In the year-to-date period, the price of Bitcoin has more than doubled and many other cryptocurrencies have recorded high double-digit price gains in the same period. Bitcoin started trading this year around $3,700 and it is now trading around $13,000. Ethereum started trading this year around $140 and it is now trading close to $305.
One important point to note is that the year-to-date performance of cryptocurrencies contrasts sharply with the market-wide losses that the industry suffered last year. The cryptocurrency market is benefiting from an aggregate of positive sentiment. The charts below show how Bitcoin and Ethereum have outperformed the S&P 500, NASDAQ Composite, and Gold in the year-to-date period and in the last one month.
Of course, critics will be quick to argue that the positive sentiment is a function of FOMO rather than strong bullish fundamentals. Irrespective of what critics think; there’s no denying the fact that cryptocurrency is no longer the passing fad that they thought it was. This piece provides insight into three ways you can leverage the positive market sentiment in your trading and investment decisions.
3 simple ways to benefit from the bullish sentiment in Bitcoin
Trade cryptocurrencies for short-term gain
If you can discipline yourself and master your emotions enough to be greedy when others are fearful and to be fearful when others are greedy, you can benefit from the bullish sentiments on cryptocurrency by becoming a trader. Trading cryptocurrencies will typically require you to enter and exit multiple trading positions over the course of the day (for day traders) or weeks (for swing traders). You’ll also need to take the time to understand fundamental and technical analysis in order to improve your odds of making smart trading decisions. There more than 2,100 different coins and tokens in the market and beginners might find themselves overwhelmed by seemingly complex nature of the market. You can begin your trading journey on a beginner-friendly trading platform such as eToro that allows you to buy cryptocurrencies using traditional fiat payment methods. eToro is also planning to launch a copy trading platform for cryptocurrency trading where you can copy the trades of experienced traders to help you shorten your learning curve. You can also utilize eToro’s $100,000 virtual portfolio to simulate trades before using real funds.
Invest in cryptocurrencies as a long-term strategy
Investing in cryptocurrencies is fundamentally different from trading. While trading is geared towards taking advantage of short-term volatility, investing presupposes a “philosophical” long-term believe in the disruptive potential of cryptocurrencies. The supply of Bitcoin is capped at 21 million units and almost all other cryptocurrencies have a supply limit of sorts.In contrast, the global population is already more than 7 billion people; hence, if cryptocurrencies become widespread legal tenders; their value could soar astronomically in tandem with the dynamics of an infinitesimally elastic demand and limited supply.
Watch out for Airdrops
Many people tend to dismiss or ignore Airdrops because they are often an attempt by new Blockchain projects to trigger an interest in their tokens. Airdrops are broadly divided into task-based airdrops and effortless airdrops. Effortless airdrops only require you to sign up and you’ll receive a certain amount of the new tokens in your wallet. Task-based airdrops might require that you buy some tokens, do some promotion on social media platforms or invite your friends to signup in exchange for a proportionate amount of their tokens.
For the most part, you have nothing to lose by participating in an airdrop and those tokens could eventually be worth something if the project succeeds. Remember the 10,000 BTC that was spent on $20 pizza and what 10,00BTC is worth today.
Aggregating positive sentiment on Bitcoin
If the impressive YTD performance of Bitcoin hasn’t convinced you that the market is regrouping for a 10k push short term the points below will provide you with a glimpse into the arguments for an accelerated bullish run in the second half of the year.
Jack Dorsey, CEO at both Square and Twitter is quite positive on Bitcoin despite the fact that it has become fashionable to denounce crypto. In a chat with Joe Rogan Dorsey revealed that making the decision to enable Bitcoin payments on Square’s Cash App is a forward-thinking movement in the right direction. In his words, “I believe the internet will have a native currency and I don’t know if it’s bitcoin. I think it will be [bitcoin] given all the tests it has been through and the principles behind it, how it was created… “It was something that was born on the internet, was developed on the internet, was tested on the internet, [and] it is of the internet.”
Facebook, the largest social media platform in the world with its more than two billion users launched their own cryptocurrency in June, known as “Libra”. The social network giant has reportedly secured partnerships of close to 28 financial institutions and tech firms that will contribute financing and technical expertise to the project. Facebook is hoping that “Libra” will serve as a borderless country for use especially in developing countries where socioeconomic and geopolitical situations are volatile.
In the words of Spencer Bogart, a partner at VC firm Blockchain Capita in an interview with Forbes, Facebook’s cryptocurrency interests has “lit a fire in the pants of every major [financial technology] and financial institution in the U.S.”
Lastly, IEOs – Initial Exchange Offerings are gradually being established as another vehicle for Blockchain startups to raise funds. Binance is already setting up shop as a platform for startups to launch IEOs via its Binance Launchpad. The BitTorrent IEO that happened on Binance Launchpad happened in less than 15 minutes and the startup ended up raising $7.2M. Fetch.AI IEO also ended in 22 seconds and the startup raised almost $6M. The rising popularity of IEOs could trigger another crypto rush that could trigger another bullish run.