Crazy for Cryptos? Should traders still be by bowled over Bitcoin?
easyMarkets Head of Risk Management, Evdokia Pitsillidou, speaks about the cryptocurrency phenomena taking the world by storm.
With Bitcoin’s incredible run in 2017 which clearly caught the imagination of the market, have you ever seen cryptocurrencies being traded as much as major currency pairs like the EUR/USD?
It is true that the incredible rally of the cryptocurrencies attracted the attention of investors around the globe. We have experienced unbelievable demand for Bitcoin and there may be a strong probability that the trend will continue. It was an outstanding year for the crypto market until the end of 2017, however, I believe that traditional markets can withstand whatever happens.
What do you see as the advantages of trading cryptocurrencies as a CFD over buying the actual cryptocurrency?
The major advantage of trading cryptocurrencies as a CFD is you can easily trade the upside (buy) and the downside (sell) of the price, whereas when you trade the physical cryptocurrencies you can only benefit from the upside. Trading with easyMarkets, you can have fixed spreads, guaranteed stop loss and take profit, no slippage and no commissions on withdrawals.
Clearly Bitcoin is the most talked about cryptocurrency but can you see Ethereal and Ripple becoming as big?
As investors gain more confidence in the main cryptocurrency ‘Bitcoin’, I believe that other cryptocurrencies will follow and likely surpass it. It seems that Ethereum and Ripple might be the next that are gaining significant market capitalization.
Why do you think so few traders out there taking advantage of shorting cryptocurrencies when they are falling?
I believe that it is more of a psychological reaction for investors to sell (short) any asset. However, it has been observed that our clients are trading both directions, as this is the benefit of trading a CFD.
In your career in Risk Management have you ever seen any instrument behave the way cryptos did? What did you think the first time it broke through the historical 9,000 high?
I have seen a lot of interesting events in my career in Risk Management. Some of the highlights where the SNB ‘black swan’ event in January 2015, Brexit June 2016 and US elections November 2016, adding to this basket of events the thrill of watching the ‘Bitcoin’ rally, it was astounding. I recall Bitcoin trading at 6,000 at the end of October 2017 and the whole world discussing that it had reached its high, then it went on to reach even higher at 9,000, on the 26th of November 2017. Every day since then, we were experiencing new higher highs until it reached its highest of highs at 20,000, on the 17th of December 2017. The daily swings of the cryptocurrencies are very interesting and it seems that the financial world has a new basket of currencies, the so-called ‘Cryptocurrencies’.