Trading any kind of market presents its own unique challenges, with cryptocurrencies being no exception. A combination of high volatility and numerous instruments to choose from have also made trading crypto highly popular in 2018. Understanding these markets however is no simple feat, subsequently drawing the interest of top traders and investors.
2017 saw an explosion of cryptos both in valuation, popularity, and adoption across retail brokerages. More recently, the institutional space has warmed to Bitcoin futures, with several leading US exchanges adopting these instruments. Moreover, hedge funds have also continued to adopt cryptos into their portfolios.
The growth of cryptos over the past year has also attracted top traders worldwide. This includes Jarratt Davis, a longtime foreign exchange (FX) trader, shifted a part of his investment business over to a hedge fund structure in order to have more flexibility in the types of investments – this includes embracing cryptos, who he sees as a strong and promising option moving forward.
“Cryptocurrencies and specifically Blockchain technology have captured our collective imagination at the fund. I believe that this new technology has the potential to completely revolutionize the modern world in exactly the same way the internet did all those years ago. And the most exciting part is that we are only just at the beginning, so the potential for growth and profit is virtually unlimited,” explained Mr. Davis.
Mr. Davis is not alone in endorsing blockchain technology or cryptos. The adoption of these constructs has continuously surged, with initial coin offerings (ICOs), token sales, and other forms of funding bringing in more traders and investors than ever before. Indeed, blockchain technology has already transformed the crowd-funding space, with smart contracts and other tokenization becoming the new norm.
No shortage of volatility
Despite the rise of cryptos, this path has been anything but a smooth journey however. 2017 saw no shortage of setbacks for the industry and these instruments themselves. Relative to traditional trading instruments such as FX, CFDs, or stocks, cryptos present similar attributes and well as other nuances.
Crypto markets can be characterized as extremely volatile. While this presents the ideal setting for trading, it also creates situations where traders can make or lose a fortune. This was on full display over the past couple months, as the price of Bitcoin retreated off all-time highs.
According to Mr. Davis, “In my view, the reason Bitcoin crashed is simply because people started viewing it as speculative investment opportunity. Something that would always skyrocket upwards no matter what. In reality, Bitcoin is simply a medium of exchange. Bitcoin has a utility and that utility is totally unrelated to the price of it pushing higher and higher with no limit. It’s only when people stopped seeing Bitcoin for what it actually was and instead saw it as what they wanted it to be did the massive rally and sell off occur.”
Since then, Bitcoin prices have largely stabilized however, with other cryptos also seeing rebounds. More recently, several countries have also opened up to these instruments, helping simplify trading for Bitcoin, Ethereum, and other large-cap cryptos.
Where to trade cryptos?
Much like FX, it’s hard to find the right broker to use and cryptos present the same type of decision making. With no shortage of crypto brokers to choose from, Mr. Davis is looking to simplify this process with a new Crypto Mastermind Course. With over a decade of trading experience, Davis has eyed cryptos as the next big opportunity for investors.
This includes multiple professional tips, including the two most instrumental attributes needed to navigate through crypto markets successfully.