br /> To protect themselves from sudden unexpected price jumps, traders use risk management tools, such as stop loss and take profit. We explain how they work in our CFD trading guide, too.</p> <h2>What are the benefits of trading crypto with CFDs?</h2> <p>Crypto CFD trading is quickly gaining popularity for various reasons. Here are some of them:</p> <h3>Demo account</h3> <p>While you can't practice buying crypto, you can always create a demo account to test your CFD trading skills. Almost every trading platform nowadays offers free-of-charge and <a href="/en/demo-account">risk-free demo accounts</a> with functionality identical to real money accounts.</p> <h3>Leverage</h3> <p>CFD trading usually comes with leverage – borrowed funds from a broker to open larger positions. Depending on how big your leverage is, all you need to do is put down a small deposit, called a margin, to open a trade. If your trade is successful, your profit multiplies. However, in a losing trade, the loss multiplies too. That's why using risk management tools is crucial in every trading strategy.</p> <h3>Weekend trading</h3> <p>Since cryptocurrencies are not subject to following any centralised institutions, the crypto market is available for trading round the clock, even when the other markets are closed.</p> <h3>Trading on rising and falling markets</h3> <p>As you can see in our previous example, it doesn't matter whether the price goes up or down – for a CFD trader, both options are good. That's why when crypto owners hold their breath during yet another roller coaster ride their cryptocurrency experiences, CFD traders welcome both dips and rises with open arms.</p> <h3>Multiple trading opportunities</h3> <p>Those rollercoaster rides happen quite often – the market is relatively new and very volatile. When you trade crypto with CFDs, the more often the prices go up and down, and the bigger the swings are, the more trading opportunities it presents. However, rapid price movements can potentially result in losses too. That's why, as we mentioned previously, using <a href="/en/trading-academy/cfds/risk-management-tools-in-cfd-trading">risk management tools in CFD trading</a><a href="/en/trading-academy/cfds/risk-management-tools-in-cfd-trading"> </a>is extremely important.</p> <h2>Most popular cryptocurrencies to trade</h2> <p>The list of the most popular cryptocurrencies is very fluid, as some coins fall in and out of favour for one reason or another.<br /> <br /> Here are some of the most popular cryptocurrencies that are often mentioned in the top 5 and top 10 lists:<br /> </p> <ul> <li>Bitcoin (BTC)</li> <li>Ethereum (ETH)</li> <li>Binance coin (BNB)</li> <li>Ripple (XRP)</li> <li>Cardano (ADA)</li> <li>Dogecoin (DOGE)</li> </ul> <p><br /> Keep in mind that for CFD traders, the actual investment you make plays a less important role than for investors because CFD trades are leveraged. For example, with ThinkMarkets, you can trade Bitcoin CFDs with up to 50:1 leverage. This means that you only need to deposit 1/50th of its price to open a position.<br /> <br /> <img alt="" src="/getmedia/fcc0aad4-48bf-4bc0-bb8e-4ae92023bdb8/article-how-to-trade-crypto-capital.webp" /><br /> <br /> Moreover, if the required capital is larger than you are ready to allocate for a trade, you can always open smaller trades – as small as 0.01 of a full lot (which is one Bitcoin), and you'd need just a small amount for a deposit.<br /> <br /> Smaller trades usually work well for beginner traders, allowing them to practice using risk management tools without risking too much of their budget. Another alternative for beginners is to open a demo account and practice trading with virtual funds.<br /> <br /> Demo accounts can also be very useful for testing trading strategies. However, to build a good strategy, a trader first needs to understand what exactly drives the cryptocurrency prices up or down to avoid missing trading opportunities. Head to our <a href="/en/trading-academy/crypto/what-affects-crypto-prices">What affects crypto prices</a> article, to find out the main factors behind crypto volatility.</p>
What is the Bitcoin Halving Event?
<p>Bitcoin is arguably the most popular cryptocurrency in the world. News on this coin affects BTC’s price and sets forth a wave of price swings in other cryptocurrencies. That is why crypto traders are all waiting in baited anticipation for the Bitcoin Halving event.<br /> <br /> Occurring every 4 years, the Bitcoin Halving event is pivotal for Bitcoin’s network protocol and the entirety of the cryptocurrency market. In essence, the event reduces the reward given to Bitcoin miners for validating transactions on the blockchain. This reduction is hard coded into the Bitcoin protocol to ensure a predictable and controlled supply of BTC over time.<br /> <br /> The Bitcoin Halving, often called the heartbeat of the Bitcoin network, plays an important role in regulating the inflation rate of BTC. This controlled supply is what differentiates BTC from traditional fiat currencies, where central banks and governments can print more money should the need arise.<br /> <img alt="Picture1.png" src="/getmedia/e4681d7c-abe2-4766-97c5-ac66fcc6d1ae/Academy-Market-events-What-is-bitcoin-halving-event.webp" style="width: 480px; height: 270px;" title="Picture1.png" /></p> <p>When Satoshi Nakamoto created BTC in 2009, he specified that the total supply of BTC would be capped at 21 million coins. To gradually introduce new Bitcoins into circulation and incentivise miners to secure the network, a reward system was implemented. Initially set at 50 bitcoins per block, this reward is halved approximately every four years, or after every 210,000 blocks mined.<br /> <br /> As a result, the issuance rate of new bitcoins decreases over time, leading to a gradual reduction in the rate of Bitcoin supply growth.</p> <h2>Impact of Bitcoin Halving Event</h2> <p>The scheduled Halving events have a direct impact on the Bitcoin supply. With each event, the number of new bitcoins that enter the market is effectively cut in half. This reduction mechanism adds value to Bitcoin as it is protected against inflation.<br /> <br /> Many investors use this coin as a hedge against inflation, citing its ability to preserve purchasing power over time. In addition to this, changes in the supply dynamics influence the price expectations and market sentiment, creating major price volatility leading up to and following each Halving event.<br /> <br /> The limited supply and scarcity of Bitcoin increases its investor appeal, bringing the price upwards.</p> <h2>Overview of Historical Bitcoin Halving Events</h2> <p>Since its inception, there have been three Bitcoin Halving events with the next scheduled around April 18-19, 2024:</p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <th>Date</th> <th>Pre-halving reward</th> <th>Post-halving reward</th> </tr> <tr> <td>November 2012</td> <td>50 bitcoins</td> <td>5 bitcoins</td> </tr> <tr> <td>July 2016</td> <td>25 bitcoins</td> <td>12.5 bitcoins</td> </tr> <tr> <td>May 2020</td> <td>12.5 bitcoins</td> <td>6.25 bitcoins</td> </tr> <tr> <td>April 2024</td> <td>6.25 bitcoins</td> <td>3.125 bitcoins</td> </tr> </tbody> </table> <p>Check out our article on the previous Bitcoin Halving events and the impact on the price of BTC here.<br /> <br /> Trade the 2024 Bitcoin Halving event with ThinkMarkets now. Access 50:1 leverage, market-leading tight spreads, and 24/7 client support team. Portal.thinkmarkets.com</p>
Navigating the 2024 Halving: How to Trade Bitcoin's Big Event
