‘The future is crypto,’ says CMTrading CEO
CMTrading CEO Daniel Kibel shares advice for trading crypto in SA
There's not a lot you can count on in the stock market but cryptocurrency being volatile is one. Bitcoin has experienced its biggest rally in the past month as the cryptocurrency breached the psychological $50,000 level on August 23. Similarly, rival cryptos such as ethereum and ripple have also increased to $3,245 and $1.29 respectively.
The crypto market, especially bitcoin, saw record highs and disastrous lows earlier in 2021. Despite its tumultuous performance, there’s a huge amount of wealth to be made as the total crypto market is valued at more than $2-trillion.
Trading crypto in SA
SA has seen a rapid increase in the number of crypto assets traded locally. In June 2021 the SA Treasury revealed there are at least two-million local retail investors in crypto, amounting to $2bn in transaction volumes.
Given crypto’s history of volatility, the current increase doesn’t guarantee a long-term reversal. As a spike in prices ripples through the crypto market, many traders are asking — is now a good time to invest in crypto?
CMTrading CEO Daniel Kibel shares his thoughts on crypto volatility and highlights trends for SA traders.
Q: What’s driving the recent crypto rally?
“Bitcoin, and in fact the entire crypto market, has proven to be an asset that’s prone to huge price movements based on rumours and events. PayPal recently announced it would allow customers in the UK to use bitcoin and other cryptocurrencies. This provides legitimacy for the entire crypto market and begins a chain reaction of buying, driving up the price of all digital coins.”
Q: Is bitcoin worth investing in? What does it take to make a profit?
“Bitcoin is like any asset - if you purchase it and it goes up, you make a profit, and if it drops you lose money. The issue is the huge price movements seen in bitcoin, often thousands of dollars. If the low is about $47,000 and the upside high is $48,000, that's a big move for most traders. It means you need a lot of capital. We’ve seen daily movements from $5,000 to even $10,000. This makes crypto a big risk though there are many people making money.
“Sadly, a lot of people are losing huge amounts because even though they've correctly judged the price direction, they lose out due to funding. For instance, if you were to buy it earlier in August, you would’ve bought it at $48,000 and it went up to $49,500. Happy days, right? But now it's gone all the way back down to $47,000. There are big moves in the crypto market and it's something that people need to be aware of.
Q: Given the huge movements, how risky is crypto trading?
“Personally, I prefer trading currencies or indices because they're more stable. They don't move in the huge amounts that crypto does. It's super high risk yet it sees high returns.
“Due to the size of a single bitcoin, the value of it is nearing $50,000. You need a lot of money just to be able to hold a position in the crypto market.”
Q: Will we see widespread adoption of crypto?
“I believe it's already happening. The future is without any question crypto. What remains to be seen is whether it’s through bitcoin or some other crypto asset.
“We’re seeing the adoption of crypto by some of the largest financial companies in the world. It's clear that when one starts, people believe in a snowball effect; If one starts then every other company will start accepting crypto.”
Q: Advice for trading crypto?
“Be careful and come to terms with the huge volatility in the market. You must be patient and understand you might not have enough money to hold a position if the trend goes against you. It's a good market and traders are making a lot of money. You need to have enough capital so that even when the market goes against you, you can still hold your position.”
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This article was paid for by CMTrading.