Before you start investing in the digital currencies, you have to understand quite a few things. Unless you are not fully clear about trading, you should not jump in this market and put your money at risk. You want to start a trading career to make money, not to gamble with it. Now, when it comes to trading cryptocurrencies, bitcoin remains the most investable and attractive cryptocurrency out there. In addition to people investing in it every day and profiting from short-term trades, you have people who want to hold this coin for a long time.
If you are looking for the benefits of holding bitcoin for a long-term, you should check out this Xtrgate. After you have learned a few preliminaries, you will know about the way to invest in and hold on to your bitcoins for the long-term.
The Motive behind Holding Bitcoin for the Long-term
There are many reasons why people want to hold on to bitcoins for a long time. First of all, they believe this is still the only cryptocurrency that’s reliable. Despite the big claims that other cryptocurrency developers make, bitcoin remains the strongest after so many years. It is soaring high to this day and the value of this digital coin is unmatched. The best thing about Bitcoin is that it has remained that way since forever. There has never been a time when any other cryptocurrency excelled and beat bitcoin in terms of its value. So, looking at this strong performance that has lasted for several years, people feel confident in investing their monies in bitcoin in the long-term.
Another important factor that you have to consider like other traders do is the volatility of the cryptocurrency market. The cryptocurrency market is extremely volatile and day trading can be a risky game here. You might not know but Bitcoin has moved by up to 20% of its price in just a few hours in the past. You are looking at either huge gains or huge losses when an asset moves this much in such a short time. This is what pushes away many traders from investing their money for the short-term. They think a small move can cause them a lot of damage.
Of course, the market can move in any direction. If the volatile market moves in the direction as you had predicted, you can end up with huge profits as well. However, holding on to a position for a long time gives you a lot of time to think about your move. If you see a certain pattern in the price of the asset, you can take your decision based on that. For example, you can predict that the price has remained the same way for several months and no sudden spikes are predicted. If that’s the case, you can use your position and close the trade.
The Reason for Using Leverage for Bitcoin Trading
This is where an important point needs to be covered. When you talk about leverage in cryptocurrency trading, you have to know that you are not talking about trading the real crypto asset. What does that mean? Well, if you had to trade bitcoin by owning it, you would not be able to do it because of the huge value associated with it. For that reason, online brokers allow you to trade this cryptocurrency through CFD trading. In this type of trading, you do not have to own bitcoin to trade it. In other words, you can trade smaller quantities of the asset to fit the trade in your budget.
In addition to that, your broker wants you to make huge profits. You cannot make a lot of profits when you are trading only $1 worth of bitcoin and your total investment in the trade is just $100. Even if the price of bitcoin increases by 5%, you will not see a huge gain. That’s where leverage comes in. You will use leverage from your broker and trade $10,000 worth of bitcoin or even more. That’s the power of leverage and if you use it the right way, you can soon put yourself on the path to becoming a millionaire.
How You Can Hold a Long-term Bitcoin Position
You should understand from the previous passage that only an online broker can help you with this endeavor since the broker is the only entity that allows you to trade bitcoin CFDs. You are not owning bitcoins at any point, you are just using CFDs to trade some value of bitcoin. The broker will also make some contribution in the form of leverage. You will know about the leverage from the website of the broker. If you see a ratio on the website, you can assume that it is leverage information. The broker tells you about leverage in the form of a ratio i.e. 1:10, 1:20, or 1:100.
Now, at this point, you have to see if the broker you have signed up with provides you with the option of holding on to your position for a long time. Usually, online brokers allow you to day-trade, which is a form of trading in which you open and close your trading positions in a single day. If you want to hold on to your crypto assets for a long time, you might have to do some research to find the right broker. However, you will also have to familiarize yourself with funding, which is the fee you will be paying to the broker every day for as long as you hold the position.
Whatever you do, you have to make sure that you choose the right platform for trading cryptocurrency or bitcoin CFDs. You cannot trust the first broker you encounter because there are more frauds in this industry than you might realize. Furthermore, you have to know your trading style before you hold on to bitcoins for a long time. If you are well-aware of the various trading tools and how they work, you can make a lot of profit from day-trading as well. In fact, most brokers prefer that you day-trade and become a professional trader through small trades and risks.