<p paraeid="{5a322cb4-ebc8-4477-bc6a-908a3b9a4601}{227}" paraid="1424858045">As April 2024 approaches, the term Bitcoin Halving is gaining extra traction. Crypto traders and enthusiasts alike are waiting in bated breath for the Halving event’s impact not just on BTC’s price, but on altcoins as well. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{2}" paraid="2102964511">But what exactly is Bitcoin Halving and why is it important? In simple terms, it is an event hardcoded into Bitcoin’s blockchain protocol which reduces a miner’s rewards by half every four years. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{18}" paraid="608511683">This event adds a scarcity element into the cryptocurrency generating massive appeal and significantly affects the price of BTC. For more information on Bitcoin Halving, read our beginner’s guide here. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{24}" paraid="1312720657">Historically, the last three Bitcoin Halving events which happened in 2012, 2016, and 2020 have caused both short- and long-term volatility. Read here to get a comprehensive overview of BTC’s price during the first three Halvings. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{38}" paraid="1137844410">In this article, we’ll go through some insights on how to trade the 2024 Bitcoin Halving event. <br /> </p> <h2>Preparing for the 2024 Halving</h2> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{60}" paraid="50837725">As the 2024 Bitcoin Halving approaches, there is widespread anticipation for a bullish run. Diving into the historical data and examining how previous Halvings impacted the price of Bitcoin and other altcoins can help identify patterns. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{86}" paraid="406758674">Do you have a trading strategy in plan? Check out how they would’ve fared during the past Halving events using <a href="/latam/trading-academy/technical-analysis/traders-gym/" rel="noreferrer noopener" target="_blank">Traders’ Gym</a>, our backtesting tool, exclusively available on ThinkTrader Web. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{105}" paraid="302886376">Additionally, it’s crucial to keep an eye out for crucial developments within the Bitcoin ecosystem, such as changes in mining technology or regulatory updates. <br /> </p> <h2>Basic Tools and Indicators to Master before the Halving</h2> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{129}" paraid="873999985">Here are the basic tools and indicators that are essential for monitoring the crypto market. Achieving mastery of these tools will help you gain a basic understanding of how the market might move leading to and after the Bitcoing Halving event. <br /> </p> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{145}" paraid="1227863675">With a ThinkTrader account, you get free access to TradingView’s powerful charting interface, equipped with advanced trading tools and features. <br /> </p> <ol role="list" start="1"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="1" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="1" role="listitem"> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{155}" paraid="370002707">Price and Volume Charts <br /> </p> </li> </ol> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{166}" paraid="548849887">Visualise past and present price movements so you can identify patterns and trends. <br /> </p> <ol role="list" start="2"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="2" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="1" role="listitem"> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{178}" paraid="707903167">Moving Averages (SMA and EMA) <br /> </p> </li> </ol> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{187}" paraid="816925228">Simple and Exponential Moving Averages can help smooth out price data over specific periods, i.e. before and after the halving, providing insights into the overall direction of the market. <br /> </p> <ol role="list" start="3"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="3" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="1" role="listitem"> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{219}" paraid="797675934">Relative Strength Index (RSI) <br /> </p> </li> </ol> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{226}" paraid="1284535900">This momentum indicator can help identify whether BTC and other altcoins are overbought or oversold, offering clues on whether there’s an imminent price surge or downturn. </p> <h2 paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{226}" paraid="1284535900">Risk Mitigation During the Bitcoin Halving Event </h2> <h2risk bitcoin="" during="" event="" halving="" mitigation="" the=""> <p paraeid="{831b4ef8-5fb2-461b-9e3b-76564a87d13c}{246}" paraid="1294906623">The Halving event can lead to high volatility in the cryptocurrency market. If you’re planning to trade cryptocurrencies, make sure you apply these risk management strategies: <br /> </p> <ol role="list" start="1"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="1" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{19}" paraid="627052113">Set take profit and stop loss orders <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{26}" paraid="51518790">The crypto market moves fast. Setting take profit and stop loss orders will help you to secure profits and/or avoid bigger-than-expected losses. TP and SL orders help you exit positions at a predetermined price level without you constantly having to monitor the charts. <br /> </p> <ol role="list" start="2"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="2" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{38}" paraid="117793369">Diversify your portfolio <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{45}" paraid="326773893">While the main focus of the Halving is on Bitcoin, diversifying your portfolio is always ideal. Try to explore altcoins such as ETH, XRP, ADA, or BNB. You can read our guide on how the Bitcoin Halving event affects altcoins here. <br /> </p> <ol role="list" start="3"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="3" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{59}" paraid="665018224">Use leverage cautiously <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{66}" paraid="2133792347">ThinkMarkets offers crypto traders leverage as high as 50:1. This can amplify gains but also lead to larger losses. It’s recommended that you open smaller positions, especially in highly volatile markets. <br /> </p> <ol role="list" start="4"> <li aria-setsize="-1" data-aria-level="1" data-aria-posinset="4" data-font="" data-leveltext="%1." data-list-defn-props="{"335552541":0,"335559684":-1,"335559685":720,"335559991":360,"469769242":[65533,0],"469777803":"left","469777804":"%1.","469777815":"hybridMultilevel"}" data-listid="2" role="listitem"> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{84}" paraid="1701944390">Stay up to date <br /> </p> </li> </ol> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{91}" paraid="739956552">When trading cryptocurrencies, it’s crucial to keep yourself updated with market news and developments. This can help provide insights into potential price movements and allow you to adjust your strategy accordingly. For example, governments and financial institutions accepting crypto can increase its appeal, thus causing a price surge. On the other hand, stricter regulations or outright banning of cryptocurrencies can lead to downturns. </p> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{117}" paraid="1451762027"> </p> <p paraeid="{c1fe1201-e06c-4fb7-b0cd-7a7710b8a228}{121}" paraid="662450524">Trade the Bitcoin Halving event with ThinkMarkets to gain access to advanced trading tools, automatic risk management features, and the latest market news. </p> </h2risk>
