What is Coffee Arabica?
Coffee Arabica, also referred to as Arabian Coffee, is among the most popular commodities in the world together with crude oil, natural gas, gold, etc. Although there are tens of different coffee varieties, the most popular two holding the largest market share are Coffee Arabica and Coffea Canephora, sometimes called Coffea Robusta. But between the two, Coffee Arabica holds the greater market share; more than 70 per cent of coffee production worldwide belongs to Arabica.
Knowing the major suppliers of Coffee Arabica is of crucial importance for traders because adverse events in these countries may cause changes in Arabica value on the markets. Traders should also consider the weather forecast as well as the expected demand levels when trading coffee Arabica.
Coffee Arabica is commonly traded on The Intercontinental Exchange (ICE) and the New York Mercantile Exchange (NYMEX) that is part of the Chicago Mercantile Exchange (CME) Group.
Past performance of Coffee Arabica price
During the last decade the US Coffee Arabica price experienced significant fluctuations under the influence of multiple factors: seasonality, changes in supply and demand, and changes in the exchange rate between the US dollar and the currency of coffee producing countries.
Throughout the decade this commodity had recorded the highest price in the first half of 2011 when it was trading at slightly above $3 (£2.27). Ever since its decade high value, the Coffee Arabica price has depreciated in a trend interrupted with major fluctuations and price swings. The price chart shows that there are a couple of major peaks (including the decade high value) – with each one at a level lower than the previous one and smaller peaks in between. After the peak of around $3 in 2011, the next peaks were in 2014, 2016 and the end of 2019 when it hit a period high of $2.05 (£1.54), $1.64 (£1.23) and $1.36 (£1.02) respectively.
Another interesting feature of the Coffee Arabica price is that it shows the tendency to reach significant bottoms and sizable price retracements. A bottom price of around $1.11 (£0.83) was hit sometime before the major peak in 2014 as well as before the 2016 peak. The Coffee Arabica price reached the lowest level in 2019 and again in 2020 when its spot price was below $0.95 (£0.71).
How to invest in US Coffee Arabica
There are multiple ways through which traders can benefit from changes in Coffee Arabica value. The traditional way to invest in US coffee Arabica is to either buy it or sell it in its physical form, which requires additional logistics and imposes extra costs for storage. Also, profits can be made by trading a derivative instrument such as options, futures or CFDs where Coffee Arabica is the underlying asset. Although derivative instruments enjoy significant popularity, they come with certain drawbacks. For instance, depending on the type of instruments there might be additional costs in the form of a premium or the contract may require delivery of the commodity on a pre-defined date when you invest in US coffee Arabica.
The technological advances and the development of blockchain technology have enabled the creation of new forms of instruments with which traders can invest in US Coffee Arabica and make profits without actually owning the underlying asset. The Dzengi.com tokenised real-life assets and commodities such as US Coffee Arabica give traders the opportunity to benefit from value changes without the limitations of the other instruments.
Trading tokenised US coffee Arabica means that there is no longer a need for the physical purchase of the commodity or entering an agreement which may impose additional costs or which has a maturity date. With the tokenised US Coffee Arabica traders have the possibility to focus on developing their strategy without the need to understand complex agreement terms or go through a delivery process. The blockchain technology employed by Dzengi.com gives an instrument at lower costs (since intermediaries are no longer needed) with swift order execution due to high processing power and higher safety.
Besides, tokenised US Coffee Arabica can be traded directly with crypto, eliminating the need for traders to sell their Bitcoin or Ether balance and get fiat money for trading. The Dzengi.com trading platform has created its tokenised assets to give traders the opportunity to use cryptocurrencies. That eases the trading process and reduces non-value adding costs.
Aside from the above mentioned characteristics of tokenised US coffee arabica, there is one more feature which is largely alluring for traders and this is the opportunity to open positions with a leverage of up to 1:500 depending on the underlying asset. Dzengi.com gives traders the possibility to multiply their profits and to start trading tokenised assets even with a lower amount of available capital. The margin required for tokenised US coffee Arabica is only 2 per cent and this is the portion of the position’s value financed with your capital. For example, you will need to have a capital of $400 (£300) if you want to open a position of $20,000 (£14,980). The traders’ profits are calculated on the overall position value not only on the capital invested.
Tokenised Coffee Arabica trading guide
As tokenised Coffee Arabica is rather easy to understand, the process of trading this instrument is followed with a couple of basic steps:
- Step 1: You can create your profile and account on the Dzengi.com trading platform when you go through the two-factor authentication security.
- Step 2: It is up to you to decide whether you will be trading Coffee Arabica with crypto or fiat and accordingly fund your account.
- Step 3: Choose the value of the preferred position and calculate how much capital you will need with the 2 per cent margin offered by Dzengi.com.
- Step 4: Traders can speculate an increase in Coffee Arabica price and accordingly buy tokenised Coffee Arabica or they could speculate on the decline in value by opening a short position.
- Step 5: The fulfilment of the orders is executed by Dzengi.com when it matches buy with sell orders coming from its clients and the orders which remain unmatched are hedged with Capital.com, LMAX Digital or Binance, Bitstamp, Kraken, NASDAQ, NYSE and Gain Capital.
- Step 6: Coffee Arabica trading on Dzengi.com is also easier when it comes to closing your positions. You have the options to use a stop loss and take profit orders or you can close the position by yourself and collect the profits.
Why trade tokenised US coffee arabica with Dzengi.com
Coffee Arabica trading at Dzengi.com tokenised assets exchange has a number of advantages. Tokens are underpinned by robust and immutable blockchain technology. Opening a trade will give you a token that tracks and moves according to the underlying instrument’s price.
- One-stop crypto trading platform
Trade tokenised US Сoffee Arabica with Bitcoin or Ethereum. Benefit from the commodity's price movements without turning your crypto assets into fiat.
- Tight spreads
Trade tokenised US Coffee Arabica with a tight market spread, benefit from maker rebates and competitive taker fees.
- Leverage
Experienced traders can trade the world's top markets, like US Coffee Arabica, with up to 1:500 leverage.
- Effective risk management
Manage your risks and secure your profits with stop loss and take profit orders. Save your assets with negative balance protection.
- Instant order execution
We have a scalable and low latency order management system, which can execute 50 million trades per second.
- Safe regulation
Dzengi.com operates under new Belarusian regulation with best-in-class AML and KYC laws. Regulatory details and fees are upfront.
