A new Bitcoin ETF (exchange traded fund) is about to be either approved or denied by the SEC. This could have a huge impact on the price of bitcoin.
Over the past few months, the bitcoin price has been soaring. As I write this post it’s trading at $1,149. Many people see the recent price rise as a direct result of this upcoming ETF. The Bitcoin Trust, will be the first ever cyrtopcurrency ETF and will give bitcoin a huge amount of additional exposure. Because of this increased exposure, the price has been rising, and many people have been predicting further upward moves if the fund is approved.
Of course, the SEC might not approve the fund. And this could see the price of bitcoin drop. Whatever happens, we can expect a huge amount of volatility in the price of bitcoin over the coming days.
So what is the best way to trade bitcoin this weekend?
Well because this is such an historic event, social trading platform eToro has decided to allow Bitcoin trading over the weekend.
The advantage of trading on etoro, is that you can go short. In the event the SEC decides to reject the fund, you can “short” bitcoin and profit as the price drops. This gives you a level of protection against the decision. If you were to simply buy bitcoin, you’d be stuck with the cryptocurrency and no option to short it.
How to Take Advantage of the Bitcoin Volatility
- Trade the Weekend – I just received news that etoro will allow bitcoin CFD trading over the weekend. This means you can trade the volatility no matter what time the decision is released.
- Prepare to go short – if the decision comes back as a “no”, be prepared for a price drop. On etoro you can sell bitcoin to profit from a downward trend.
- Be prepared for massive volatility – bitcoin is unpredictable. So be smart and use etoro’s built in stop loss protections. Trade with a small amount of leverage.
- Follow the news. Mainstream media may be slow to react, so follow dedicated sites such as CoinDesk which will have the latest updates.
Don’t want to risk your own money? Then why not have some fun this weekend and practice trade. You can use virtual money under real market conditions to see if you have what it takes to be a profitable trader. You can open a practice trading account for free here.
Do you plan to profit from the Bitcoin decision? How will you be trading?