Decoding Bitcoin Halvings: A Historical Look at Price Patterns
<p paraeid="{be5484a1-04bf-49d6-9422-2c52efe2209d}{207}" paraid="521337786">The Bitcoin Halving event is a scheduled protocol that occurs every 4 years in the Bitcoin blockchain system that cuts a miner’s rewards by half, effectively controlling the supply inflation. </p> <p paraeid="{be5484a1-04bf-49d6-9422-2c52efe2209d}{217}" paraid="1738663072">The first three Bitcoin Halving events had a significant impact on the cryptocurrency market’s history. If you’re looking to trade the 2024 Bitcoin Halving event, it’s crucial to look at historical data and identify any similar patterns. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>Halving Event</td> <td>Date</td> <td>Block Reward Before Halving</td> <td>Block Reward After Halving</td> </tr> <tr> <td>1st Halving</td> <td>November 2012</td> <td>50 BTC</td> <td>25 BTC</td> </tr> <tr> <td>2nd Halving</td> <td>July 2016</td> <td>25 BTC</td> <td>12.5 BTC</td> </tr> <tr> <td>3rd Halving</td> <td>May 2020</td> <td>12.5 BTC</td> <td>6.25 BTC</td> </tr> </tbody> </table> <p paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{134}" paraid="2060973884">Here, we’ve outlined the historical price movements of Bitcoin. We’ll be looking at the average closing price of BTC 3 months before and after the Halving event. </p> <p paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{160}" paraid="1748032745">All data is from StatMuse. </p> <h2 paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{170}" paraid="1354479776">First Halving (November 2012) </h2> <p paraeid="{2e203898-fe0d-4a35-b4c3-e6f9004cca0d}{180}" paraid="1722657036">Leading up to the first Halving, Bitcoin's price saw gradual increases. In the months that followed, the price experienced significant growth, marking the beginning of a prolonged bullish phase. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>August 2012</td> <td>September 2012</td> <td>October 2012</td> <td>November 2012</td> <td>December 2012</td> <td>January 2013</td> <td>February 2013</td> </tr> <tr> <td>$10.91</td> <td>$12.36</td> <td>$11.77</td> <td>$12.45</td> <td>$13.33</td> <td>$15.38</td> <td>$25.58</td> </tr> <tr> </tr> </tbody> </table> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{43}" paraid="930690934">The initial Halving event set a precedent for how Bitcoin's price could respond to reduced block rewards. In the short term, volatility was evident, with price fluctuations leading up to and immediately following the Halving. </p> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{69}" paraid="2110744758">However, the long-term effect was a substantial increase in Bitcoin's price. This trend was attributed to the reduced rate of new Bitcoin entering the market, creating a scarcity that, alongside growing awareness and adoption of Bitcoin, drove prices up significantly over the following year. </p> <h2 paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{79}" paraid="1374391257">Second Halving (July 2016) </h2> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{93}" paraid="161665470">The period before the second Halving was characterised by steady growth. Post-Halving, the price initially remained stable before embarking on a notable upward trajectory, eventually leading to unprecedented highs in late 2017. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>April 2016</td> <td>May 2016</td> <td>June 2016</td> <td>July 2016</td> <td>August 2016</td> <td>September 2016</td> <td>October 2016</td> </tr> <tr> <td>$448.32</td> <td>$461.95</td> <td>$642.87</td> <td>$661.36</td> <td>$579.59</td> <td>$605.85</td> <td>$700.97</td> </tr> <tr> </tr> </tbody> </table> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{219}" paraid="800232351">Similar to the first, the second Halving event was followed by a period of short-term volatility. However, the long-term trend was overwhelmingly positive. The year following the Halving saw a remarkable bull run, culminating in a then-all-time high towards the end of 2017 ($4,006.03). </p> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{231}" paraid="1433194142">This surge was fueled by increased investor interest, the growing utility of Bitcoin, and broader market speculation. </p> <h2 paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{237}" paraid="254152464">Third Halving (May 2020) </h2> <p paraeid="{2a92c082-d29a-4079-9ac3-c5737cf51b6b}{251}" paraid="648731874">Prior to the third Halving, Bitcoin's price was recovering from a market downturn, presumably due to the COVID lockdowns. Following the Halving, the price stabilised and then surged, contributing to a bull market that peaked in early 2021. </p> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>February 2020</td> <td>March 2020</td> <td>April 2020</td> <td>May 2020</td> <td>June 2020</td> <td>July 2020</td> <td>August 2020</td> </tr> <tr> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,501.01</td> <td>$11,653.75</td> </tr> <tr> </tr> </tbody> </table> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{134}" paraid="894512290">The most recent Halving event occurred during a year marked by global economic uncertainty caused by the COVID-19 virus. Despite initial concerns, Bitcoin's price not only remained stable but also began a significant upward trend in the months following the Halving. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{148}" paraid="851095680">This growth continued into 2021, reaching new all-time highs, with BTC peaking at $69k. The third Halving solidified the notion that such events are a precursor to bullish market cycles for Bitcoin, driven by a combination of scarcity and increasing demand. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{156}" paraid="795444340">These analyses highlight a pattern of increasing interest and investment in Bitcoin around Halving events, often resulting in significant price movements. Market sentiment and investor behaviour play critical roles in shaping the price movements of Bitcoin around Halving events. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{184}" paraid="1273263002">Each Halving has been accompanied by a mix of speculative anticipation and strategic investment, influencing short-term volatility and long-term price trends. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{194}" paraid="1905781713">In conclusion, the last three Halving events have demonstrated a pattern of volatility followed by a long-term bullish trend. It’s essential that traders looking to follow the Bitcoin Halving event do extensive market research before opening short or long positions. </p> <p paraeid="{3fd6ec28-72e1-4810-a40d-75944d1a1e7a}{210}" paraid="438273659">Trade the 2024 Bitcoin Halving Event with a safe and secure broker now. Experience 24/7 trading, instant execution, and high leverage. Portal.thinkmarkets.com </p>
Beyond Bitcoin: Trading Altcoins During the BTC Halving Event
