When trading on an online exchange you are essentially trading a pair of cryptosurfers. Simply put, your balance of crypto-calls is determined by the value of each of the pair you hold. That is how much of each currency you can acquire for a single Bitcoin. This is no different than visiting a store and realizing a product is priced at a certain monetary amount. There is a fundamental difference however between Cryptocurrency and Forex, the latter involves global exchanges and can take many months or even years to complete.
So just how do we know what value each of the currencies is assigned to? For instance, we know that each coin in the list of bitcoins is assigned a fixed weight based upon supply and demand. The weight is derived from the current exchange rate for each of the two currencies. This data is published by makers of the coins and made available to traders that wish to trade. Thus, when we look at the top 10 most traded coins, we see that the three that are most heavily traded are in order, but why?
Two of the most heavily traded exchanges are Btc peanuts and Ethopia. Btc peanuts are traded for their base pair, which is an easily liquid virtual currency, and are traded over the MetaTrader platform. Ethopia is traded over the Evernote platform and is created by the Hong Kong Exchange. Both have daily trading volume exceeding one million dollars. By looking at the chart on their websites you can see that their balances are constantly changing, which is due to the fluctuations in the value of their base currency pair.
So what draws people to trade Cryptocurrencies? Probably the main reason is because they are relatively new to the market. As more people learn about them, the volume of trading increases. The second reason people trade Cryptocurrencies is because they offer liquidity and ease of trade. This ease of purchase or trade opens the door to large profit margins, which many big financial institutions are interested in.
Another reason that drives the market is the perceived future value of the various currencies. If you look at the list of contenders for the throne as far as who will be the next king of Cryptocurrency, you will find that there are several bright spots. Namely, the premier trade currency being exchanged, which are the bitcoin, and the lesser known but rapidly increasing Litecoin. However, when we analyze which is the better choice between the two, we must also consider if the lesser known is really superior.
By analyzing the market trends, we can see that the biggest winners in terms of trading pairs are the ones being traded on the larger platforms, such as those run by the big three Forex brokers. While this is true, this does not necessarily mean that smaller brokers cannot make a profit. As with any business, with enough time and patience anyone can start and do well in trading the lesser known cryptosurfs. It is only after evaluating this information that anyone can decide which is the right path to follow.
When analyzing which of the two is the best currency pair to trade, the main consideration is the high demand and high supply. For instance, in general, the demand for the Litecoin is extremely high and the supply is low. This means that someone buying a Litecoin would have a difficult time unloading it when the prices rise, especially if there is no trading channel for that particular day. Similarly, if you are speculating on which is the best to trade, then you should find a good channel for trading and do not trade one of the lesser known cryptosurfs, as the market will become too saturated with activity.
One of the biggest indicators of profitability for any trading platform is the liquidity. This refers to the number of times the transaction has been completed and whether the seller or buyer was successful in obtaining what they wanted. If there is very little liquidity, such as for example during weekends, then this could indicate that not enough people are interested in trading in that currency pair, which is a severe problem. However, if there is a lot of liquidity, such as during the weekdays, this indicates that there is a high demand for that particular pair of coins.