The $44 Million Dollar Pizza: Bitcoin’s Parabolic Rise and How You Can Still Profit MASSIVELY
On May 22, 2010, 10,000 bitcoin was what it took Laszlo Hanyecz to purchase two Papa John’s pizzas from a user he met on the Bitcoin Talk forums. This transaction has been recognized to be the first real-world transaction to be completed using bitcoin. Although the transaction amounted to roughly $25 when it occurred, the deal is worth well over $40 million, as of today! Expensive pizzas, right?
Surging interest from institutional investors, combined with the successful split of bitcoin into two currencies (bitcoin and bitcoin cash), have fueled an incredibly sharp rally in the price of bitcoin which can be compared to a parabolic move. In the last 30 days (July 17, 2017-August 17, 2017), bitcoin has surged from the low of roughly $1800 to a jaw-dropping $4400 a coin, representing a gain of 144%!
Other cryptocurrencies have staged similarly impressive rallies, such as Ethereum and Dashcoin. For the sake of simplicity, I will only refer to bitcoin in this article. However, it should be noted that other cryptocurrencies have established their significance in the marketplace, and have the ability to provide lucrative trading opportunities.
Surge in Bitcoin Price
The parabolic surge in prices is great news for those who were able to purchase bitcoin at unbelievably cheap levels in the previous months and years. Unfortunately, not everyone was able to participate in and profit from the sharp rally. For now, the uptrend in bitcoin prices shows no end in sight. However, purchasing bitcoin at these all-time highs, and what some may perceive to be ludicrous valuations, may not be the easiest investment decision to make.
Fear not! It’s not too late to take advantage of the upside, as well as potential downside, in bitcoin. The market has proven there is demand for bitcoin, and although the price may suffer from major selloffs in the future, it is highly probable that bitcoin is here to stay. The technology has been rapidly adopted, and the growth has been exponential. Major fintech companies, such as Coinbase, Bitstamp, and Kraken, have funneled billions of dollars into the industry, in order to help bitcoin establish its dominance within the marketplace.
Bitcoin’s viability, compatibility, and sustainability have been tested and proven. As long as a market for bitcoin exists, there will be incredibly lucrative, meaningful and predictable technical patterns that traders will be able to identify and capitalize upon, both to the long and short side. These are the same patterns that are evident within other major financial markets, such as the stock market, commodities markets, futures markets, and FOREX markets.
Trading Bitcoin
The best way to take advantage of the massive price swings in bitcoin, without taking the risk of holding it as an investment, would be to trade it—buy and sell the asset based on a predetermined trade plan, complimented by profit targets and stop losses. Due to the relative youth of the bitcoin industry, momentum trading strategies, such as bull flag breakouts and bear flag breakdowns, have proven to be incredibly meaningful in predicting major price moves in the asset.
Various other trading strategies have also proven to be very effective in successfully trading bitcoin. As a result of the extremely high liquidity within the bitcoin market, individuals can buy and sell large amounts of bitcoin with relative ease. The combination of all of these factors results in a highly active, highly tradeable asset that has the potential to yield considerable profits.
Final Thought
Incorporating an understanding of technical analysis allows bitcoin traders to identify low risk, high reward entry points throughout various time frames: 1 minute, 5 minute, 60 minute, daily, and even weekly! By learning to identify the significant price patterns that form on these time frames, you can take advantage of massive moves in the price of bitcoin, while keeping your risk minimal in case the trade idea fails. So, while you may have missed the boat for investing in bitcoin, becoming a bitcoin trader can potentially be an incredibly profitable and lucrative idea.