What Is Vechain & How to Trade VET

VeChainThor, often shortened to Vechain, is a blockchain platform designed specifically for supply chain management and data tracking applications. What is Vechain? How does it work? What can influence the price of the VeChain (VETUSD) token? How can CFD trading be used to trade Vechain (VET) over the short term?

Here's a deeper dive into what VeChain offers and the potential of its native cryptocurrency:

TL;DR

• The Vechain project was launched in 2015 to improve Ethereum’s history and legacy.
• VeChain uses distributed ledger technology (DLT) to revolutionise company procedures and supply chain management. By streamlining intricate information flow and procedures, it aims to provide more efficiency and transparency.
• In 2017, the VET token was available for trading with an Initial Coin Offering (ICO).
• The VeChain ecosystem functions on a two-token model. VET serves as the utility and governance token, while VTHO acts as the transaction fee and incentive token.
• Mid-July 2024, VET was the 41st largest token by market capitalisation.
• Several factors can influence the price of VeChain (VET), including network activity, overall market sentiment, adoption rate, partnerships with major corporations, and news about the network.
• There are two primary ways to gain exposure to VeChain (VET): purchasing VET coins directly through exchanges or trading VET Contracts For Difference (CFDs) with CFD providers like Plus500.

What Is Vechain?

VeChainThor acts as the core layer 1 blockchain for the VeChain ecosystem. This public blockchain is specifically designed for large-scale adoption by businesses of all sizes. It aims to provide a sustainable and scalable foundation for building enterprise-grade blockchain applications, particularly within the realm of supply chain management and data tracking.

How Does Vechain Work?

VeChain is the first blockchain project to focus on supply chain management. Its core mission revolves around creating a more transparent, secure, and efficient global supply chain ecosystem.

Here's a breakdown of how VeChain works:

• Building Trust Through Digital Collaboration: VeChain bridges the gap between companies by providing a secure platform for data exchange, fostering trust and collaboration throughout the supply chain network.
• Empowering Businesses With Advanced Tools: VeChain offers tools that streamline data transfer and management, including track-and-trace functionalities to real-time data visualisation.

VeChain assigns a unique digital identity to each product. This identity can be embedded using various methods, including NFC chips, RFID chips and 2D QR codes.

Vechain’s History

• 2015: Foundation of the VeChain project as a modified fork of Ethereum by Sunny Lu, who was the former CIO of Louis Vuitton China.
• 2017: Vechain’s ICO.
• 2018: Launch of the VechainThor, the layer 1 blockchain that is the foundation of the VeChain ecosystem. The genesis block was mined in June 2018.
• 2019: Possibility for users to use built-in smart contracts.
• 2020-2021: Several projects were up and running on the platform. These include E-HCert, a digital lab test wallet implemented at Aretaeio Hospital in Cyprus for secure data storage, and CSecure, a traceability platform Bayer (BAYN.DE) uses to track clinical trial supply chains.
• 2022: Launch of VeUSD stablecoin and Vechain Accelerator program.
• June 2024: The fintech Revolut decided to list VET tokens in its Crypto trading platform, which might attract more traders towards Vechain (VET).

Vechain Price’s Milestone

Like many frequently traded cryptocurrencies, VeChain (VET) exhibits volatility, meaning its price can experience significant fluctuations. To help you understand VET's historical performance, here's a look at some key price milestones:

• 13 Mach, 2020: All-time low of $ 0.00165.
• 19 April, 2021: All-time high of $ 0.282922.

What Can Influence the Price of the Vechain (VET) Token?

Bitcoin (BTCUSD) reigns supreme on the cryptocurrency market. Due to its dominance, price movements in Bitcoin often have a ripple effect, impacting the broader cryptocurrency market, including prices of VeChain (VET).

While past performance is not necessarily indicative of future results, understanding the factors influencing Bitcoin's price can provide valuable insights that may also impact VET's price.

