How to operate with Bitcoin in Spain?

It is the question that hundreds of users who enter the universe of cryptocurrencies for the first time are asked daily. 

Whether you are taking your first steps in the trading ecosystem or want to review some key concepts, in this post we are going to tell you what Bitcoin trading is and some short and long-term strategies. Are you new to cryptocurrencies or blockchain technology? Would you like to know the basics of BTC trading? 

Join us in this post and don't miss any detail.

What is BTC trading?

Talking about cryptocurrency trading is talking about buying and selling financial assets with the aim of making a profit. It refers to short-term trading, where traders enter and exit their positions in small intervals of time. That is, they take a financial position based on the price of a virtual currency through derivatives such as CFDs or contracts for difference.

You see, to trade BTC, many traders buy the cryptocurrency directly on an exchange or P2P platform and start trading derivatives (ETFs, CFDs, etc.). The most common strategy used by users is to buy Bitcoins at a low price and sell them when it increases. However, it should be remembered that trading is specialized in buying and selling assets quickly in order to obtain a high percentage of profits.

The Bitcoin trade has become an increasingly popular trend and generally takes place in the short and medium term.

The Bitcoin market

Aside from being the first cryptocurrency to hit the market in 2009, Bitcoin is a very volatile virtual currency. This volatility has been triggered by its very high demand, which has led to a previous price escalation. For this reason, many people continue to choose Bitcoin as the main option to invest in cryptocurrencies.

The jack, horse and king of every trader is to analyze market patterns and exhaustively monitor the news, news, events and activities that increase the value of the financial asset. In this way, they implement different strategies to generate returns in a short period of time. 

There are some key elements in the cryptocurrency market:

• Technical analysis (TA). Many know it as 'chartism' and refers to the historical study of the prices of an asset to predict its future behavior.
• Fundamental analysis (AF). It is a method used to calculate the real valuation of a financial asset and allows to know if it has the capacity to continue growing. 

Below, we have compiled the main factors that move the Bitcoin market:

• Availability

The high cost of mining in equipment, electricity and maintenance makes the sale of this cryptocurrency worthwhile for miners. If their value falls, they could stop mining or hold their coins until the value increases.

• Forks

Examples are protocol changes, known as hard forks. On the one hand, they can be planned, such as system improvements, and, on the other, unplanned, such as security breaches.

• Government and changes in laws

Cryptocurrencies are still a new concept for governments, so the regulatory path is very slow. However, there is a changing scenario in the policies and laws that affect its price.

• Assessment

The cryptocurrency market is made up of supply and demand (sellers and buyers). If there are more users who want to buy Bitcoin, the price will go up normally. However, the demand is also influenced by the number of platforms that allow trading the cryptocurrency.

• Uses

Bitcoin was created to be used as an alternative form of currency, unlike Ether or other different cryptocurrencies. Therefore, users appreciate the value of negotiating with it, as well as paying it so that it can continue to increase with the current demand in the market.

• Negotiators 

There are different ways to have and use bitcoins, from making a purchase to storing them and the price going up. Then, they are sold or exchanged for euros, dollars or other currencies. 

• Demand and supply

They are two factors that, inevitably, always affect the price of something, such as Bitcoin and other cryptocurrencies. If you want more Bitcoins, then more must be mined, and that's the main reason miners continually mine. However, the price depends on demand and supply equally.

Knowing these factors will allow you to know when is the best time to invest. As you know, Bitcoin operates without a centralized bank that regulates the currency's valuation. It works in a decentralized way, where the miners offer computing power to generate and verify transactions, while the nodes keep a complete record of all the operations of the network.