<p>The Bitcoin Halving is a momentous event in the world of cryptocurrencies. Occurring every four years, it reduces the reward for mining Bitcoin transactions by half in an effort to control the supply of BTC. This mimics the scarcity-driven value preservation similar to precious metals such as gold and silver.<br /> <br /> The Halving event separates BTC from fiat currencies where central banks and governments can simply print more money and thus subject to inflationary pressure. The mechanism has been known to significantly influence the price of BTC as investors see long-term value in the coin. Learn more about what the Bitcoin Halving Event is here.<br /> <br /> However, the Bitcoin Halving event is not isolated on BTC charts. In the case of Ethereum, for instance, traders and investors have fixed ideas of how much one ETH should be worth against BTC. If BTC gains by X, then ETH also needs to gain by X amount.<br /> <br /> In this article, we’ll discuss the ripple effect of Bitcoin Halving among altcoins, such as Ethereum (ETH), Ripple (XRP), Cardano (ADA), and Binance Coin (BNB).<br /> <br /> As Bitcoin is arguably the most popular cryptocurrency, it’s no wonder that all altcoins have strong ties to it. BTC price movements, such as dumps, regulations and br eaking news, have an influence on altcoins.</p> <h2>Bitcoin Halving event’s effect on Altcoins</h2> <p>The Halving event often triggers speculative activity. The reduced supply post-halving has historically led to price increases, drawing investor attention not only to Bitcoin, but also to altcoins as alternative investment opportunities.<br /> <br /> Bitcoin miners may also shift their attention towards more profitable altcoins as BTC decreases their rewards. This influx affects the mining dynamics, security, and transaction processing speed of an altcoin’s network, increasing its investor appeal and valuation.<br /> <br /> Lastly, the media coverage surrounding the Bitcoin Halving event increases the mass appeal of cryptocurrencies. The heightened public interest attracts new investors, some of which may prefer exploring altcoins over Bitcoin and expanding the cryptocurrency world’s general liquidity.<br /> <br /> Let’s look at the price movements of famous altcoins ETH, XRP, ADA, and BNB during the third Bitcoin Halving event.</p> <h2>Third Halving (May 2020)</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>Coin</td> <td>Feb 2020</td> <td>Mar 2020</td> <td>Apr 2020</td> <td>May 2020</td> <td>Jun 2020</td> <td>Jul 2020</td> <td>Aug 2020</td> </tr> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>ETH</td> <td>$217.43</td> <td>$132.80</td> <td>$206.18</td> <td>$231.69</td> <td>$225.59</td> <td>$346.38</td> <td>$434.06</td> </tr> <tr> <td>XRP</td> <td>$0.21150</td> <td>$0.21150</td> <td>$0.17530</td> <td>$0.25940</td> <td>$0.28110</td> <td>$0.24180</td> <td>$0.23780</td> </tr> <tr> <td>ADA</td> <td>$0.0471</td> <td>$0.0305</td> <td>$0.0474</td> <td>$0.0743</td> <td>$0.0832</td> <td>$0.1390</td> <td>$0.1224</td> </tr> <tr> <td>BNB</td> <td>$19.25</td> <td>$12.55</td> <td>$17.02</td> <td>$17.12</td> <td>$15.41</td> <td>$20.67</td> <td>$23.14</td> </tr> </tbody> </table> <h2>Ethereum (ETH) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>Coin</td> <td>Feb 2020</td> <td>Mar 2020</td> <td>Apr 2020</td> <td>May 2020</td> <td>Jun 2020</td> <td>Jul 2020</td> <td>Aug 2020</td> </tr> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>ETH</td> <td>$217.43</td> <td>$132.80</td> <td>$206.18</td> <td>$231.69</td> <td>$225.59</td> <td>$346.38</td> <td>$434.06</td> </tr> </tbody> </table> <p>Ethereum's price movements around the Bitcoin halving in May 2020 show a significant trend. Before the Halving, ETH experienced a dip in March 2020. It should be noted that this was a global phenomenon. Financial markets crashed due to the imposed lockdowns caused by COVID-19.<br /> <br /> However, as the Halving approached, ETH began to recover, with the price in April bouncing by a whopping 55.26%. Just three months after the Halving, ETH showed a substantial increase in value, averaging $434.06, an 87.35% climb.<br /> <br /> This price movement indicates that Ethereum is considered as a complementary asset to Bitcoin, with its own fundamentals but ultimately, still riding the wave of increased crypto valuation.</p> <h2>Ripple (XRP) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>XRP</td> <td>$0.21150</td> <td>$0.21150</td> <td>$0.17530</td> <td>$0.25940</td> <td>$0.28110</td> <td>$0.24180</td> <td>$0.23780</td> </tr> </tbody> </table> <p>Ripple (XRP) also suffered from the economic uncertainty caused by the COVID-19 lockdowns. There was a steady decrease in price from February to March. However, during the month of the Bitcoin Halving Event, XRP’s price surged by 47.97%, averaging $0.25940 in May.<br /> <br /> Following the event, XRP continued to experience moderate volatility, experiencing an uptick in June before declining in the months after. This pattern suggests that while XRP does react to Bitcoin's Halving event, it also operates under the influence of its own market dynamics and fundamentals.</p> <h2>Cardano (ADA) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>ADA</td> <td>$0.0471</td> <td>$0.0305</td> <td>$0.0474</td> <td>$0.0743</td> <td>$0.0832</td> <td>$0.1390</td> <td>$0.1224</td> </tr> </tbody> </table> <p>Cardano (ADA) had a positive response around the third Bitcoin Halving event. Before the event, ADA was relatively stable, averaging $0.0471 and $0.0474. However, in the immediate aftermath of the Halving, ADA’s price significantly jumped by 56.75%.<br /> <br /> ADA’s positive correlation with the Bitcoin Halving event continued in the following months, with ADA averaging $0.1224, a 158.23% jump just three months after. This strong performance could indicate increased investor confidence in alternative cryptocurrencies and a search for potential high-growth assets within the crypto space.</p> <h2>Binance Coin (BNB) and Bitcoin Halving</h2> <style type="text/css">table { border-collapse: collapse; width: 100%; } td, th { border: 1px solid #dddddd; text-align: left; padding: 8px; } tr:nth-child(even) { background-color: #dddddd; } </style> <table> <tbody> <tr> <td>BTC</td> <td>$9,663.64</td> <td>$6,884.03</td> <td>$7,240.84</td> <td>$9,268.51</td> <td>$9,501.01</td> <td>$9,610.55</td> <td>$11,653.75</td> </tr> <tr> <td>BNB</td> <td>$19.25</td> <td>$12.55</td> <td>$17.02</td> <td>$17.12</td> <td>$15.41</td> <td>$20.67</td> <td>$23.14</td> </tr> </tbody> </table> <p>Binance Coin’s performance around the Bitcoin Halving event shows an interesting trend. BNB started strong with $19.25 in February before experiencing a market downturn in March. By April, it was in a recovery phase before dropping again in price after the Halving.<br /> <br /> However, two months after the Halving, there was a notable rise with July and August showcasing then all-time highs. This upward trajectory suggests that BNB, with its ties to the Binance exchange ecosystem, benefits from the increased trading activity and investor interest that often accompany Bitcoin halving events.<br /> <br /> The role of market sentiment cannot be understated, especially in the cryptocurrency industry. As Bitcoin's Halving generates media buzz and fosters discussions about scarcity and value, investor behaviour leans towards optimism.<br /> <br /> This sentiment is then mirrored in the altcoin markets, where investors, expecting a similar scarcity-induced appreciation, may turn their attention to altcoins like ETH, XRP, ADA, and BNB. The market historically witnesses a surge in trading volumes and, consequently, prices across a range of cryptocurrencies, as investors diversify their portfolios in search of gains.<br /> <br /> It is important, however, to note that while there is a correlation, it is not a direct causation. Altcoins are influenced by their own unique set of factors, and Bitcoin's halving is just one of them. Each altcoin has its unique ecosystem and fundamentals that play a significant role in its price determination. For instance, Ethereum's shift to Ethereum 2.0 and its proof-of-stake model is an intrinsic value proposition that can affect its price independently of Bitcoin's Halving events.<br /> <br /> Access a wide range of cryptocurrency coins when you sign up with ThinkMarkets. Conquer the market and identify trading opportunities with our advanced charting interface, powerful tools, and exclusive features now!</p>
What is cryptocurrency, and how does crypto work?