Let’s take a closer look at some of the Bitcoin and Vechain price drivers:

• Use Cases & Adoption Rates: Broader adoption of VeChain technology across various industries can significantly drive up the demand for VET tokens. Increased real-world use cases demonstrate the project's value, credibility and utility, potentially attracting more users and traders.
• Strategic Partnerships: Collaborations with established companies like Haier, Givenchy, and PwC can boost trader confidence in VeChain's potential. Successful partnerships showcase the platform's credibility and expand its reach, potentially leading to a rise in VET's price.
• Crypto-Trader Sentiment: Overall market sentiment towards cryptocurrencies can impact VET's price. Positive news, exciting developments in the blockchain industry, or a general bullish mood can increase demand for VET, potentially pushing the price upwards. Conversely, negative sentiment or bearish sentiment can trigger sell-offs, likely causing the price to drop.
• Token Availability: The total supply of VET tokens and their circulating supply influence their price. A limited circulating supply with high demand can lead to price increases, while a sudden influx of new tokens into circulation could put downward pressure on the price. As of July 2024, 80.99B VET are circulating out of the max supply of 86,71B VET.
• Crypto Regulations: Regulatory developments surrounding cryptocurrencies can significantly impact VET's price. Stringent regulations or government crackdowns on cryptocurrencies can create uncertainty and lead to trader fear, potentially causing a price decline. Conversely, clear and supportive regulations can foster trust and encourage wider adoption, potentially boosting the price of VET.

How to Trade Vechain (VET) with CFDs

Let’s take a closer look at cryptocurrency trading, focusing on CFDs, or Contracts For Difference.

What Are CFDs on Cryptos?

Imagine a contract between you and another party (usually a CFD provider) focusing on the price movement of an asset like a cryptocurrency—this is what a CFD is. With CFDs on cryptocurrencies, you don't actually own the underlying token; you're simply speculating on its price direction (bullish vs. bearish).

If you think the price of the Vechain will go up, you can enter a "long" position and buy a CFD contract on VET. If you think it will go down, you enter a "short" position and short-sell a CFD contract on VET. The profit or loss you make depends on the difference between the price when you enter the CFD contract and the price when you exit.

What Are the Advantages and Risks of Trading Vechain with CFDs?

You’re wondering why trade cryptocurrency with CFDs? Let’s focus on some reasons why traders choose to trade cryptos like VET with this financial derivative:

• Trade VET without Owning Coins: With CFDs, you can trade VeChain price movements without owning any token, avoiding the process of buying and storing VET coins.
• Skip Crypto Wallet Security: Avoid the complexities and potential risks of securing your own VET tokens with CFDs, as you don’t own any tokens with CFD crypto trading.
• Trade both Bullish and Bearish Markets: Capitalise on the VET whether the price goes up (long positions) or down (short positions) by trading rising and falling markets.
• Enhance Portfolio Diversification: Add exposure to VeChain alongside your existing trades for a well-rounded, diversified portfolio. CFD providers usually offer a wide range of financial instruments like indices, shares, commodities, options, ETFs, and Forex*.

* Availability depends on your localisation and regulator.

While CFDs on cryptocurrencies offer potential advantages, they also come with inherent risks that could lead to financial losses. Let’s take a closer look at the most important ones:

• VET's Price Swings Can Be Volatile: VET's inherent volatility means that its price can fluctuate significantly quickly, like most cryptocurrencies, which can lead to unfavourable market movements.
• Leverage: While trading CFDs with leverage can potentially magnify potential profits it can potentially magnify losses as well, which means that leverage increases the risk when trading VET.
• Short-Term Focus Can Lead to Emotional Decisions: The fast-paced nature of CFD trading can create emotional pressure, which can trigger overtrading and impulsiveness, potentially leading to capital loss.

