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With so much speculation around Cryptocurrencies, it seems like trading in virtual currencies is only gaining traction. Cryptocurrencies are a new asset class that is still finding their way into the financial mainstream. They’re also notoriously volatile, which can make trading them challenging for those who are just starting. However, high volatility doesn’t mean trading in virtual currencies can’t be profitable. In fact, over time, most crypto assets have demonstrated a tendency toward market stability—usually after enduring several troubled initial phases. This presents an excellent opportunity for traders looking to capitalize on long-term trends and invest in established market leaders. Here are five reasons why Bitcoin trading is gaining traction:
Institutional Demand is Rising
The trading of Cryptocurrencies has seen a huge spike in popularity as of late. Trading volumes skyrocketed throughout 2017, then skyrocketed even further in the first quarter of 2018. The surge in trading volumes was driven by a growing number of financial institutions investing in Cryptocurrencies. As the world’s first fully-decentralized asset class, Cryptocurrencies offer a promising alternative to financial institutions. According to a report published by Cambridge Analytica, one in five financial institutions has now invested in Cryptocurrencies. What’s more, a growing number of Fintech startups are also offering trading platforms that cater to traditional investors.
Bitcoin Trading is Now Profitable
While trading Cryptocurrencies remains highly experimental, the market is improving. As more and more investors jump into the market, however, trading volumes have also grown. This growth in trading volume has enabled more professional investors to enter the crypto space. For example, crypto broker Robinhood has seen significant growth in trading volumes since expanding its crypto selection in February 2018. The high demand has led to tremendous growth and development of Crypto Engines and other trading platforms.
Privacy Coins Are Getting Popular
With Cryptocurrencies now seeing trading volumes rise, the market has also expanded. As an asset class, Cryptocurrencies are now seeing a growing number of privacy-oriented assets enter the market. Privacy coins are Cryptocurrencies that attempt to provide users with greater anonymity. The popularity of privacy coins has risen in recent years as governments have increasingly sought to track the flow of private assets. Many investors view Cryptocurrencies as a haven for assets that are at risk from government scrutiny. Indeed, crypto markets have now seen a rise in popularity for privacy coins, which have seen increasing investment activity.
Increased Regulatory Comprehension Is Driving Up Asset Values
Throughout 2017 and the first half of 2018, the global regulatory environment surrounding Cryptocurrencies continued to evolve. More specifically, more governments and regulatory bodies have begun to acknowledge the existence of virtual currencies. This increased regulatory comprehension is driving up the asset values of established and new Cryptocurrencies alike.
Blockchain Is the New Superhero for Traders
The trading of Cryptocurrencies has seen an increase in popularity as a means of investment. Many financial experts have even touted blockchain as the next big revolution for the financial industry. With more and more regulatory bodies publishing blockchain guidelines, the technology is now finding increasing applications in the traditional financial space. The research firm MarketsandMarkets estimates the blockchain market to be worth $500 billion by 2024. Investment in the blockchain is expected to rise as a result of increasing institutional demand for the technology.
Conclusion
Cryptocurrency trading has grown steadily since the early days of the financial blockchain revolution. However, the majority of trading is still taking place on exchanges that are unregulated, resulting in a high degree of risk for traders. To fully participate in the booming cryptocurrency market, investors need to be able to trade directly on major cryptocurrency exchanges. By trading on a regulated exchange, traders can ensure greater safety and security. Regulated exchanges are governed by strict rules and regulations, making them a more reliable place to invest your money. With greater trading safety and security, investors can now fully reap the benefits of this growing market.
