- Regulated service providers only
- No need for wallet
- Get near mid-market rates
- Low Commissions
- Open a “SHORT” position and potentially benefit even when the price is going down
- Free Demo/Practice account
- Trade with Leverage – up to 1:30
Bitcoin (BTC) is the leading cryptocurrency. Many folks buy Bitcoin in the hopes that it will appreciate over time.
Indeed, several leading analysts believe that BTC may reach tens of thousands of dollars per unit in the next few years. Trading prices can swing wildly from one minute to the next, as we have seen in recent times. Bitcoin, like all digital currencies, is subject to major up and down price movements which are counterproductive for investment purposes. Investors seek long-term appreciation of their financial assets. This is only possible if the asset is rising in price over time. Trading is not dependent on appreciation – profits can be made whether markets are rising or falling.
When you trade BTC , contracts for difference (CFDs) can be opened as speculative options. No actual ownership of the asset takes place, and there is no need to pay conversion fees, or platform-related costs. Trading also gives clients the option of shorting BTC (taking a bearish position on the future price) or going long (taking a bullish position on the future price) of the cryptocurrency. These speculative actions make it possible to benefit from the volatility inherent in digital currency trading. As with all forms of digital currency options, security and integrity are paramount. SSL technology and the highest encryption protocols are in place at all times to safeguard against third-party hacks, manipulation, or loss of data.
Among the many benefits of trading as opposed to buying BTC is the ability to profit off price fluctuations in either direction. Further, traders needn’t hold onto the asset to wait for it to appreciate over a long period of time. You can roll over large quantities of money regularly, making it possible to rapidly increase the size of your trading bankroll without tying up your capital in a long-term investment. Since cryptocurrency trading is inherently volatile – like Forex trading – dramatic price swings can take place on a daily basis. As always, it’s imperative that traders perform due diligence on the trading site and platform.
Bitcoin CFD trading is dependent on the underlying market prices. Ideally, you are better served with a minimum spread, however when prices rise, the spread will increase with BTC CFD trading.
Typically, the average spread for a BTC/USD market is around 10.61 at leading brokers with a margin of 7.50% required. BTC/GBP has an average spread of 13.35 with a 7.50% margin requirement. The average spread with BTC/JPY is 800, with a 7.50% margin requirement and the average spread for BTC/EUR is 12.35 with a 7.50% margin requirement. These spreads will vary from one broker to the next, however futures markets are increasingly popular ways to trade any type of commodity, currency, index or stock.
The way a Bitcoin CFD works is as follows: the trader signs a contract to buy a BTC contract at a later date at a specific price. For example, if a client believes that BTC will rise in the future, that client will invest in BTC. Since it is difficult to purchase BTC, it is easier to simply purchase a CFD which tracks the price movement of BTC and has nothing to do with taking ownership of the actual digital currency. The current price of the asset is used to gauge whether the asset appreciates or depreciates at the time of expiry. Traders collect when the price moves in the direction they anticipated, or lose if it moves in the opposite direction.