All you Need to Know about Cryptocurrency

All you Need to Know about Cryptocurrency

What is Cryptocurrency? 

Cryptocurrency or crypto for short is decentralized digital money, which was designed by Satoshi Nakamoto in 2009 to be free from government control, as a solution for personal financial independence. Cryptocurrencies are generated by their own blockchains like Bitcoin and Litecoin. On the other hand, tokens are issued within smart contracts running blockchain such as Ethereum.

The most familiar versions of crypto out of a large variety, which exceeds more than 2000 types, are Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP). Bitcoin is considered to be the leader with its market cap and volume of $580 Billion and $78 Billion, respectively.  Cryptocurrencies have expanded dramatically after the launch of bitcoin over a decade ago. It became more popular, its value started to rise, and made steady progress throughout the middle of the decade. 

What is the History of Cryptocurrency? 

The market of cryptocurrency is based on supply and demand; thus, it fluctuates widely. For instance, Bitcoin has experienced rapid spikes in December 2017 at $20K. In the very next month, it fell in value to $7K, and the next year to $3K. Most recently, on December 16, 2020, Bitcoin has broken a very strong resistance point to reach $20,600 for the first time ever. It gained in a year more than 180%. As of now, BTC has managed to reach a record high of $35K.  

Many economists and financial experts expect that the later spike is unlike the one which occurred in 2017. This is because the recent rise was driven by institutional buying rather than individual traders and speculators. Additionally, it was said due to the decreases in mining bitcoin, as the supply of Bitcoin is shrinking every year. 

Cryptocurrencies Market Cap and Volume

As the chart below shows, the total market cap for the whole crypto market is $860 billion. Bitcoin consists of around 60% of the market cap. The volume of cryptocurrency is increasing dramatically. Therefore, it is important to mention the weird relationship between the market cap and volume, which is not perfectly linear like the traditional stock market. This interesting relationship may be justified by the inefficiency and the immaturity of the cryptocurrency market and might be modified accordingly with time. 

How to Buy or Trade Cryptocurrencies? 

Dealing in cryptocurrencies can be directly through an exchange or a forex broker. The exchange agency will give you the chance to buy and directly sell the coin physically, by creating an exchange account, and waiting for the token to rise in value to sell.  

While in forex, cryptocurrencies are obtained through CFDs (Contracts for Differences). INGOT Brokers offers Bitcoin Cash, Bitcoin, Ethereum, Litecoin, and Ripple which are the leaders in the market. Traders can always trade cryptocurrency by opening an account, and a partial contract can be bought and sold for speculation purposes. 

To sum up

Cryptocurrency is still new to the market and contains high-risk exposure. However, it is still exciting for traders for the quick spikes and slides, which adds a new element to currency trading. Remember, being aware of the market events affecting the blockchain and the other similar cryptos correlation are important for your trading success.  

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