An exchange will share what price a buyer is prepared to buy bitcoin at, and how much they want to buy at that price. This is described as a Bid. Alongside the list of Bids, sorted by price, will be the Order Book of Sellers, providing the detail of sell Offers; the price and amount… Continue reading Exchange Order Book
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Buying Over the Counter (OTC)
So we can now understand, in a very basic way, how bitcoin’s price is reached, through the interaction of buyers and sellers at exchanges. Exchanges aren’t however, the only way to buy bitcoin. Where an individual or organisation wants to buy or sell a large amount of bitcoin, they may not want to go through… Continue reading Buying Over the Counter (OTC)
Barriers To Bitcoin Price Discovery
Where market conditions are the same, the price across exchanges won’t differ greatly, which is the sign of an efficient market. If not, users would simply buy at the lowest price on exchange A and sell at the highest available price on exchange B (aka arbitrage). Compared to more mature assets – like gold or fiat… Continue reading Barriers To Bitcoin Price Discovery
Price Discovery & Exchanges
The process of identifying a fair value for bitcoin is called price discovery. Every market participant will in theory be utilising all available information about bitcoin – Technical, and Fundamental – as well considering the behaviour of other market participants to discover the true price. We’ll unpack the influences on price discovery later in the section,… Continue reading Price Discovery & Exchanges
What does bitcoin’s price represent & where does it come from?
Staying focused on bitcoin as our example, price is a measure of the perceived value of bitcoin in relation to an existing currency (such as the Euro) and is established from the interactions of buyers and sellers. Perceived value is entirely subjective, but the most common view is that bitcoin’s value comes from its potential… Continue reading What does bitcoin’s price represent & where does it come from?
Where do crypto prices come from?
What you’ll learn? Learn about price formation Understand the role of exchanges What price information an exchange provides Interpreting order books & depth charts In the first article of this series on how to trade cryptocurrency we distinguished between thinking about risk and opportunity – in terms of short term price volatility and long term… Continue reading Where do crypto prices come from?
Feet on the Ground
Whether Trading or Hodling, you are essentially betting that you will be able to sell a cryptocurrency at a higher than the point at which you bought. You might flinch at use of the word ‘betting’ but trading is a form of gambling. The trick is reducing it to a skill-based decision – through a… Continue reading Feet on the Ground
Trading vs Hodling
Though both Trading and Hodling require you to manage risk, it plays out over different time frames – short term and long term – and the influences on risk – how it manifests as price movement, and the approaches to managing it – are different for each. The umbrella term for analysing short-term asset price… Continue reading Trading vs Hodling
Distinguishing Trading From Investing
So cryptocurrency is a risky, novel and volatile asset, but with significant potential upside in both the short and long term. Your challenge is to figure out how to tap into that potential, manage the risk and make money, by learning how to trade cryptocurrency. To keep things simple at this point, let’s assume that… Continue reading Distinguishing Trading From Investing
What is cryptocurrency trading?
What is Cryptocurrency Trading? What you’ll learn? What cryptocurrency trading is The nature of risk in trading crypto The difference between trading vs hodling The importance of keeping your feet on the ground When we surveyed newcomers to cryptocurrency asking them what aspect they would most like to learn about, one of the most popular answers was… Continue reading What is cryptocurrency trading?