<p paraeid="{4d1335ab-25a5-4f9b-bc5f-b52c5bd8b8d2}{203}" paraid="1031262227">Ever since Bitcoin was launched in 2009, "to buy or not to buy" has become almost as quintessential as "to be or not to be". Fast forward to today, where we have access to thousands of cryptocurrencies, and the question turns into "to buy or not to buy what exactly?". <br /> </p> <p paraeid="{4d1335ab-25a5-4f9b-bc5f-b52c5bd8b8d2}{217}" paraid="980772721">In this article, we'll go through the basics of crypto, exploring how they work and why they’re a popular form of currency. </p> <h2>What is crypto?</h2> <p>Cryptocurrency, or crypto, is a digital currency that has no physical form. Think of your regular bank account – quite often, you don't see the money coming in or out of it. You get your funds transferred to you electronically. When you use your bank card to pay for goods and services, the money gets deducted from your account and transferred to other establishments electronically as well. Crypto is exactly that – a currency that exists only in digital form.<br /> <br /> You cannot withdraw crypto from an ATM as you normally withdraw cash using your credit or debit card. That is to say, crypto ATMs exist too, but their functionality differs from cash ATMs. With a crypto ATM, you can exchange regular money, also called fiat, for cryptocurrency or vice versa. However, since crypto has no physical form, it cannot be withdrawn.<br /> <br /> The other significant difference between crypto and traditional currencies is decentralisation. Unlike fiat money, controlled by financial institutions and governments, most digital currencies are decentralised and not controlled by anyone. Moreover, there is also no centralised place to store crypto transactions – they are recorded on a public network of thousands of computers, called a blockchain.<br /> <br /> <img alt="" src="/getmedia/c95da2d2-2b02-40ac-b465-1b7818b3903d/article-what-is-crypto-table.webp" /></p> <h2>What is blockchain?</h2> <p>Imagine a company has a large book of accounts to keep a record of all their expenses, income and other documents to verify payments. Blockchain is pretty much like that – a digital ledger that keeps track of all cryptocurrency transactions that have ever happened. The difference is that this ledger is not kept within an accounting team – everyone in the crypto world can access it. However, if this ledger were an excel file, this public access would be limited to 'View only'. No one gets the 'Edit' access – not the accounting team, not even the CEO, to continue the company analogy. That's what makes crypto transactions so secure – the participants can access the public record and check its validity, but they cannot alter it to their own benefit.<br /> <br /> <img alt="" src="/getmedia/6148fbb6-b663-45d8-9018-60056a65fff3/article-what-is-crypto-blockchain.webp" /><br /> <br /> It may seem a little controversial – if everyone has access to everything, they can easily access sensitive data, too, right? Not quite. The reality couldn't be further from this. Let's see how it works.</p> <h2>Private and public key</h2> <p>Every person taking part in a crypto transaction has a set of two keys – a private and a public key. Both keys are unique combinations of numbers and letters that give access to certain functions.<br /> <br /> A private key is like a password to your online bank account – you don't want to share it with anyone because it gives access to all your funds. With crypto, a private key is the equivalent of a password to your crypto wallet. No one on the blockchain can access other participants' private keys, and it is crucial to keep them secure.<br /> </p> <p paraeid="{c99b8bfb-4ef6-44c4-bfc8-6cf20fc28ed3}{146}" paraid="2059569509">A public key is like a bank account number or, in this case, a digital wallet address where crypto assets are stored. It is public and can be accessed by anyone, just as you would share your bank account number so someone can transfer funds to it. Everyone can also see how much money the wallet contains. <br /> </p> <p paraeid="{c99b8bfb-4ef6-44c4-bfc8-6cf20fc28ed3}{166}" paraid="103957184">Every cryptocurrency transaction is secured through cryptographic techniques: the sender authorises the transaction with their private key, creating a digital signature. This signature, along with the transaction details, is verified on the network using the sender's public key but without disclosing the private key itself. Once confirmed and added to the blockchain, the funds are controlled by the recipient, who can then create new transactions with their own private key. </p> <p><br /> <img alt="" src="/getmedia/38bb8c28-d885-4058-9669-84015964bedf/article-what-is-crypto-keys.webp" /><br /> <br /> So, due to public key accessibility, everyone in the blockchain network can see when a transaction happens and that X amount of crypto has been moved from wallet A to wallet B. However, since no one can access the receiver's private key, they can only 'View' this transaction but not 'Edit' it.<br /> <br /> This process also plays an important role in cryptocurrency mining.</p> <h2>What is crypto mining?</h2> <p>All the transactions stored on a blockchain are grouped into blocks that are connected into a chain – that's where the name comes from. In a nutshell, mining means verifying these transactions, putting them together in blocks and adding these blocks to the blockchain.<br /> <br /> There are different types of blockchains and methods of transaction validation. Bitcoin blockchain, for example, uses a system that is called Proof-of-work. As Bitcoin is arguably the most popular virtual currency, and many other cryptocurrencies are mined the same way, we'll take Proof-of-Work as an example to explain how mining generally works.<br /> <br /> Whenever a new transaction gets signed off by a sender, it is distributed to the network. At this point, this transaction is still unconfirmed. A miner picks it up and checks whether it's authentic. Using a public key, miners can determine whether the transaction has been signed off by a sender and ensure that the sender owns the required amount of crypto.<br /> <br /> That's a simplified explanation. What actually happens in the background is complex mathematical equations that a miner needs to solve.<br /> <br /> <img alt="" src="/getmedia/0fad863e-a334-4cf2-9d26-0341c390e618/article-what-is-crypto-mining.webp" /><br /> <br /> Crypto mining requires advanced hardware and software. This, in turn, uses up a lot of energy. That's why hypothetically, anyone can become a crypto miner, but not everyone has the resources for it. However, the crypto mining industry is still very competitive due to its incentive – successful miners are rewarded with new coins. Bitcoin miners, for example, receive several Bitcoins every time they add a new block, so the reward makes the work worth it.