If you are an investor or early adopter of the Bitcoin digital currency then an important metric that you will want to monitor is the Bitcoin exchange rate as it relates to US dollars as denominated by the symbol BTC. It is realistic to say that Bitcoins are still in their early adopter phase of technology even though an increasing number of stores and ATMs accept the digital currency, and anyone who has some of their money denominated in Bitcoins should monitor the exchange rate on a regular basis to see what their investment constitutes in a dollar equivalent.
Trading The Bitcoin Exchange Rate
There are some advanced traders and investors who are participating in the Bitcoin digital marketplace that are not buying the digital currency to buy and hold it over a long period of time, but instead are trading the Bitcoin exchange rate up and down the same way that you would trade the price of a major currency pair. It is also important to understand the differences between denominating your money in Bitcoins and denominating it in a regular first world currency such as the dollar, pound, or euro.
There is a lot of safety and financial stability in the major world currencies that exists and will persist, yet there are a number of revolutionary benefits associated with Bitcoin that are seen as very promising even though it is still a bit risky. One of the major differences is that all Bitcoins exist in digital form as a piece of software code instead of being a physical asset that you can touch with your hands like cash or gold. This means that all of your Bitcoin holdings are contained in your digital wallet which is a software program that can run on your desktop computer, laptop, or mobile phone.
The Price Volatility Associated With Bitcoins
One of the characteristics about investing or trading in Bitcoins that many individuals see as a risky disadvantage is that the price of Bitcoins is extremely volatile and it has been known to move over $100 in just several days. This is not a positive feature if you are someone who is trying to passively invest in Bitcoins by buying and holding them in order to try and see your asset value increase over time. While Bitcoin is still in its experimental phases there are more and more people using the new digital currency every day, and by learning about how the Bitcoin exchange rate performs you can decide if you are ready to jump on the Bitcoin bandwagon.