The most anticipated event of the crypto ecosystem is 4 days before the event, while the price of BTC continues to rise with ease. If you want to use Bitcoin Halving to invest, CFDs are an excellent tool.
About Bitcoin Halving
The Bitcoin code is programmed to run a protocol about every 4 years, halving. Designed to cut the production speed of new bitcoins in half and reward members of your network.
He went through two halves during his eleven years, and today we are a few hours away from witnessing the third.
On both previous occasions, Bitcoin’s price was affected by this event. Many hope that this time around will not be the exception that will occur in an unprecedented economic environment.
For miners, the drastic reduction in rewards sounds negative, but this could only be short-term. Investors who are committed to the project are continuing their positive vision, which is already eliminating much of the bitcoin potentially negative scenario before halving it.
Today we see that Bitcoin is fully strengthened and can recover from a recent low of $ 3,850 to reach the $ 10,000 high zone in 2020.
What is halving for?
Halving’s main goal is to maintain the sparse nature of the project. With a lower supply, stable or increasing demand, the price of Bitcoin is expected to rise.
Despite the fact that the past does not ensure what will happen to the price in the future, it shows a vision of investor sentiment regarding the deflationary nature of the project.
The conditions are not the same either. While some may see Bitcoin’s economic collapse beneficial, others feel that this asset is not ready to face a current situation. Fluctuations depend on consensus, and what the price shows today is positive for the future.
Why is it worth investing in CFDs to take advantage of Bitcoin’s Halving?
CFD, Abbreviation for Contract for Difference, in Spanish, Contracts for Difference. As the name suggests, these are contracts where two parties agree to exchange the entry and exit prices of the asset to which the agreement is anchored.
As such a versatile tool, there are many advantages to using it. We’ll see that next, of course not everything is pink, there are some drawbacks.
- As long as there is liquidity, the position can be closed at any time: Contrary to futures contracts, CFDs can be closed if the trader so wishes, which allows greater flexibility for different strategies.
- It works in every direction: Since it is a contract between two parties, the operator can even open positions for sale and use any kind of trend.
- Leverage: Probably one of the best advantages of using differential contracts. With this tool you can open positions with a purchasing capacity that is much larger than your capital. Brokers generally offer 10- to 100-fold leverage, which means you can open up to $ 1000 in capital and 10x leverage up to $ 1000.
- Stops for loss: Unlike wallets and exchanges, CFD allows you to set the starting price to control and reduce losses.
- Leverage can work against you: If you do not fully understand the risk of using leveraged instruments, your capital can easily go bankrupt. With leverage products, you can make money with the smallest fluctuations, but also lose money. For this reason, you need to know this tool very well before using it.
- Volatility can become your enemy: When using leverage, the volatility of the underlying product must be considered. As I said, profits can be as high as losses, no matter how small the movement. Therefore, high volatility can be a problem if you don’t control the risk. Fortunately, there are stops for losses. So create a trading plan and don’t risk more than you’re willing to lose.
How can I use Bitcoin Halving with CFDs?
Finding Bitcoin in the real market can be very difficult for an investor with little capital, as the price has to move a lot to get attractive benefits.
Bitcoin CFDs are undoubtedly one of the best options to solve this problem.
When buying contracts for difference, you can speculate about any kind of movement, whether they predict small fluctuations and benefit from leverage effects such as ups and downs, as it is a contract for an underlying asset.
According to your forecast, you could now open a CFD buy transaction for Bitcoin if you expect the halving to have a positive effect. In the opposite case, however, you expect a negative reaction. You can also execute a sales position to take advantage of the movement.
A recommended broker to perform these operations is Plus500, an absolutely reliable service with a simple platform and all the tools you need to make an investment in CFDs a successful activity.
Risk management is always a priority when using leveraged products. This broker allows you to set up profit and loss stop orders so that you can more easily comply with your pre-determined rules when investing in Bitcoin.