Bitcoin's price has been growing rapidly in the past year, and it continued to reach new records in 2021 when it exceeded a price of $50 000. This resulted in a massive interest in investing in BTC. Even though Bitcoin has had bull runs in the past, this one is very different as a lot of big companies, and institutional investors, are backing Bitcoin.
But also, individual investors are at an advantage today, as you can easily sign up on an online exchange site and obtain BTC. But when you are new to online trading, it's essential to learn about blockchain technology, Bitcoin and trading. That said, in this article, we have compiled a list of important things you should know before you open an account on an online trading site.
Differences between blockchain technology and Bitcoin
In the beginning, a lot of people mistakenly thought that blockchain technology and Bitcoin were the same and used the term interchangeably. But, actually, Bitcoin is a virtual crypto-currency that is powered by decentralised and peer-to-peer-based technology, also known as the blockchain network.
Without the blockchain network, Bitcoin will not be in any way as successful as it is today. What blockchain technology essentially does is providing a safe environment where BTC transactions are processed, but it operates without intermediaries. So there is no need for collaboration with financial institutions, for example.
What's more, the blockchain network was developed in such a way that nobody can take control of the entire system or alter the data. Actually, blockchain technology is defined as a digital ledger of transactions that are recorded on a collection of computer systems across the globe. As more computer systems 'nodes' are added to the blockchain, it's virtually impossible to tamper with the data of the network. Other benefits for the users are very low transaction fees and anonymity, as their identity remains anonymous.
Exchange sites
As we mentioned before, there are actually a lot of online trading sites, so you need to pick one that is reliable and has great features. One excellent exchange site where you can invest in Bitcoin that uses innovative technology is BitPal bitcoin. The system is based on AI-driven algorithms, which has made trading on BitPal very easy for crypto newbies. Not only you can download the app and always have access to your account on the move, but also, because this is an auto trading system, most of the work is done for you. Furthermore, you can potentially gain a profit of $5 200 within months of trading here. To get started, all you need is deposit at least $250.
Factors that impact the price
As an investor, you need to be aware of the factors that impact the fluctuation of the price of Bitcoin. First, the ratio of the supply and demand affects the price of Bitcoin, and each event that shifts the demand and the supply of the market consequently impacts the price of Bitcoin.
So, when the demand increases and the supply decreases, then the price rises. And as we know, there is a huge demand for BTC, especially as more companies and institutional investors buy Bitcoin.
When it comes to the supply due to Bitcoin halving, which reduces the block reward of the miners, the costs of mining increases, and as a result, new BTC are generated at a slower rate. What's more, the maximum possible number of BTC that will ever be created is set to 21 million by Satoshi Nakamoto (the creator of Bitcoin).
And, if you're wondering, 18 million BTC have already been mined. Overall, there are a lot of opportunities to invest in BTC and diversify your portfolio, but take the time to set achievable goals and keep up with the news in this field.
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