<br /> <br /> If we compare the mining process with a company's book of accounts, a miner would be an accountant who checks all the transactions and adds a new page to the book.</p> <h2>Why is crypto secure?</h2> <p>As we already discussed, decentralisation and cryptography make cryptocurrencies very secure. The former provides transparency by keeping all the records public, while the latter protects sensitive information. In reality, cryptography plays a bigger role in protecting cryptocurrency.<br /> <br /> When a miner collects enough transactions to form a new block and solves a mathematical equation, the block becomes part of the chain. The links connecting one block to another are also cryptographically encoded and are nearly impossible to hack.<br /> <br /> Each new block has a piece of code from the previous block within it. Imagine three blocks of different colours – block A is blue, block B is yellow, and block C is red. The way cryptography works, block B wouldn't be entirely yellow – it would have a spot of blue. The red block would have a spot of yellow, a spot of blue, and so on. The different colour spots within each block are the code that gets transferred down the chain as new blocks are created.<br /> <br /> <img alt="" src="/getmedia/56af9d6e-ef73-43b8-a34f-05d099c13fe7/article-what-is-crypto-secure.webp" /><br /> <br /> Altering just one transaction within a block would change its colour (code), and all the consequent blocks would be affected in a domino effect. Since all this data is public, it would be immediately noticed by the network. Moreover, altering a transaction would require so much computing power that the cost would exceed the potential reward. This mechanism also solves the double-spending problem – everyone can see that a certain Bitcoin or a part of it has already been transferred to someone, so the sender cannot transfer it to someone else again.</p> <h3>What about all the crypto hacks that happen occasionally?</h3> <p>Unfortunately, they do happen, but in most cases, a cryptocurrency hack happens when private keys are not secured properly and get stolen. However, it is extremely hard to distribute the stolen crypto in a network where everyone can track transactions, so most hackers get caught eventually.<br /> <br /> Hence, if you own cryptocurrency, one of your main goals is to protect your private key at all costs. However, there are alternative ways to make crypto work for you – you can take advantage of cryptocurrency's volatility and trade digital coins without buying them via CFDs. Check out our <a href="/en/trading-academy/crypto/how-to-trade-crypto">How to trade crypto</a> article to find out more details about it.</p>
What affects crypto prices?
<p>The cryptocurrency market is highly volatile. It was first established in 2009 with the invention of bitcoin, but the world has already witnessed quite a few large spikes and plunges of various digital currencies. It may be bad news for cryptocurrency investors, whose goal is to build up profit on increasing prices, but if you trade cryptocurrency with CFDs, it’s a land of potential opportunities.<br /> <br /> In this article, we’ll explore the main factors driving crypto prices up and down and examine the Bitcoin case study that made headlines at some point.</p> <h2>The main drivers of the cryptocurrency market</h2> <p>In terms of factors affecting price movements, the crypto market is no different than any other financial market as it depends on cryptocurrency supply and demand.</p> <p paraeid="{d4ca0ffb-e5c5-479c-95a6-5d91711657d0}{27}" paraid="319051773">In some cases, it's quite straightforward. For example, one of the reasons Bitcoin is so popular is that its circulating supply is limited to 21 million coins. This limit cannot be changed because it has been encoded into it upon its creation. It means that just like any other scarce asset with demand exceeding supply, Bitcoin is supposed to grow in value, and makes a volatile alternative to holding ever deprecating fiat currency. </p> <p paraeid="{d4ca0ffb-e5c5-479c-95a6-5d91711657d0}{57}" paraid="2052867750">However, when the first cryptocurrency dropped from an all-time high of nearly USD 70,000 to a little over USD 16,000 in just a year, it became clear that cryptocurrencies are still a very speculative asset class and demand for it is not as stable as that for gold, for example. <br /> <br /> Here are the main factors that play a role in the price formation of cryptocurrencies:<br /> <br /> <img alt="" src="/getmedia/7ba7c6f7-7451-470a-9a00-d76618203a86/what-affects-crypto-prices_1.png?width=550&height=295" style="width: 550px; height: 295px;" /></p> <h3>Stock market</h3> <p>It may not seem intuitive, but when the stock market goes down, so does crypto. The explanation is quite simple – people steer clear of risky instruments like cryptocurrencies when there’s a market downturn and buy safe-haven instruments like gold, which drives crypto prices down.</p> <h3>Regulations</h3> <p>Any regulation that can be perceived as strengthening crypto's security and trust usually has an almost immediate positive effect on its prices. On the other hand, any negative news, such as new policies regulating cryptocurrency or crypto bans in some countries, brings its prices down.</p> <h3>Social media</h3> <p>The social media hype around some cryptocurrencies has proven to be very influential on their prices on multiple occasions. Elon Musk's tweets alone have caused quite a few upward and downward movements.</p> <h3>Security concerns and crypto collapses</h3> <p>Security breaches and the collapses of the cryptocurrency exchanges like FTX have a strong negative effect on the entire crypto market. Many people start panic selling their crypto assets, driving the prices down and creating a lot of trading opportunities for CFD traders who are looking to speculate on the price movements of cryptocurrencies.</p> <h2>How the drivers of cryptocurrency prices work</h2> <p>All the factors we've discussed above can be very influential on their own, but usually, it's a combination of several of them that causes significant moves. Let's see how it works using Bitcoin as an example.</p> <h3>How did Bitcoin reach the all-time high?