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Is it good to invest in Bitcoin in 2022? How to buy bitcoin and compare bitcoin trading platforms

2022-07-18

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Since May 2022, I believe that every cryptocurrency investor is talking about how the price of Bitcoin has plummeted in the market, and for Bitcoin investors, will 2022 be the year to invest in the Bitcoin market What's the best time?

In this article we will tell you how to invest in Bitcoin to make a profit in the market.

Is it good to invest in Bitcoin in 2022?

Bitcoin weekly trend K line (Source: CM Trade)

2022 is definitely going to be a tough year for Bitcoin, with plenty of financial analysts and pundits arguing that it’s only a matter of time before Bitcoin drops to $10,000 in 2022. It is undeniable that since the beginning of the year, the price of Bitcoin has been in a swamp of lower prices.

As of July, the price of Bitcoin was still hovering at the $20,000 mark, and even fell below $20,000. The data shows that the price change of Bitcoin was -5.73% on the 30th, -32.06% on the 60th, and -32.06% on the 90th. was -48.98%. Even though Bitcoin prices have shown signs of stabilization in the past seven days, the entire market is still not out of the danger zone.

For Bitcoin spot investors, Q1 and Q2 in 2022 will definitely be the worst period of their lives, but for those who invest in Bitcoin contracts, the slump in Bitcoin price is not lacking for a short Bitcoin Great opportunity.

What is the value of Bitcoin?

Source: Pexels (RODNAE Productionslesia)

Today we accept any currency in exchange for goods or services because we know that we can get what we need by transacting again with fiat currency. Fiat currency is issued and backed by the government, and the value of fiat currency lies in the relationship between supply and demand and the stability of the issuing government.

Bitcoin is similar to fiat currency, but the relationship between supply and demand determines the value of Bitcoin, and there is no intervention by the issuing government. So the value of Bitcoin comes from the trust of millions of people in cryptocurrencies, and as long as Bitcoin transactions exist, Bitcoin will have value.

In addition, with the popularity of the cashless transaction model, more and more people begin to accept the use of digital currency for transactions. In the future of electronic payment popularization, Bitcoin must also play an important role, and the value of Bitcoin is also will increase as the number of people using it increases.

All in all, the value of Bitcoin lies in the transaction value of replacing traditional currencies and the investment value in the financial market.

How to buy bitcoin? Investing in Bitcoin

Although Bitcoin has plummeted in 2022, it still costs about $20,000 to buy a Bitcoin at present, so investing in Bitcoin by holding the spot is to bear huge financial pressure. On the contrary, if you want to make a small investment, Bitcoin CFDs are undoubtedly the best choice.

Bitcoin contract trading is a type of margin trading, which uses the characteristics of leverage to open a position with a small investment. To put it simply, if the leverage is 1:100, and an investor wants to invest $20,000 worth of Bitcoin, he only needs to pay a deposit of $200 to participate in Bitcoin investment.

Bitcoin contracts mainly have the following benefits and risks:

Advantages of Bitcoin CFDs

1. No Short Selling Rules

Certain markets have rules against short selling, and Bitcoin CFDs can be shorted at any time without borrowing costs because the trader does not own the Bitcoin asset.

2. No intraday trading requirements

Some markets impose minimum amounts for day trades or limit the number of day trades for certain accounts. While Bitcoin CFDs are not subject to these restrictions, all account holders can day trade as needed.

3. Hedging risk

Skilled contract traders will wisely use the ratio of margin to leverage to achieve the purpose of maintaining high profits and reducing risks, or use the hedging method of buying a spot and shorting a contract to achieve hedging.

Risks of Bitcoin CFDs

1. Leverage risk

CFD trading is fast-paced and requires close monitoring. Investors need to always pay attention to the liquidity risk and margin situation.

2. No ownership

CFDs are about speculating on price changes rather than buying the underlying asset. So you can own the contract, but not the real asset the contract is based on.

Bitcoin Investment Strategy

For bitcoin contracts, we believe that both newbies and veteran players should learn some virtual currency investment strategies, which is undoubtedly an important guarantee for investment profits.

1. Use Stop Loss Orders

If you want to hear our most useful CFD trading tips, here it is: make sure to limit your downside by using stop-loss orders, or even guaranteed stop-loss orders.

2. Learn to analyze the market

If someone brags about making money with bitcoin contracts, it doesn't mean they should start trading right away, first thing for any investor to do: read research reports, find articles on the topic, and do your own research analysis.

3. Develop a trading strategy

Investors should consider ahead of time where to close their positions in the best-case and worst-case scenarios. Consider potential scenarios where your investment might come up. At the same time, you should also consider how much you can afford to lose, or how much profit you will make on that particular position.

4. Learn to stop loss

Investing isn't always smooth sailing, and investors can make one of their worst mistakes when they get emotional and want to "win back" what they've lost. For example, if you decide to set your stop loss 10% below the bid price, then don't change your plan for any factor.

5. Choose a reliable CFD broker

Having a good CFD broker can affect the investor's investment results. On the one hand, there are fees. When trading CFDs, the most important cost is the spread cost, which is the difference between the bid and ask prices. On the other hand is safety. Investors should do their best to avoid being scammed.

What are the Bitcoin trading platforms? How to choose, matters needing attention

After understanding how to invest in bitcoin and the strategy of bitcoin contract trading, if investors plan to start investing in bitcoin in the form of CFDs, choosing a safe and reasonable investment platform is the most important key, how to choose bitcoin contracts A trading platform for spreads? Generally, it will be understood from the transaction scale, regulatory license and other aspects.

At present, the best CFD investment platform in Taiwan, we have to recommend CM Trade, which is a financial trading institution headquartered in Australia and has three major regulatory licenses, including the Australian Securities and Investments Commission (ASIC), St. Vincent and Grena Dins (FSA), Vanuatu Financial Services Commission (VFSC), and in order to ensure the safety of client funds, client funds will be independently deposited in regulated bank escrow accounts.

After confirming the safety of incoming and outgoing funds, CM Trade also has many special functions, such as one-click automatic copying function, margin stop-loss function, as well as timely market information and exclusive market trend reports, etc., so that investors can control their own risks. , reduce the losses caused by market fluctuations, in addition, there is a very advantageous spread on CM Trade, which can meet the needs of investors for high-frequency short-term trading.

In conclusion

The above is to interpret the situation of bitcoin in 2022. If you want to start bitcoin contracts in the current market, you must choose a formal and reliable trading platform, so that you can use the pipeline of bitcoin contracts for difference to achieve small and broad, Reduce risk and get more return on investment.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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