The BTCUSD pair combines one of the world’s leading cryptocurrencies – Bitcoin – with one of its most influential fiat currencies – US Dollar. Traders follow this pair closely to speculate on Bitcoin’s technology future and predict its eventual demise.
Experienced currency traders are adept at trading all major pairs. However, BTCUSD market stands out as it involves pairing two non-fiat currencies together.
It’s a CFD
CFD (Contract for Difference) is a derivative product that allows traders to speculate on the direction of an asset without actually owning it themselves. Crypto CFDs can be traded with leverage, which increases profits but also risks and loss potential.
Bitcoin and other cryptocurrencies are highly unpredictable assets, with CFDs on them subject to sudden price changes and possible losses. Therefore, it’s essential that traders recognize this risk and trade responsibly.
Bitcoin remains one of the world’s leading global cryptocurrencies, so its adoption will likely remain one of its primary drivers for price movement. Other factors, including institutional money entering the space and companies like MicroStrategy Incorporated and Tesla investing heavily could also provide a boost. Companies like these could potentially drive Bitcoin prices higher – leading to further bull runs and sending prices higher still.
It’s a Cryptocurrency
Bitcoin (BTCUSD) is a digital currency designed for secure peer-to-peer transactions on the internet, first detailed in 2008 in a white paper written by Satoshi Nakamoto and launched officially in 2009.
Cryptocurrencies have gained global renown due to their potential as safe havens during times of economic instability. Beyond being used as a store of value, cryptocurrency payments are also frequently accepted on Dark Web marketplaces like Silk Road that sell guns and drugs illegally.
Cryptocurrencies have come under intense regulatory scrutiny as governments struggle with how best to regulate them effectively, leading to some criticize them and even take steps towards banning them altogether. This has caused many investors to lose trust in cryptocurrencies and has likely contributed to its 2021 pullback for BTCUSD.
It’s a Pair
Currency pairs are an indispensable form of trading instrument on both crypto and fiat markets. A pair of BTCUSD means Bitcoin serves as the base currency while USD serves as its quote currency, allowing traders to buy one currency while selling off another one when buying and selling pairs.
Cryptocurrency trading pairs tend to be more volatile than their fiat counterparts due to cryptocurrencies’ strong correlation among themselves, meaning a strategy which works for one pair may not work with another.
BTCUSD pair can be heavily impacted by news pertaining to both the US Dollar and Bitcoin. A stronger USD can put pressure on its value; on the other hand, positive press coverage of crypto (such as companies accepting it more freely) could push it upward. Therefore it’s vitally important to stay abreast of both news related to both currency pairs as these factors drive overall market sentiment – ultimately impacting how this pair moves.
It’s a Market
Just like any market asset or currency pair, Bitcoin’s price can fluctuate depending on a number of fundamental factors, including popularity, demand and network operability. Furthermore, its worth can also be heavily affected by public sentiment in the cryptocurrency scene and how strongly global community believes in blockchain’s future.
Rumor has it that several large cryptocurrency holders, or whales, control two percent of all available crypto supply; their movements having a large influence on price fluctuations. Furthermore, any news about regulations has an effect on BTCUSD; positive updates tending to drive it higher while negative ones often push it lower.
The US Federal Reserve also plays an influential role, as its interest rate decisions directly affect the USD. A rate hike will put pressure on the pair, while cutting rates can provide opportunities to gain ground on your competitors. Therefore, it’s crucial that you stay abreast of all developments related to both central banks.