</h3> <p>In a series of events in 2021, Bitcoin made headlines reaching an all-time high of nearly USD 70,000. Here is a timeline of events and factors that played a major role in it:<br /> <br /> <strong>March, 2021</strong><br /> As 2021 has been marked by the ongoing COVID-19 pandemic, the US government released the third and largest stimulus check to support the economy and reduce the financial strain on consumers and businesses. People pile into Bitcoin as a hedge against inflation, out of boredom, and as they can’t spend their money on holiday trips and clothes as usual.<br /> <br /> <strong>July, 2021</strong><br /> After some back-and-forth contemplation on his decision, Elon Musk announced that Tesla will likely start accepting payments in Bitcoin after all.<br /> <br /> <strong>September, 2021</strong><br /> El Salvador became the first country in the world to use Bitcoin as a legal tender, requiring all businesses to accept it as a form of payment.<br /> <br /> <strong>October, 2021</strong><br /> The first Bitcoin exchange-traded fund, ProShares Bitcoin Strategy ETF, was approved and launched in the US.<br /> <br /> <strong>November, 2021</strong><br /> Bitcoin developers released Taproot – the largest system upgrade in four years, designed to expand its functionality and decrease transaction fees.<br /> <br /> All in all, US traders were left with spare money in their hands and a lot of indicators suggesting Bitcoin’s positive outlook. As the capital invested in this promising crypto coin grew, attracting investors from other countries across the world, its price reached an impressive USD 67,566.83.</p> <h2>How did Bitcoin fall from its all-time high?</h2> <p>Inspired by its quick rise, some analytics predicted Bitcoin’s rally to continue. However, the end of 2021 brought a grim end to it. Here is the chronology of the main factors and events that influenced Bitcoin’s decline:<br /> <br /> <strong>November, 2021</strong><br /> Crippled by the pandemic, economies have reported the fastest inflation surge since 1982.<br /> <br /> <strong>December, 2021</strong><br /> The US intelligence released reports about Russia’s military offensive against Ukraine.<br /> <br /> <strong>January, 2022</strong><br /> Russia's central bank proposed to ban the use and mining of cryptocurrencies, following the example of eight other countries, including China, that have already imposed a full crypto ban.<br /> <br /> <strong>February, 2022</strong><br /> Russia launched a full-scale invasion of Ukraine, throwing global stock market into turmoil.<br /> <br /> <strong>March, 2022</strong><br /> Six months after El Salvador's Bitcoin adoption, reports revealed that cryptocurrency usage in the country remained very low, and the plan was likely to fail.<br /> <br /> <strong>Second quarter</strong><br /> Concerns about the high energy consumption required for Bitcoin mining and its negative environmental effects increased and intensified.<br /> <br /> <strong>End of the second quarter</strong><br /> Tesla sold 75% of its Bitcoin.<br /> <br /> As a result of these events, the world was left with a crashing stock market, a very pessimistic outlook on its future development and several indicators suggesting that crypto was not doing well. <br /> <br /> Cryptocurrency holders started turning towards safer investment options and selling their volatile and risky Bitcoin, driving its price down to a mark below USD 20,000.<br /> <br /> Today Bitcoin’s future remains unclear, with some analysts being very optimistic and some not expecting much. However, the number of trading opportunities these bull and bear runs presented for CFD traders is beyond imaginable.<br /> <br /> It's worth noting that most cryptocurrencies usually experience a domino effect, whether their prices rise or fall. Like stock indices belonging to the same industry, the price movements of different cryptocurrencies are often correlated. In the wake of Bitcoin's rise, many other digital coins also went up, and its crash caused their consecutive crash. That's why when looking for a trading opportunity on a certain cryptocurrency, it's worth checking a few others, as they may have potential too.</p> <h2>Market sentiment</h2> <p>All the main factors influencing cryptocurrency pricing have something in common – market sentiment. Digital coins are purely speculative and don't have an underlying asset to determine cryptocurrency values. For stocks, for example, it's a company's performance; for commodities, it's actual physical assets.<br /> <br /> That's why besides actual events influencing crypto prices, there is always an element of public perception of them. One good example of this influence is Dogecoin. Created as a sarcastic meme coin, this cryptocurrency gained over 600% in value, followed by a large drop, just because of the hype created by Elon Musk and other influential figures on social media.<br /> <br /> These are just a few examples that may explain what’s behind the highly volatile cryptocurrency market. Any hands-on trader can probably name a few more factors, but for new traders, it is not a bad idea to stick to basics at the beginning of their crypto journey. Practising your skills on a <a href="https://portal.thinkmarkets.com/account/individual/demo">demo account</a> can also help improve your knowledge.<br /> </p>
Cómo operar CFDs de criptomonedas el fin de semana
<p>El mercado de criptomonedas es conocido por su naturaleza continua, lo que permite a los traders operar las 24 horas del día, los 7 días de la semana. Para aquellos interesados en operar CFDs (Contratos por Diferencia) de criptomonedas los fines de semana, las oportunidades y los riesgos pueden diferir del trading regular de criptomonedas. Este artículo explora cómo puedes operar CFDs de criptomonedas de manera efectiva durante el fin de semana y presenta los beneficios y estrategias para maximizar tu potencial.</p> <h2>¿Qué son los CFDs de criptomonedas?</h2> <p>Los CFDs de criptomonedas son instrumentos financieros que te permiten especular sobre los movimientos de precios de las criptomonedas sin necesidad de poseerlas. Al operar un CFD, estableces un contrato con un broker para intercambiar la diferencia en el precio de una criptomoneda entre la apertura y el cierre de la posición, lo que hace posible operar tanto en mercados al alza como a la baja.</p> <h2>¿Por qué operar CFDs de criptomonedas los fines de semana?</h2> <p>El trading de CFDs durante los fines de semana ofrece varias ventajas y conlleva riesgos únicos del mercado de fin de semana. Los CFDs permiten operar con <strong>apalancamiento</strong>, es decir, abrir posiciones más grandes con una inversión inicial menor. Esto puede generar ganancias significativas si el mercado se mueve a tu favor, pero también aumenta el riesgo de pérdidas.