BTCUSD stands for Bitcoin’s pairing against the US dollar and is projected to remain a primary price driver until 2021 after major institutions such as Visa and PayPal made significant investments into it.
Cryptocurrencies like Bitcoin do not rely on central banks and are driven solely by demand, making them an excellent safeguard against government intervention.
What is Bitcoin?
Bitcoin is digital money that allows people to safely exchange value over the internet without the need for a central authority. First introduced in 2008 by Satoshi Nakamoto – an Asian-sounding pseudonym for someone or some group who wrote a white paper outlining its blockchain system – bitcoin has no physical existence, yet people willingly trade it for goods and services; its value can be divided up into smaller units called Satoshis which are equal to 0.00000001 bitcoin.
Bitcoin transactions are recorded in an open-sourced public ledger known as a blockchain, and its price fluctuates as traders buy or sell it on marketplaces that accept it as payment for goods and services. Like other currencies, its price fluctuation depends on six characteristics such as acceptance, portability, divisibility, durability, fungibility and scarcity – similar to how other monetary units behave. You can earn Bitcoin either through mining it yourself or buying it on open exchanges; additionally it’s used as payment for products and services online as payment for goods and services bought online as payment for products and services purchased online via digital means such as mobile payment on websites.
How does the BTCUSD pair work?
Cryptocurrency trading pairs involve exchanging one cryptocurrency for another. The base currency in these pairs is often US Dollars (USD), as it’s the world’s most prevalent fiat currency.
Value in pairs of assets is determined by price movements between their two assets, for instance the USD’s exchange rate with Bitcoin will fluctuate due to changes to its monetary and political environment, good news impacting it will drive it higher while bad news could send it plummeting.
AvaTrade provides traders with access to an expansive selection of cryptocurrency trading pairs, such as BTC/USD. Each pair maintains its own order book so traders can offer to buy or sell one or both assets associated with that pair. Pairs can be highly volatile; when selecting an asset pair to trade carefully consider your risk profile before selecting your trade pair(s).
What is the future of BTCUSD?
Bitcoin has had a difficult start to 2021, yet is projected to bounce back and resume its bull run. One key reason is an influx of institutional capital coming in through Tesla and MicroStrategy Incorporated among others who are buying crypto assets as an insurance policy against fiat currency and inflation risks.
Experts agree that Bitcoin may eventually replace traditional currencies. This is likely because its widespread acceptance makes it easy to use on an everyday basis; Winklevoss twins, for instance, have invested over $1 billion into this cryptocurrency.
Cryptocurrencies remain highly unstable and could face regulatory pressure in the near future, which may threaten their value proposition and cause price retraction. As such, traders should keep an eye out for news headlines which might influence BTCUSD price movements.
How can I trade BTCUSD?
Bitcoin differs from traditional fiat currencies by being uncontrolled by any central authority and therefore its value is determined by how much buyers and sellers are willing to pay and accept respectively – making it highly volatile asset and capable of large returns – but also losses.
Trading BTCUSD involves an elevated degree of risk and may not be suitable for everyone. Please ensure you fully comprehend any associated risks before beginning.
Many of the same strategies that work for forex trading also apply to cryptocurrency trading, including using price charts and indicators such as On Balance Volume (OBV). A useful indicator for cryptocurrency traders is to compare Bitcoin prices with Ethereum prices – when one breaks out it may indicate similar movement in Bitcoin as well.
