Product in the Spotlight: Emercoin – US Dollar
Emercoin is a unique blockchain that allows users the ability to code programmes and develop app suites in a hassle-free and streamlined manner. The main pillar of the platform is its top-notch security against malicious coders. As more and more people come to know about this platform, its value against the US dollar is expected to rise. Compared to other cryptocurrencies, Emercoin performed quite well against the USD at the start of 2018.
In April 2018, with its listing on one of the biggest cryptocurreny exchanges in South Korea, the trading volume of the EMC/USD pair saw huge spikes. It witnessed massive growth of 56% in value in a period of just 7 days leading to April 19, 2018. With future partnerships with the US State Department and US beverage giant Coca Cola, the value of Emercoin is likely to increase.
Let us look at some factors that will influence the US dollar and therefore impact the EMC/USD pair.
Factors that Could Affect the Emercoin/US dollar Pair (EMC/USD)
Some of the key factors influencing the value of the US dollar and therefore the EMC/USD pair include:
1. GDP Forecasts
GDP is the sum total of all goods and services made in the US. This figure governs the direction in which the Federal Reserves forms its monetary policy. Greater the GDP, more is the attraction for foreign investors, leading to a strengthening of the dollar.
2. Federal Reserve Rates
If inflation is low, it means that the value of the country’s goods is high in the global markets. A lower inflation rate usually leads to an increase in the interest rates by the Federal Reserve. A higher interest rate is usually considered good for a currency.
3. US Foreign Policies
The US is considered to be the biggest economy in the world, and an upholder of democracy. It is not uncommon for the US President to be called the “leader of the free world.” US foreign policies impact the forex market, since the US dollar is the world’s reserve currency. US policies also affects the image of the country globally. This image plays a role in how the nation’s goods and services perform worldwide, which determines the inflation and interest rates. International investors are influenced by a strong and popular US leader. Economic policies like tax cuts lead to diminishing trade deficits, while fueling government spending and foreign investments.
4. Retail Sales
The overall sale of American goods and services worldwide is calculated by the Department of Commerce and Census Bureau. It gives an idea about the health of the US economy.
5. Unemployment Levels
If the NFP report indicates higher than expected unemployment levels, it implies that consumption levels are also likely to be low and that the economy is not prospering. Foreign investors will start buying back their local currency by selling off government stocks and bonds, leading to a decline in the value of the USD.
Risk Management in Crypto Investments
The best traders in the world aim for small and consistent profits. Risk management becomes vital in the crypto landscape, due to the high volatility and constant state of uncertainty. It is important to understand that Bitcoin and other altcoins have an inverse relationship amongst themselves, where a rise in Bitcoin value leads to a decline in the prices of other altcoins and vice versa. With this in mind, let’s take a look at some risk management techniques that are effective for crypto trading.
Diversify Your Portfolio
No matter how interesting a crypto concept seems and which prominent personality is associated with an upcoming project, never go all in. A secure portfolio is one that is spread across more than a couple of coins. If a coin is growing, there will come a time when the streak will end. Reduce your exposure and maintain a balance.
Sell on the way to the top
Do not wait to sell at the top, sell on the way to the top. Manage your sell orders in a way that they are a little lower than the previous resistance levels. The percentage of sell orders will depend on your trade plan.
Split Profits to Stay Ahead of the Curve
Spread profits when taking them from a trade. This is a strategy useful for harder times. Do not get tempted to re-invest in altcoins, and remember that most altcoins tend to lose their value over time. This is important when you enter an altcoin trade for medium and long-term investment.
