We all know that there is a strong connection between progress in blockchain technology and cryptocurrencies. In fact, blockchains are the foundation of every cryptocurrency out there, meaning blockchains and cryptocurrencies are technically different parts of the same system.
Naturally, this means that all cryptocurrency traders and their strategies are affected by blockchains, but more about that in a second.
In addition, blockchain technology is also helping cryptocurrency traders in a way that most people don’t realize.
Therefore, we thought we’d take a closer look at one of the unspoken ways that progress in blockchain technology is helping crypto traders.
Separating Blockchains and Cryptocurrencies
Before we get into the details, we want to make sure that you are aware of the differences between blockchains and cryptocurrencies.
As mentioned, blockchains are the foundation of cryptocurrencies and are what controls how they work and what the cryptocurrencies are used for. For example, a blockchain can be used to transfer money, for quality control, to store customer information, etc.
The cryptocurrency itself is only a token which represents the value of the blockchain and cryptocurrency combined and it can either be used as a currency or an instrument for investments.
Blockchain Supporting Cryptocurrencies
While there are certainly ways that blockchains are making it easier for traders to trade, store their funds, transfer money, and so forth, there is one other connection that many seem to ignore.
You see, blockchains are directly correlated to the value of cryptocurrencies, i.e. the more blockchains are used and the more popular they get, the higher the value of the cryptocurrency will be, at least in theory.
Right now, blockchains are being introduced into our society on different levels, and people are slowly becoming more aware of their existence. And as people get used to blockchains, they will also slowly get used to the associated cryptocurrencies.
In other words, the use of cryptocurrencies is slowly being normalized thanks to blockchains.
So how does this benefit traders, you ask? Let us explain.
Conclusion: Increased Use Means More Trading Opportunities
As the interest in cryptocurrencies grows, the number of people trading digital currencies will also increase. In turn, a bigger trading volume will help raise the value of the cryptocurrencies which will create new lucrative trading opportunities.
Most modern investment platforms today offer cryptocurrencies in some way or another, and according to BullMarketz co-founder Jimmy Norin, crypto assets are a very important aspect traders select trading platforms.
The point we want to emphasize is that blockchains aren’t only making it easier for traders to trade and store funds, but they also have a direct effect on the price of the associated cryptocurrencies.
In other words, as blockchains become bigger and more common, the value of cryptocurrencies will increase and trading opportunities will follow suit.
Therefore, it’s in the trader’s best interest to support the development of blockchains, and we advise all cryptocurrency traders to not only focus on the trading but to also take an interest in the systems that are supporting the instruments.