Advantages and Disadvantages of Trading Vechain

Here are some advantages to trade Vechain (VET):

• Real-world Applications: VeChain boasts a clear use case within established industries like supply chain, logistics, and manufacturing. This real-world application can provide stability and potentially drive demand for VET.
• Strong Partnerships Around the World: VeChain has established partnerships with major corporations like BMW (BMW.DE), BYD (1211.HK), and Bayer. These collaborations demonstrate the platform's stability and potential and could also contribute to wider VET adoption.
• Rapid and Cheap Transactions: The average block time on the Vechain network is 10 seconds, while the average transaction cost is lower than $0.01.
• Digital Sustainable Blockchain: The VeChainThor blockchain is powered by a sustainable Proof-of-Authority (PoA) consensus mechanism, resulting in minimal energy consumption. Estimates suggest that running the VeChainThor blockchain for a year uses roughly the same amount of energy as a typical gasoline-powered passenger vehicle over the same period.
• Energy Efficiency Compared to Peers: VeChain's energy consumption seems to be significantly lower than many other blockchains. Estimates indicate that VeChainThor uses just 0.04% of the energy compared to traditional blockchains.
• Uninterrupted Service: Since its launch in 2018, the VeChainThor blockchain boasts a flawless record of zero downtime.

Here are some limits to choosing Vechain (VET) in its cryptocurrency strategy:

• Strong Ties to China: VeChain has its roots in China and boasts a significant presence. Some traders might be wary of VeChain's reliance on the Chinese market. Data stored on the VeChainThor blockchain, especially for companies bridging China and international partners, could be subject to Chinese data privacy regulations, raising concerns about data access and potential censorship. China's history of data policies has drawn international criticism.
• Blockchain Tailored for Transparency with Oversight: VeChain is a blockchain that is well-known for its decentralisation. However, it seems to add a distinctive twist: a permissioned framework. In this arrangement, transactions are not entirely anonymous, as users seem to have to complete some sort of identification and authentication process. VeChain's permissioned model can, therefore, cater to China's emphasis on data traceability and regulatory control within its borders.

Step-by-Step Guide to Trading Vechain with Plus500

Here are a few steps (non-exhaustive) you can follow to get started with VET CFD trading on the Plus500 platform:

1. Know the most important cryptocurrency terms.
2. Understand the trading basics.
3. Write your trading plan.
4. Open and deposit funds in your Plus500 trading account.
5. Use a demo account first with virtual funds.
6. Learn how to trade cryptocurrency with CFD with Plus500.
7. Open your trades on Vechain (VET).
8. Monitor your CFD positions on VET.

Ready to test your Vechain (VET) knowledge? Explore trading VET with CFDs on Plus500.

Vechain Price & Trading - Frequently Asked Questions (FAQs):

What should I be careful of when trading VET tokens?

If you decide to trade Vechain (VET), you should be aware of significant price drivers, such as network activity, partnerships, regulation, and competition, among others. You should also remember that buying, selling and trading cryptocurrencies with Contracts For Difference (CFDs) can be risky, which means that you should consider sound risk management practices. Finally, there are a few common trading mistakes to avoid to maximise your chances of success, such as not having a trading plan or not knowing how to control your emotions when trading.

What are Vechain (VET) trading hours?

The cryptocurrency market operates 24/7, but trading hours for CFDs on cryptocurrencies like the VET can vary depending on the CFD provider you choose.

What are some of Vechain’s partners?

Vechain is a blockchain well known to have built partnerships with various different companies such as Walmart (WMT) China, DNV, BMW, and the government of San Marino.

How can I analyse Vechain’s price fluctuations?

Technical analysis relies on tools like price charts, chart patterns, and technical indicators to identify possible future price movements based on past prices, volumes, and trends. Fundamental analysis assesses VeChain's intrinsic worth by taking into account variables other than price fluctuations, such as Vechain adoption and technology, team dynamics, collaborations, and market mood.

How can I trade VET?

There are various trading strategies to trade VET tokens, and your choice will mostly depend on your trading knowledge and experience, your risk tolerance, your time frame, and your trading goals. Common active trading styles include day trading and swing trading with strategies like news trading, breakout trading, range trading, and support and resistance trading.