The discovery of bitcoin has been monumental and is expected to bring big changes to the planet earth. The blockchain aspect is already influencing the way business is done and impacting on how trading bitcoin and other currencies are done. Bitcoin itself has become the yardstick through which other currencies are traded. It has increased the number of online transactions, including giving rise to more than 1500 coins and tokens.
Cryptocurrency traders have resorted to using bitcoin signals to trade other cryptos as well. It helps them gain insight into valuable information that comes in handy when buying certain coins. The insight is critical in helping traders increase their profit margins.
Here are the reasons why other crypto traders rely on and use bitcoin signals to trade other cryptocurrencies.
1. No authority influences it.
Since there is no central authority to influence bitcoin’s mining and distribution, the unit is considered stable. In fact, this is why it is used to determine the direction in which other cryptos will move. Also, it is a unique currency whose fortune is only determined by the steps taken by its enthusiasts. Thus, it is considered an important asset in determining prices of other cryptos.
2. It is less volatile
The price of bitcoin is less susceptible. Also, most of its members are always on the lookout for any false information or misrepresentation that could impact its price. So it is less volatile even though it affects the fortunes of other cryptos.
3. Continued improvement in technology
Advancement in technology has dramatically improved the bitcoins network. Currently, the currency can be viewed on GitHub, allowing its enthusiasts to aggregate its contributions.
Also, it has a wider base of community followers who are majorly developers, reviews, and coin enthusiasts, and block producers. So it makes any one of these groups irrelevant in as far as determining the price of the currency is concerned. But the community members are all over the social media, with users providing free signals on sites like a telegram. When they do this, they bring forth new information, references, and clarifications that help keep the unit’s horizon clear. It helps the coin to form the base on which trading other cryptos is done. In fact, bitcoin is providing the blockchain that other currencies are adopting.
4. It is transparent
Bitcoin is transparent and verifiable. It uses blockchain technology, which is believed to enhance the unit’s transparency. Currently, the technology is being adopted in organizational, political, and economic segments. Other currencies that are quickly aping this technology make bitcoin a serious reference tool when trading cryptos.
5. It is widely accepted.
Bitcoin is widely used, and scores high on the world usage test. It is the reason why merchants easily accept it in many parts of the world. The unit can be stored in wallets and tokens such as ERC-20 compliant. Also, one can safely store it in an Ethereum wallet. It means that it is universally accepted, and so it is likely to influence the demand and supply of other digital currencies.
6. It is being used in portfolio diversification.
Bitcoins have become so vital that it is nowadays used in diversifying the portfolio. Just like owning gold, people are storing their wealth in Bitcoin. It is the reason why it value is always rising. Also, it is easy to travel with. You no longer need sacks of gold or silver as it has been in the past. So anything that signals the direction in which the currency will be moving sends a strong signal on how the price of other cryptos will move.
7. It is becoming a great hedge.
Bitcoin has in the recent past send signals that have resulted in the news. Perhaps there is a lot of news circulating among the crypto community so that anything that happens to bitcoins is likely to impact many other assets, including altcoins. So before traders buy or sell other cryptos they spent their time looking at bitcoins’ trends.