Guest post from the Capital.com team.
Recently the cryptocurrency market has been very hectic, impacting the prices of cryptocurrency. We saw Bitcoin move between $10,500 and $11,500 during the last week. The news seems to be favouring crypto sceptics rather than crypto optimists.
South Korea, one of the greatest among the cryptocurrency development countries has reportedly banned government officials from holding and trading cryptocurrencies. Earlier this year government employees from the country were involved in insider trading and manipulations of the market. Coinbase as well faces a lawsuit regarding alleged insider trading.
Another major issue is that Bitcoin recently faced is the significant drop in the amount of transactions made. More investors now are long term oriented. Hence, it is now confirmed that 30 percent of all transactions are made with support of Segregated Witness (SegWit), however traders are mostly focused on the potential gains rather than reduced transaction costs. According to Blockchain.info, the current market situation led Bitcoin to a 2 years low amount of transactions per day, which is 2 times lower than maximum, reached in December 2017. However, it is worth mentioning that popular cryptocurrency exchanges such as Binance, Bitfinex, and Kraken reportedly adopted SegWit.
At the same time when the amount of Bitcoin transactions drops it creates apprehension on the market, the reports that the Securities and Exchange Commission is conducting an investigation initial coin offering only makes it worse. The SEC is reported to focus on sale and pre-sale of tokens, and mostly on SAFT (simple agreements for future tokens), which according to the structure is similar to an IPO, however it does not comply with the rules assigned to the market.
According to the data from the Capital.com platform, we see a drop in the amount of trades made with Bitcoin, around 30% less, compared to February. Users appear to have been worried about the news from the SEC, announced on 1 March. In reaction, they almost doubled amount of short positions opened on the day the news was announced. Also there was a drop in trades by more than 50% from February and more than 30% from previous day. Now we see that the amount of trades still did not recover. Currently, less short positions are being opened and the amount of long positions is slowly starting to grow. Since the reported data on the 1st of March, the amount of long-position trades grew by more than 40%.
Regulation of cryptocurrency appears to be in its early stages, which brings the possibility for any manipulations on the market and can cause volatility. Such an unregulated condition does not attract institutional investments because large funds do not receive any security or protection on their investments.
With Capital.com it is possible to benefit, not only from price growth, but from price decline as well. Opening short (sell) positions on CFD (contract for difference) platforms, like Capital.com, is one way to do so. The benefits of trading CFDs on cryptocurrency with Capital.com include segregated accounts, account security and broker services, which are regulated by a financial regulator.
It’s important to remember that you trade at your own risk. You can lose all your invested capital once you begin trading. Do not, in any circumstance, trade with money that you can’t afford to lose. It’s worth noting that trading is risky and you should not trade with money you can not afford to lose.
Capital.com is a fintech startup providing an AI-powered trading platform designed to take trading to the next level. Available on both desktop and smartphone, the trading platform lets users trade CFDs on the world’s top markets including Forex, cryptocurrencies, commodities, indices and more. The company received a $25 million investment from VP Capital and Larnabel Ventures. Capital.com is licensed by CySEC