Bitcoin is a global digital currency, produced by computer distribution, instead of gold and banks. At the time you are reading this, Bitcoin is the world’s largest digital currency, in terms of market capitalization, which means that its total market value is higher than the other digital currencies.

This appealing cryptocurrency, Bitcoin, has offered traders and investors some promising returns. Let’s bring again in memory 2017 when its price climbed to 1000%. At the same time, let’s be careful and tell our self that this digital currency suffers from a high level of volatility, and has gone through sharp declines at some points.

On the other hand, Bitcoin is being preferred by investors since its price movement doesn’t correlate with other asset price movements, such as stocks or bonds. In other words, Bitcoin is an excellent asset to diversify your portfolio of investments.

Portfolio volatility can potentially be reduced through Bitcoin.

Why Bitcoin is such a unique asset?

The Bitcoin idea came into the light to bring humanity a new system of money that does not allow banks or other governments to be part of it as governing parties. It is a digital currency, which is supposed to compete and substitute the common currencies: British Pound, US dollar, euro. Specifically, Bitcoin was the first digital currency to be launched, even though other digital currencies were produced, they never reached the popularity of Bitcoin.

How Is Bitcoin Traded?

There are two ways of trading Bitcoin: through an exchange and over- the- counter service. If you are looking to make large transactions, then you should go for over- the- counter service. One way to trade Bitcoin is to find a professional and well reputable exchange and set up an account with them. For some exchanges, setting up an account requires taking part in the process of identity verification. For example, Coinbase requires new users to upload a picture of their ID card through the app or the website of the company. Of course, there are some standards which should be met, ID picture should be current and fully visible.

The sharp gains and losses of Bitcoin

The time map below shows the sharp gains and losses that Bitcoin went through over the years: