Trading in crude oil with Bitcoin
Bitcoin emerged on the market in January 2009, and since then it has blazed a trail for other cryptocurrencies. Find out how you can trade in crude oil with Bitcoin.
While Bitcoin may have emerged on the market in 2009, it took some time for it to take off, as the concept of digital currencies was still very new to the world. The first significant users of Bitcoin were black markets. Eventually, in September 2012, the Bitcoin Foundation was founded to promote the cryptocurrency’s development and uptake.
By 2017, it is estimated that there were between 2.9 to 5.8 million unique users with a cryptocurrency wallet, and most of them were using Bitcoin. Today, Bitcoin is universally known and is even accepted as legal tender in places such as El Salvador and Central African Republic.
Crude oil, meanwhile, is an essential commodity pretty much the world over. And as such it is considered to offer excellent opportunities to profit in nearly all market conditions. The increase in energy sector volatility has also offered unique opportunities for both short-term swing trades and long-term timing strategies. You can find out more at Oil Profit .
Why has Bitcoin entered the crude oil trade?
So we know that crude oil has global value, and its a volatile market. The inflation in economies and increases in energy prices have been reflected in the crude oil price. Many traders of crude oil are using Bitcoin. But what makes them compatible?
To start with they share a market volatility. But this volatility apparently rarely clashes. Bitcoin also offers faster, more efficient and cheaper international financial exchanges. There is no middle man taking a cut with Bitcoin, and it has been designed to be a seamless, global currency. This means inter-country trades can happen quickly and with less inconvenience – a plus with a volatile product.
What should you look at when trading crude oil with Bitcoin?
When trading in crude oil it is essential that you examine all the factors that may impact its supply and demand. These include OPEC, energy reports, the latest news, political moves, natural disasters and global economic performance. It is also wise to watch for any changes in alternative energy as this can affect oil trading too.
There are over 160 different types of crude oil that you can trade, but the two biggest global markets are Brent Crude Oil (BRENT) and West Texas Intermediate, also known as US Crude Oil (WTI).
Brent Crude Oil comes from fields in the North Sea and is the most popular as it is simple to transport. WTI is taken from wells in the US and sent to Oklahoma by pipeline. It is one of the most expensive crude oils to move around the world as it is considered to be higher quality.
When deciding to trade in crude oil with Bitcoin it is important you do your research, just as it is with any investment, and make sure you choose the right market, and the best time to buy and sell – both for Bitcoin and crude oil. Get your timing right and you can potentially enjoy a healthy return. But get it wrong and you stand to lose out.