Recent years have seen the cryptocurrency market gain marked attention from the mainstream world. The market may have experienced regular fluctuations, but time and again, experts have expressed confidence that Bitcoin and other digital currencies are gaining ground. As recently as towards the end of 2022, there were predictions that a bull market was on the horizon.
Now is an exciting time to ask, “How do I start cryptocurrency trading?” The Bitcoin bull market is on after some period of a downward trend. With seemingly a sigh of relief in the crypto market, it is now time for investors to strategize for normalcy. However, there are still points to keep in mind.
Bitcoin, Still Valuable
Bitcoin may have lost a big chunk of its original value, but its strength is still indisputable. That’s why it is in the thick of things in this bull market. As of the time of writing this article, the market cap for this coin was $384.24B. Bitcoin may have lost over 60% in price in 2022, but its returns in the last eight years are remarkable – at least 4,400%!
It is no wonder that when most investors are starting, they first trade in or learn about Bitcoin. Being the most valuable and oldest is an advantage, but the financial infrastructure behind the coin is also instrumental. Only time will tell the heights the coin will soar to when all the obstacles are finally cleared.
The Latest Bitcoin Surge
A few hours ago, the currency advanced for the umpteenth time, contributing to a rise of at least $1 trillion in the overall market cap for cryptocurrencies. This is the first time that the market cap has reached this level since November 2022. The impressive crypto gains are influenced by news of lowering inflation in the United States.
Bitcoin’s performance can be attributed to news that inflation has been easing between December and January. That the Federal Reserve could be contemplating reducing the interest rate even further means that the digital currency could gain even more ground in the coming days.
Just a couple of days ago, speculations were rife as to what the market would look like next. Unlike its nature, Bitcoin demonstrated low volatility. There were questions about whether this was a sign of an oncoming long-term status. Or whether the value of the digital coin would implode after the calm.
Investors who foresaw a bullish market and did the necessary are now full of excitement. Those who chose to focus on the unique presence of relative volatility compression (something that had just occurred five times before) can now reap happily.
A look at the bear market of 2018 shows such signs. A bull market rally would follow in 2020. Therefore, strangely low volatility can be an indicator of a rally in the opposite direction. So, one may want to bet on a bull market and invest.
Steps to Take in 2023
The first step is to know where to buy Bitcoin. A crypto exchange is the first stop because this is where the exchange of coins takes place. There are so many options here so it pays to do a bit of research. Also necessary is a crypto wallet – the place to store the Bitcoin. Note that some Bitcoin exchanges may not offer wallets.
Given that Bitcoin, like other cryptocurrencies, can be extremely volatile, a coping mechanism in the form of dollar-cost averaging is recommended.
Then there is the idea of diversifying the digital currency portfolio. Like one would do with any other investment, managing the risk of a Bitcoin investment is worthwhile.
Despite the lowering of US inflation, no one can say with certainty what is going to happen in the stock market for the rest of 2023. But the hope is that things will continue to improve – which is something every investor should set themselves up to gain from. Bitcoin, being one of the more established coins, usually offers a safer investment haven for investors looking to safeguard their holdings. With the current soar of Bitcoin, the first cryptocurrency is worth considering.