Invest in Bitcoin and Other Cryptocurrency (CFDs)
Invest in Bitcoin and Other Cryptocurrency (CFDs)
Choose from a wide range of virtual currencies such as Ethereum, Litecoin, Ripple and much more
If you had invested $1,000 on Bitcoin(CFDs) in March 2020 you would now have $10
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Read more about Bitcoin
Who should include Bitcoin in their portfolios?
- Cryptocurrency traders: Bitcoin is the most well-known cryptocurrency, and therefore, many crypto traders buy it as part of their cryptocurrency portfolio.
- Long-term investors: While still considered an extremely volatile and risky market, Bitcoin has shown tremendous price increases over time. Therefore, those who believe the overall trend will be positive could consider a Bitcoin investment.
- Day traders: BTC prices can often have significant price swings over the course of a few hours. Traders can try to take advantage of these movements in an attempt to generate short-term profits.
- Blockchain enthusiasts: Since Bitcoin is the first major application of blockchain technology, those who have faith in the technology and its potential impact on the tech and financial industries, could consider buying Bitcoin.
What drives Bitcoin’s price?
Bitcoin is a highly volatile instrument that has experienced tremendous price movements over the years, sometimes gaining hundreds of percentage points or crashing significantly over a relatively short period of time. While it is less affected by happenings in mainstream markets, it can be affected by a variety of factors relating to the crypto space, the blockchain industry and by regulatory issues. Here are a few examples:
- General crypto trends: In late 2017, cryptocurrencies were heavily debated in the media. People, who previously hadn’t heard of the crypto, started asking how to buy Bitcoin. This sparked a massive crypto bull run, which peaked in December of 2017 when nearly all the major cryptos reached record highs.
- Mainstream market volatility: Bitcoin and the rest of the crypto industry operate separately from other markets. Therefore, when mainstream markets are on the decline or become too volatile, some traders and investors turn to the crypto market as an alternative.
- Traditional financial institutions: Over the years, there have been several attempts to introduce Bitcoin into mainstream markets in the form of ETFs, futures contracts and other financial instruments. Since many of these instruments require regulatory approval, traditional regulatory bodies, such as the US Securities and Exchange Commission (SEC), could have a major impact on the market, whether they approve or deny such instruments.
- The blockchain industry: Some experts believe that blockchain has the potential to revolutionise many areas of the technology and financial industries. Bitcoin is the first and one of the largest blockchain networks in the world, and as the technology becomes more widespread, more people might be inclined to buy BTC.
Bitcoin: Miners and Forks
However, miners have another key role. When the Bitcoin blockchain network needs to undergo a change or an upgrade, it needs the approval of its members, which can signal whether or not they approve the change. If the change is significant and makes the platform backward compatible, it is known as a hard fork. When not enough participants approve the change, a hard fork results in a parallel blockchain network being created.
Such was the case with the Bitcoin Cash hard fork in August 2017. With this hard fork, a group of developers intentionally rolled out a protocol they knew would be rejected by some members of the network, hence creating a hard fork and a new cryptocurrency. Bitcoin Cash became incredibly successful, reaching a market cap in the billions and becoming a top 5 crypto.
History of Bitcoin
As Bitcoin became more popular, numerous other cryptocurrencies were created. Some were built on the same technology, while others created blockchain protocols of their own. However, despite growing competition in the crypto space, Bitcoin has maintained its place as the world’s largest crypto by market cap for many years.
Why hedge funds have predicted bitcoin value to reach $1M?
The bitcoin price, up around 50% since January to $11,400 per bitcoin, has rallied in line with equity markets since a coronavirus-induced crash in March.
Now, after the bitcoin and cryptocurrency community was set alight by a bold $1 trillion market cap prediction from a major Tesla investor last month, a former Goldman Sachs hedge fund manager has said the bitcoin price could hit $1 million in as little as five years—a whopping 10,000% increase.
"I think [$1 million per bitcoin is] about right; whether it’s five years, six years," Raoul Pal, the founder and chief executive of Global Macro Investor, told Stansberry Research in a recent interview, published on YouTube.
"Just from what I know from all of the institutions and all of the people I speak to, there is an enormous wall of money coming into this," Pal said, pointing to "coming" improvements in "the pipes" that will allow investors to buy bitcoin as the driver behind the expected investment.
"It’s on everybody’s radar screen and there’s a lot of smart people working on it," added Pal, who revealed he has now dedicated more than 50% of his portfolio to bitcoin.
Bitcoin has been pushed into the limelight in recent weeks by a number of high-profile companies investing in the cryptocurrency, with payments company Square, led by Twitter chief executive and outspoken bitcoin advocate Jack Dorsey, buying $50 million worth of bitcoin—1% of its cash reserves.
"My trading positions are relatively small, because I don't think there's as much opportunity as there is in bitcoin. So really, mainly, a bit of cash, some gold, and bitcoin," Pal said. "And I'm even toying with the idea of selling my gold to buy bitcoin, more bitcoin."
Meanwhile, other bitcoin and cryptocurrency proponents have also been out in force over recent weeks, talking up bitcoin's prospects.
"Investor activity is picking up considerably with various on-chain metrics and ongoing—and heightening—global political, economic and social turbulence suggesting that there will be a [bitcoin] price surge before the end of the year," Nigel Green, chief executive of independent financial advisory deVere Group, said via email, pointing to "an avalanche" of interest in bitcoin in recent weeks from "household-name investors."
"Like gold, bitcoin can be expected to retain its value or even grow in value when other assets fall, therefore enabling investors to reduce their exposure to losses. Investors will increase exposure to decentralised, non-sovereign, secure digital currencies, such as bitcoin, to help shield them from the potential issues in traditional markets."
Earlier this month, another Goldman Sachs veteran, the former billionaire hedge fund manager-turned bitcoin and cryptocurrency investor Michael Novogratz, warned Goldman it will soon be scrambling to catch up with its head start in bitcoin and crypto.
[Credits: Billy Bambrough on Forbes.com - 10/2020]
Conclusion: Can Bitcoin remain the king of cryptos?
*Cryptocurrencies can fluctuate widely in price and are therefore not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework.
*This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation.
*Past performance is not an indication of future results. Your capital is at risk.