The price of Ether keeps on rallying. Over the past 24 hours, the price climbed right through its $413 all time high and has kept on climbing to a high of $474. This would make the run at over 14% in a mere matter of hours.
We have also seen the price of Bitcoin go through the $8,400 level which was the previous high that was observed this week. Indeed, the price of Bitcion has been increasingly resilient even though market forces in Bitcoin cash have been challenging.
We are going to take a look at what is driving these markets and how you as a trader can properly make money off of the returns that we are seeing in current market conditions.
Before you can dip into the crypto market, you need to set yourself up with an account at a broker or an exchange.
Setting Up a Trading Account
When trading crypto, you generally have 2 options in terms of how you can profit from market movements. One of them is through a dedicated cryptocurrency exchanges and the other is through a CFD broker.
There are a number of exchanges that you can make use of but the top exchange is without a doubt coinbase. They are known globally for being one of the largest and they also have relatively contained fees.
The only problem with a coinbase account is that you are buying the psychical coin and as such, means that you cannot make as much money if you do not have large amounts of coins.
Another option can be more lucrative and that would be through CFD contracts. These are essentially derivative instruments that will be marked to market on a daily basis depending on the movement of the asset.
One of the best Cryptocurrency CFD brokers on the market currently is that of Plus500. They are fully regulated by the FCA and they have over 20 crypto pairs across numerous asset pairs. There are many sites that review Plus500 where you can obtain more information.
Now that you may have a trading account up and running, you are ready to start trading some cryptocurrencies!
Why is ETH Moving?
There are many different opinions as to what is driving ETH at the current moment. Some people claim that the release of the Casper Proof of Stake (POS) that was released by Vlad Zamfir could be factor.
Unlike with other blockchains that rely on miners solving problems with mathematical functions (Proof of Work), POS merely relies on the current position of all the holders of ETH to determine who has voting rights.
Proof that miners are becoming uncertain about the returns that they are likely to lost as POS solutions are implemented with Casper.
Of course, another driver behind this could be something as simple as a difficulty adjustment. There was a drop in the difficulty of mining Ether on the 16th of October. Given that ETH can be mined on GPUs, people who have been mining it were quite relieved.
No Hack Affect
There was a massive hack on the Parity multisig wallets a couple of weeks ago that froze up close to $150 in ETH from some ICOs. Although many thought that this was a bad sign for ETH, it appeared to throw these fears off quite effectively.
The price of Ethereum dropped slightly below $300 but appeared to recover and after lying at about the same level for a number of weeks, it was able to pull forward and make substantial gains
Bitcoin Eyeing $10,000
Bitcoin has had an even more exciting past few months. There was the contentious hardfork in Bitcoin that was meant to split the network. This remained a major uncertain cloud over Bitcoin for a number of weeks.
However, when the hardfork was called off 2 weeks ago, that uncertainty cleared out. Bitcoin would not split and it would remain as the main chain.
This does not mean that it was plain sailing for bitcoin. Immediately after the hardfork was called off, there was mass congestion on the Bitcoin blockchain and there was a co-ordinated spam attack by miners on the network.
Bitcoin fell from $7,800 down to below $5,000 as Bitcoin cash was being pumped by large whale trades. However, the “honey badger” of money showed that this was no threat to it as it was able to recover and keep growing to today’s incredible valuation.
Watch SegWit and CME
There are a number of exciting developments on the horizon for Bitcoin as well that could affect the price. These include more segwit transactions. There is a hope that as more transactions become segwit enabled, they will speed up the Bitcoin network and decrease fees.
As fees fall, demand is likely to increase as well as the price.
There is also another really important development that is coming in December and that is the launch of Bitcoin Futures by the CME. This will allow large institutions to place trades on the direction of Bitcoin.
Many people have seen it as a positive step for adoption as more and more people will trust the infrastructure and invest in the coins. It is not at all unlikely that Bitcoin will breach $10,000.
Moreover, this move by the CME has opened up the door to an eventual ETF as well as more adoption picks up.
Volatiltiy is High
No matter the developments in both ecosystems, it is most definitely going to be a really volatile next few weeks for all cryptocurrencies.
Will Ether fully roll out its POS changes and create a more equitable mining industry? Will the CME derivatives enhance or temper the Bitcoin volatility and bring it to more realistic levels.
Either way, as a trader who can short and go long, there are a range of options for profit. Be sure to always place stop losses and don’t risk more than you can lose.