Bitcoin price is very volatile which brings a lot of investors and people looking for an opportunity to make money. This shouldn’t be surprise as Bitcoin project is relatively new and needs time to find it’s right place and value in our society. Bitcoin network is also rapidly growing which influence the price a lot. Today I will tell you how to use this in a smarter way…
Bitcoin price volatility
When Bitcoin project was launched not many people wanted to pay anything for it, back in December 2013 the price reached 1300 USD for one Bitcoin. Those discrepancies, by some seen as curse, by many as opportunity, are caused by the following factors:
1. Supply/demand – whenever new opportunity arises, new online exchange launching, new investor, new Bitcoin project etc. demand rises dramatically and supply stays at the same level which drives price up.
2. Long term price – as history shown with stable supply and growing popularity Bitcoin price hovers around 250 USD which is amazing achievement for a 5 years old currency. With supply limited to 21 000 000 in total and the world population exceeding 7 billion it is believed that in future Bitcoin price will be much higher.
3. Supply – supply is set to 25 Bitcoins every 10 minutes (this amount is halved every 4 years) which means that every 10 minutes people have to buy Bitcoins worth almost 6300 USD in order to keep supply/demand balanced. Remember that this is happening every 10 minutes, 7 days a week! This means that every day people have to spend 900000 USD in order to keep the price around 250 USD per Bitcoin…and this is happening 7 days a week. For those a bit more picky I wanted to clarify that this is the case if everyone mining Bitcoins would be selling them immediately, otherwise those values are less 🙂
4. Holidays, events – global events like Christmas usually force people to sell their Bitcoins in order to buy some Christmas gifts, increased amount of sales and lowered amount of buys can lead to price being lower during those events.
Those and many other factors when used properly can be very useful for not only day traders but also investors. Bitcoin created new market for the mining hardware and also so called hashing power.
What is hashing power?
Everyone at any time can connect to Bitcoin network and start mining. Some devices are slow and unprofitable (like mobile phones), some are really energy efficient and powerful (like dedicated ASIC miners). ASIC miner is quite expensive device and not many people can afford to buy one. That’s why companies like Cex.io came up with an idea of allowing their users to buy not only mining hardware but also part of it’s processing power. This service is called cloudhashing and we have already described it in the previous article, with the only difference that Cex.io did not set a fixed price for hash rate unit. Instead they allowed users to trade hashing power between them and let the supply/demand to set the price. The best part is that when you buy has power from anyone on the market it will keep hashing for you until you sell it.
How does it work?
Enough of theory, let’s see some examples. Let’s say I bought 10 GH/s from someone for a price of 0.0008 BTC. I keep it for one day and then I sell for the same price. Despite the fact that I’ve bought and sold for the same price I earned some Bitcoins because this hash power was constantly mining Bitcoins into my account. Of course asset value, in this case hash rate may also gain or loose value overnight like any other stock. In which case calculations are a bit more complicated because you have to consider if you managed to gain or lose on this trade. In any case their service creates a lot more opportunities for people who like to trade assets and expand their knowledge to new areas. Cex.io also allows people to trade cryptocurrencies like Litecoin, Darkcoin and Dogecoin which definitely brings some more attention to their services. Below you can see how the GH/s price has changed during the last month
Another smarter way of making money!
Once you’ve signed up with Cex.io and test their services you can take advantage of their affiliate marketing offer and earn money. Cex.io prepared special referral link for you accessible from your account which you are free to give out to people you know or on internet forums etc. For anyone who uses your link to sign up and buy hashing power you will be rewarded by Cex.io with bonus Ghs in a equivalent of 3% from the referred user’s GH/s balance. It is not permanent and in case your referred user decides to sell his GH/s, your bonus GH/s amount will decrease as well, but you will be rewarded again if he/she decides to buy some more 🙂
Don’t waste your time and sign up now!