</p> <p>Además, operar CFDs en fines de semana permite <strong>flexibilidad</strong> para quienes tienen horarios de semana ocupados y brinda la posibilidad de reaccionar a movimientos de precios que ocurren en horas fuera del mercado tradicional.</p> <p>Los fines de semana pueden presentar una <strong>mayor volatilidad</strong> debido a menores volúmenes de trading y menos participantes en el mercado, lo cual puede ofrecer oportunidades para aquellos que saben manejar sus riesgos. Además, los traders de CFDs pueden beneficiarse de precios en alza y a la baja, lo que puede ser ventajoso en momentos de movimientos impredecibles.</p> <p>Con los CFDs, puedes obtener ganancias tanto en mercados alcistas (bull) como bajistas (bear), lo que genera más oportunidades para beneficiarse de la alta volatilidad, sin importar si los precios suben o bajan.</p> <p>Finalmente, operar con CFDs elimina la necesidad de poseer la criptomoneda subyacente, lo que te permite especular sobre el precio sin preocuparte por el almacenamiento, la gestión de billeteras criptográficas o la seguridad de tus activos.</p> <h2>¿Dónde puedes operar CFDs de criptomonedas los fines de semana?</h2> <p>Brokers como ThinkMarkets ofrecen acceso 24/7 al trading de CFDs de criptomonedas, incluidos los fines de semana. Por ejemplo, con ThinkMarkets puedes operar diversas criptomonedas, como Bitcoin y Ethereum, con apalancamiento para aprovechar los movimientos de precios de fin de semana.</p> <p>La operación de CFDs de criptomonedas se realiza a través de una plataforma de trading, y ThinkTrader es la plataforma ideal para el trading de CFDs de criptomonedas con ThinkMarkets. Con sus herramientas avanzadas de gráficos, funciones de gestión de riesgos y una interfaz fácil de usar, la plataforma ofrece una experiencia de trading más fluida. Además, permite automatizar tus estrategias de trading, para que no tengas que monitorear el mercado constantemente.</p> <h2>Riesgos de operar CFDs de criptomonedas los fines de semana</h2> <p>Durante los fines de semana, la <strong>liquidez puede ser significativamente menor</strong> debido a una menor participación de traders, lo que puede llevar a spreads más amplios, encareciendo la apertura y cierre de posiciones. También significa que las operaciones grandes pueden tener un mayor impacto en los precios de mercado, lo que a menudo genera deslizamiento.</p> <p>El trading con <strong>apalancamiento</strong> amplifica tanto las ganancias como las pérdidas. Aunque el apalancamiento puede aumentar los rendimientos potenciales, también eleva el riesgo de pérdidas significativas. Durante los fines de semana, operar con apalancamiento requiere una cuidadosa gestión de riesgos para evitar resultados indeseados.</p> <p>Los <strong>gaps de precios</strong> pueden ser más frecuentes en los fines de semana, especialmente en horas de bajo volumen. Un gap de precio ocurre cuando el precio del mercado cambia significativamente hacia arriba o abajo, sin operaciones en el medio, lo que puede resultar en la ejecución de tus órdenes stop-loss a un precio menos favorable.</p> <h2>Estrategias para operar CFDs de criptomonedas los fines de semana</h2> <p><strong>El swing trading</strong> es una estrategia popular para operar los fines de semana. Implica mantener una posición durante varias horas o días para captar oscilaciones de precios. Con el swing trading, puedes aprovechar los movimientos de precios a corto plazo que ocurren en esos períodos. Usar indicadores técnicos como las Bandas de Bollinger y las Medias Móviles puede ayudarte a identificar puntos de entrada y salida.</p> <p>Si ya tienes una posición en criptomonedas, puedes usar CFDs para protegerte (hacer <strong>hedging</strong>) de posibles pérdidas. Por ejemplo, si posees Bitcoin y te preocupa una posible caída en su precio durante el fin de semana, puedes abrir una posición corta para compensar cualquier pérdida. La cobertura te ayuda a proteger tus inversiones en momentos de incertidumbre.</p> <p>Los <strong>bots de trading automatizado</strong> pueden ser especialmente útiles para operar con CFDs los fines de semana. Muchas plataformas permiten configurar bots que ejecutan operaciones en función de parámetros predeterminados, lo cual es beneficioso para manejar los rápidos movimientos de precios que pueden ocurrir los fines de semana. Además, los bots automáticos pueden ayudar a eliminar el sesgo emocional en tus decisiones de trading.</p> <p>El trading de los fines de semana a menudo genera la formación de rangos de precios. El <strong>range trading</strong> implica identificar niveles de soporte y resistencia y operar dentro de ese rango. Esta estrategia puede ser efectiva si notas que el precio rebota entre dos niveles, lo que te permite comprar en soporte y vender en resistencia.</p> <h2>5 consejos para un trading exitoso de CFDs de criptomonedas en fin de semana</h2> <h3>Usa órdenes de stop-loss y take-profit</h3> <p>Estas herramientas ayudan a gestionar el riesgo al cerrar automáticamente tus posiciones una vez alcanzados los niveles de ganancia o pérdida predefinidos. Dada la imprevisibilidad del mercado de fin de semana, configurarlas puede ayudar a proteger tu capital.</p> <h3>Sigue noticias clave del mercado</h3> <p>Los mercados de fin de semana pueden ser influenciados por eventos noticiosos, como anuncios regulatorios o desarrollos inesperados en el espacio cripto. Mantente informado a través de sitios de noticias de criptomonedas y redes sociales para reaccionar rápidamente a eventos importantes.</p> <h3>Evita el uso excesivo de apalancamiento</h3> <p>Aunque el apalancamiento puede ser tentador en tiempos de alta volatilidad, es esencial usarlo con precaución. El apalancamiento excesivo puede llevar a pérdidas mayores si el mercado va en tu contra.</p> <h3>Monitorea los spreads</h3> <p>Como se mencionó, los spreads pueden ampliarse los fines de semana, así que asegúrate de revisarlos antes de colocar tu operación. Los spreads altos significan costos más altos, por lo que es importante incluirlo en tu estrategia.</p> <h3>Usa herramientas de análisis técnico</h3> <p>Herramientas como el RSI (Índice de Fuerza Relativa), MACD (Media Móvil de Convergencia/Divergencia) y los retrocesos de Fibonacci pueden ayudarte a identificar oportunidades de trading. Estas herramientas son útiles los fines de semana, cuando el análisis fundamental puede ser menos efectivo debido a la menor cantidad de participantes.</p>
