As an Asset Commodities historically are known for not coming out so good. Equities are drastically leaving-behind commodities related to long-term investing options. But in contrary commodities are very brilliant short-term-quick profit makers because of their high volatility – Bloomberg Indicates.
Is Bitcoin a Commodity – Meaning?
As years pass, some always keep the same thought that of investing into gold and gold’s long use as a store (long-term) value. But as time flies by, the market is showing other way as gold is weakening and performing quite poorly while comparing it with most assets. In that manner, Gold is followed by Silver, and any other commodity.
But What when it comes to Bitcoin – Can we consider Bitcoin a Commodity?
First of all, bitcoin as a cryptocurrency is being traded globaly in exchanges, market and so on, while being known for its very fluctuating price and change against lets say the US Dollar. On top of that, the market where you invest/trade the coin are always open and never close so 24 hours a day you can trade (24/7/365) which is different with traditional markets. So in conclusion its high change in price (volatility) and the all-the-time open markets make it a perfect trading option for short-term profit.
On very well known exchange places like Kraken, Bittrex, Poloniex and so on everyday over $1 bln Bitcoin is traded. With its not-stopping reach after all time highs like the last one close to $4,500 the last days it passed a market capitalization of $70 bln. Keeping in mind, its higher volume makes it more liquid than other altcoins which by far makes it the perfect go for short-term daytraders to profit.
All sounds good and bright but keep in mind that market that trade Bitcoin are not regulated and miss SEC overlook so everybody should take double caution. But for the Big Whales and deep pocket traders the volume is still low so manipulating the market is harder than imagined.
Daytraders – Quick-term profiting
If you are used to trading with Bitcoin, stocks and commodities you already know how rewarding for a trader it is to keep his/her eyes on clear uptrends and downtrends. In the beginning of this writing we mentioned Bloomberg which pointed out that commodities on average have a return of 2.18% without the dividends that quities provide, and with considerably more volatility.
The Payment Analyst at Morgan Stanley – James Faucette noted out:
“Bitcoin owners are reluctant to use the cryptocurrency given its rate of appreciation, more evidence that bitcoin is more asset than currency,”