In 2008, Satoshi Nakamoto invented Bitcoin. It was a digital currency that would bring a revolution in the financial world because of its security and integrity. Being a peer-to-peer currency, it was not under the regulations of any central bank or regulation. Thus, it was an ideal option for the unbanked global population.
In 2009 Bitcoin trading, $1 was worth 1,300 Bitcoins. However, eight years later, one Bitcoin was worth $10,000. The scenario denotes an unusual rate of return. In 2017, Bitcoin achieved another record milestone by becoming worth $20,000. If you had not invested in Bitcoin early enough, all you could do is watch as others celebrated the success of their investment.
The digital currency has stood the test of time. When COVID-19 struck in 2020, it devalued several financial assets leaving Bitcoin still standing strong. Its value rose from $4,000 to $23,000 during the year. Thus, Bitcoin provided the best financial cushion that was ideal to any investor that wanted a strong portfolio.
In South Africa, it is legal to trade in Bitcoins. However, the South African Reserve Bank (SARB) encourages you to understand the risks associated with the trade and act accordingly.
Do you want to know how to invest in Bitcoin? Then, find the information below or visit topbrokerstrade.com for more info.
Factors That Determine the Price
Available units
Similar to other financial assets, the laws of demand and supply partly determine the price of Bitcoins. Notably, there will always be a finite number of Bitcoin units that will be available at any given time.
Market players
Beyond the available units, the market players regulate the fair value of the currency.
Media coverage
When Bitcoin first appeared in the market, the media termed it a scam. Such claims hurt the demand of the currency, thus pushing its price down. However, social media platforms have continued to share positive news about the currency making its price stabilize and go up.
Government policies
Even though Bitcoins are not subject to any government regulations, some governments have introduced taxation on the income generated from trading Bitcoin. When government policies exert pressure on the trade, the price of Bitcoins can reduce significantly. However, positive regulation brings confidence among investors, thus driving the demand of the digital currency up.
Events Within the Bitcoin Community
Sometimes the mining of a Bitcoin undergoes halving. The move limits the supplying rate of digital currency. So, when the supply goes down, the demand goes up, thus pushing the currency’s price up.
How to Buy Bitcoin in South Africa
As aforementioned, trading in Bitcoins is legal in South Africa. However, the earnings from the trade are subject to taxation in the country. Additionally, the plans to install a regulatory framework that will govern the trade are underway as one way of controlling the cyber-banking industry. In South Africa, you can buy Bitcoin using any of the following six ways:
Using Bitcoin exchange
You can buy Bitcoin using a reliable and secure Bitcoin exchange. So, you have to apply due diligence before making a purchase. After identifying the exchange, the next step is to deposit funds from your bank account to your Bitcoin wallet. Afterward, you can now transact in digital currency.
Bitcoin exchange stands as one of the most secure and safest ways to trade in any cryptocurrency. More and more South Africans are turning to Crypto currency exchanges, with the preferred platform being Top Brokers Trade.
Using a credit or debit card
You can also use your credit or debit card to make a purchase. However, you still require to do it via a Bitcoin exchange. After transferring money, to your wallet, you can start trading with digital currency. However, the credit card fees apply during the process.
Using VTM/BTM
You can find a BTM vending machine in any of the major South African cities. The machine works similarly to an ATM. If you have a Bitcoin trading app, or access to the Bitcoin trading platforms, on your smartphone, then you can generate a BTM-readable QR code. Afterward, you can use the code to buy or sell Bitcoins utilizing a BTM. However, the machine does not allow you to withdraw money.
Getting a Bitcoin payment
Using Bitcoins as a payment medium is becoming increasingly popular. You can get paid via the Bitcoin exchange wallet. The Bitcoins that you will receive as payment will be equal to the price of the rendered services or sold products.
Using the Bitcoin community site
You can opt to buy Bitcoins using a reputable website. Alternatively, you can meet up with a seller and pay cash for the digital currency. However, you need to be careful not to be scammed.
Mining Bitcoins
The option calls for you to engage in the complex process that will enable you to mine Bitcoins. The process requires an expensive processing technology. However, you can join a syndicate of miners. The process involves network security and verification of transactions. If you become successful, you get a Bitcoin payment.
Benefits of The Trade
- Decentralized valuations–Bitcoins are never exposed to inflation or interest rate because they are not subject to government regulations.
- High leverage–You can get leverage from some Forex traders enabling you to trade more.
- Low deposits–If you approach some traders, then you need as little as $25 (R358,00) to trade in Bitcoins.
- Low trading cost–Most brokers keep their trading costs at a minimum to attract more investors.
- Security–You do not require banking details to trade in Bitcoins.
- Global presence–Trading is consensual and does not have any geographical boundaries.
Risks of the trade
- Varied exchange rates–The trade attracts multiple exchange rates. You have to understand the exchange rate that your preferred broker is applying.
- U.S Dollar-rate risk–Most brokers accept and hold payments in U.S dollars. Thus, traders are exposed to the U.S dollar-rate risk.
- Volatility danger–The absence of regulation exposes the Bitcoin trade to high volatility. Some brokers take advantage of buyers, thus pushing the price of the digital currency up. Alternatively, the brokers can apply the lowest rate when buying from a trader.
The Dominance of Bitcoins
Bitcoins stand as the dominating digital currency in the world of cryptocurrency. When its performance increases, the performance of other digital currencies also improve. A similar situation happens when the value of Bitcoin drops.
One of the factors that make Bitcoin dominate the market entails high volatility. Even though the aspect appears as a risk, it reciprocates into high returns. So, never be afraid to buy digital currency when it has a high volatility rate.
Bitcoins are now gaining the media coverage that they deserve. Any shift in the performance of the digital currency has a high likelihood of appearing in the news. Thus, the trade is increasingly gaining popularity.
Key Takeaways
Given the benefit and ease of Bitcoin trade, it is a venture that will continue growing. The current growth rate denotes that the value will increase steeply in the future. The pending government regulatory framework is a milestone in the trade.
So, it is time for you to trade in Bitcoins and partake in the growing high returns. It is the future of the financial markets, and it is early enough for you to carve a position in the market.
We can evidently say that the currency of the future is now in South Africa.
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