Cryptocurrency trading is an increasingly popular market among professional traders. Bitcoin BTCUSD serves as an indicator for the rate between this renowned digital coin and the US dollar.
Institutional money has been an influential force behind BTCUSD over the course of 2020-2021, but uncertainty regarding regulations could cause its value to decline.
It is a CFD
Contract for Difference (CFD), also known as Contract for Difference, is a derivative financial instrument that allows traders to speculate on the price of an asset without actually owning it, using leverage as an advantage that can lead to significant profits. CFD trading options include stocks, indices, commodities and interest rates as well as Cryptocurrencies.
Bitcoin BTCUSD saw strong gains in 2020 due to several positive forces. These included a weakening US Dollar, government stimulus packages and the May 2020 halving event that reduced mining rewards; further strengthening this bull run was the entry of large institutional money into cryptocurrency space.
However, in 2021 the rally started to slow due to investor worries over potential regulation that could threaten decentralisation and blockchain technologies. Furthermore, negative comments by US Treasury Secretary Janet Yellen led many traders to take profits at once. Cryptocurrency CFDs carry an elevated level of risk and may not be suitable for all investors.
It is a crypto-to-fiat currency pair
The BTC/USD pair symbolizes one of the world’s premier cryptocurrencies, Bitcoin, against one of its most influential fiat currencies – the American dollar. The pairing demonstrates how many dollars (quote currency) it takes to purchase one unit of Bitcoin (base currency).
This pair offers traders who wish to contribute towards shaping the future of digital currency and payments an excellent opportunity. Furthermore, gold offers an effective hedge against inflation and fiat currencies that provides further security against volatility in digital currency markets.
Technical analysis suggests the pair has been trading just above its 2017 highs. Furthermore, prices are trading above both 50% retracement level and the 1.618 Fibonacci extension level; meaning volatility could rise either way.
It is a digital asset
Digital assets encompass everything from cryptocurrency such as Bitcoin USD (BTCUSD) to software code, digital music files and film clips, non-fungible tokens (NFTs) and non-fungible tokens (NFTs). As these assets become increasingly valuable to innovative businesses, we are at the forefront of providing advice regarding relevant laws and regulations surrounding them. Our team includes attorneys with hands-on technical knowledge in crypto/blockchain technologies as well as comprehensive knowledge about applicable regulations.
In 2020, BTCUSD saw gains due to various factors that lured investors into the crypto space. Major companies like Tesla and MicroStrategy Incorporated invested heavily in cryptocurrency, leading institutional money into the market and hastening its bull run. Yet uncertainties exist within the crypto industry which could derail it; for example any US Securities Exchange Commission action which interferes with fundamental concepts of Bitcoin or blockchain may cause investors to exhibit pessimism about BTCUSD prices.
It is a crypto-to-crypto pair
Trading pairs between cryptocurrency allow traders to exchange one cryptocurrency for another. At present, Bitcoin against U.S. Dollar remains the most widely-traded pair; however, as new cryptocurrencies come onto the market this might change quickly. Therefore, it’s crucial that traders understand how cryptocurrency trading pairs function so that they can make informed decisions for their portfolios.
The US Federal Reserve is one of the primary forces influencing BTCUSD prices. Any interest rate increase could push prices lower while any decrease could give it an uptick. Other important influences include government regulations and headlines about cryptocurrency-related topics.
Early cryptocurrency exchanges traded exclusively crypto for crypto. But due to an increasing need for secure hedges and stores of value, fiat currency base pairs were later created. These pairs allow users to buy and sell cryptocurrencies against a specific amount of their local fiat currency (such as Tether (USDT), USD or Bitcoin). Many exchanges also offer pairs between various cryptocurrencies.
