Binary options and bitcoin are a new trend of 2017 in binary trading. Classic assets are not as profitable as the developing cryptocurrency. Because the appearance of the binary brokers new tool is not only a logical step, but the opportunity to capitalize on a strong trend.
I think many people have heard the legend about how in 2010, US residents ordered pizza for 10 000 bitcoins. Today, the cost is equivalent to 10 million USD, and the cryptocurrency has become the most profitable investment of 2016, showing growth of nearly 300% and ahead of U.S. and European treasuries, the U.S. dollar and even gold.
From 1 April 2017 bitcoin became legal tender in Japan along with the yen. From day to day, investors expect the emergence in the United States of the first ETF Fund investing in cryptocurrency. Despite the fact that in the US bitcoin is considered a financial investment instrument, in March SEC has blocked the creation of the Fund. While negotiations and the elimination of the comments of the commission continues, but it is already clear that bitcoin will soon take the place of one of the most promising tools. This means that in 2017 cryptocurrencies have a chance to gain another 50-100%.
What is Bitcoin and the history of its appearance
Bitcoin is a payment system using the payment instrument unit of the same name. Cryptocurrency does not have a single emission center, and is produced through mining. Separate transactions are generated in a special structure — blocks, and the procedure is called blockchain.
Bitcoin became the first cryptocurrency, emerged in 2009, but the name of its creator remains unknown. The mechanism of emission is limited, because every year mining (bitcoin issuance) is becoming less profitable. But increasing the price of the cryptocurrency today, and its growth can earn more than for emissions. In previous articles we have already partly revealed the concept of bitcoin and its prospects:
- here you will learn why only bitcoin has the right to be called a cryptocurrency and why it, and not Litecoin or OneCoin will be interesting to traders;
- this article analyzes the dynamics of quotations of bitcoin since its creation and identify the key drivers of growth and depreciation. Those who are going to work with bitcoin binary options, analysis will be useful;
- here you will learn the opinions of professional investors working with bitcoin since 2009.
In these articles you will learn about the legislative aspects in relation to bitcoin and about what will happen to cryptocurrency in the future. Buy bitcoin on special exchanges, but it’s easier to make a prediction of its price in binary options. Even if the bitcoin price will rise by only 10-20%, a correct prediction will bring up to 90% of profit.
Factors influencing the exchange rate of Bitcoin
Since bitcoin does not have its own emission center and not recognized as money (except Japan), the impact of the economic laws for money is not standard. Main factors of influence:
- China’s policy towards bitcoin. As China has more than 80% of the global turnover of cryptocurrency, any attempts to ban or limit anonymous withdrawal of capital lead to price decrease;
- the perception of bitcoin by institutional investors and companies. During the crisis, bitcoin serves as a protective asset. Any news that someone started to accept payment in bitcoins or planning to invest large sums of money, raises the rate;
- speculative. With the rapid growth in the trade includes those who are poorly versed in its causes. It is not advised to make predictions on bitcoin in the short term at the time of active growth or decline.
How binary options of cryptocurrency work
Binary options and bitcoin have the same principle of trading, and trade with other assets. The exchange rate of bitcoin depends on more fundamental factors, technical analysis will not give accurate signals as bitcoin general economic laws apply only indirectly. A few tips on how to trade cryptocurrency:
- do not place a short expiry time. Even the strongest trend in a short period of time is zigzag-like. Optimally — a few days or months;
- do not trade in the flat;
- follow the news (primarily from the USA and China);
- read the specialized forums, dedicated to the cryptocurrency, there are a lot of hints about the prospects for quotes.
The principle of operation of cryptocurrency binary brokers is similar to any other asset. Ticker of asset – the PTS. For trading with binary options for bitcoin with brokers who provide this service, choose a couple of BTC/USD and make your prediction after setting the period of expiration.
Brokers working with bitcoin
Yet the few binary brokers allow you to trade bitcoin. The most progressive brokers:
- Olymp Trade. Broker, who offered a simple platform and optimum set of technical tools. Although the proposed yield on bitcoin is relatively small, to make a profit here is easier than with volatile currency pairs;
- Binomo. The broker offers the minimum bet (from $ 1), high yield of transaction and ensures no slippage.
And finally here is a practical example of a trade with bitcoin binary options. To do this, go to the platform, select bitcoin in the top menu (income — 45%) and the analyze the graph. It is volatile, but there is some law — wave motion in the minute period of time.
Although minute timeframe we did not recommend, in this case the price is in the flat, so you can try to make a prediction on the minimum or the maximum. Waiting for a maximum bet on falling prices.
The first forecast turned out to be unsuccessful, because in one minute the price has managed to not only fall, but come back to high — a vivid example of how difficult it is to trade in flat. By the martingale calculator make bet on 725 rubles.
On the hourly chart there are visible spikes and another of them just happened. However, the duration of the last burst is not more than 2 minutes, therefore make a prediction for the price drop, but the period of expiration should be set to 5 minutes.
Alas, that forecast also appeared to be unsuccessful. The price entered in an accurate horizontal position. Increase the rate to 2336 rubles and wait when the price will move at least some way. Open minute option for growth. Again, failure. Last bet on the entire amount of the deposit for growth – and the prediction is correct!
With this example we showed that:
- trade in the flat is very dangerous and fraught with losses. As bitcoin grows in the long term, then the expiration time should be put the more the better. Trade with minute options is almost unpredictable;
- the martingale strategy can bring income if you use it wisely. In the example we intentionally started with a large amount to show the possible consequences.
Summary. Binary options and bitcoin is the easiest way to make money in the long run. Unlike Forex, here a trader will not lose money from a temporary drawdown or closing a position by stop loss. Bitcoin has all of the fundamental reasons for growth in the near future, and this means that it is possible to earn good money! And how to do it, you know now! Write your comments after the article.