Previous year has been a rather quiet one for cryptocurrencies and Bitcoin in particular. The rate has been going flat mostly bouncing between 210 USD and 280 USD per coin. However, in July it hit the lowest mark and priced BTC at 150 USD yet it quickly came back to normal. Last quarter of 2015 has shown a raise in the price of this cryptocurrency as BTC/USD rate has quickly climbed over 400 USD. What will happen to Bitcoin this year? Should you consider this as currency trading or is it more like Bitcoin gambling? Find out below!
Why does BTC/USD rate go up?
There are a few reasons why Bitcoins are appreciating in value. Even though last year was quite a positive one in terms of the legal status of BTC. Mostly, different jurisdictions could not decide whether it is a currency or a commodity, but the fact that Bitcoins are here to stay was already accepted by the world’s largest countries. Next to this, a ponzi scheme that roots to Russia, MMM, has started its operations in China and, as this scam accepts Bitcoins, it has driven quite a large demand for the cryptocurrency. However, note that MMM has nothing to do with investing or trading, stay away from it as this is a pure Bitcoin gambling. These two are the main reasons behind the increasing BTC/USD rate.
Should you trade BTC in 2016?
In general, today there are some signs of a Bitcoin bubble. This means that the rate can climb 1000 USD per coin in a matter of a few days, yet it can also fall quite quickly too. Nevertheless, if you are a risk seeking person, you may try engaging in the BTC trading this year, as the volatility has came back. However, you do need to follow the market and the latest news, otherwise you will be simply doing some Bitcoin gambling.
What news to watch for?
The main event that you should be expecting is the end of MMM. Yes, this is the time when BTC/USD rate will get very low. Currently the upward trend is driven by a higher demand, yet once the scam collapses, it will trigger a huge price drop. It is hard to estimate how low the price would be, but I wouldn’t expect it to be higher than 200 USD per coin. This is why you should be better off taking a short position on this asset at this point in time. Next to this, you it might be a good idea to actually go long on Bitcoins right after MMM’s fall as the price will be below the market. Still, there is quite a high chance of other events to occur, some of them may have a heavy impact on BTC. Unless you can spend enough time following the market you will not be trading a cryptocurrency, but just engaging in Bitcoin gambling.