Bitcoin

Bitcoin is at a crossroad. Media, both positive and negative, applies huge pressure to Bitcoin and other cryptocurrencies in general.

Positive announcements emphasize the improvements made in the basic Bitcoin technology as the cryptocurrency network integrates SegWit (Segregated Witness) into its platform. SegWit allows for the possibility of additional transactions in the network. Making transactions more efficient, which leads to reduced commission payments.

An all time high in transactions was seen in January, however now with the help of new technology they dropped. Blockchain recorded a transaction fee as low as $0.36/kB – a six month low. Despite that, Bitcoin is currently trading at almost $ 10,000, with all the top 10 cryptocurrencies in red in a 24 hour perspective.

Optimistic news is also coming from from South Korea, where Choe Heung-sik, chief of the South Korea's Finance Supervisory Service (FSS), told reporters that the country plans to normalise the crypto-currency business within the self-regulatory environment. Investors should be positive about the fact that plans to ban cryptocurrency in this country have not been implemented yet.

We see a lot of negative news about Bitcoin as well. Most of it is coming from regulatory bodies, who are eager to create regulations in this sector. Especially regarding the problems of cryptocurrency, among which are high volatility and a lot of exchanges being hacked. Representatives from such authorities as the UBS and S & P Global Ratings, as well as the senior ECB member Yves Mersch were against the trading of cryptocurrency.

At the very beginning of the month, the head of the Bank for International Settlements, Agustin Carstens, called Bitcoin "a combination of a bubble, pyramid and environmental disaster". Moreover, the head of the Bank of England, Mark Carney, told students at the London Regency University that Bitcoin could not be classified as a currency, since it does not work based on the key functions of a currency. Recently the finance ministers and central bank governors of France and Germany asked for regulations of cryptocurrency to be placed on the agenda of the upcoming G20 meeting. Britain's Treasury Select Committee of Lawmakers said on Thursday that it is launching an inquiry into digital currencies in order to understand risks and opportunities of using the technology. Among all of that, it is clear that the Bank of England is one of the banks, that is looking into the blockchain technology.

According to the data from our platform we see that behaviour of users is affected by this crossroad situation on the market. Less people are opening new positions on cryptocurrency, however the amount of short positions shortens as well, which shows this crossroad in the cryptocurrency trading.

While the regulations are being discussed, it is a great opportunity to take advantage from CFD trading on such platforms as Capital.com. CFD trading can only be offered by regulated companies that follow a set policies to protect the business and their clients. These regulations include the segregation of clients' money meaning trading is more secure, projection against fraud, account security standards and data protection to ensure the trading process is as safe as possible.

It is good to know that there is an opportunity to benefit as an investor, not only from price growth, but from price decline as well. Opening short (sell) positions on CFD (contract for difference) platforms, like Capital.com, is one way to do so. The benefits of trading CFDs on cryptocurrency with Capital.com include segregated accounts, account security and broker services, which are regulated by a financial regulator.