The forex market is the largest and most liquid market in the world. It runs 24 hours a day, 7 days a week, all over the world. As if forex is not dynamic enough, cryptocurrencies (like Bitcoin) are adding a fascinating new dimension to currency trading. You see, a few forex brokers are now accepting bitcoins for currency trading. Should you jump in and begin using your hard-mined bitcoins in the forex markets? In this article, we’ll cover the risks and benefits of trading forex using bitcoins. (See related 5 Tips For Selecting A Forex Broker.) A Standard Forex Trade First, here is an example of how a standard forex trade works. Imagine you are an American trader betting on the British pound/U.S. dollar currency pair (GBP/USD). You deposit $100 with your forex broker. Assuming the rate of $1 = £0.5, you will receive £50 for your $100. If the GBP/USD rate changes to 0.45, you close the position to 50/0.45 = $111.11. That is, you make a 11.11% profit over your initial $100 deposit. A Forex Trade Using Bitcoin Now, let’s move on to an example of a forex trade using bitcoin. First, you open a forex trading account with a broker who accepts bitcoins (like AvaTrade, eToro or Liteforex). You then deposit 2 bitcoins from your digital wallet to the forex broker’s digital wallet. Assuming the current bitcoin to U.S. dollar rate is 1 bitcoin = $500, your deposit of 2 bitcoins is equal to $1,000. Now, assume that you want to take a position in British pounds. If the exchange rate is £0.5 = $1, you will receive £500. After some time, the GBP/USD rate changes to 0.45, and you square off your position to get $1,111.11 in your trading account. You have made a tidy 11.11% profit and you are ready to cash out. However, suppose by this time the bitcoin to U.S. dollar rate has changed to 1 bitcoin = $560. When you withdraw your money in bitcoins, you receive ($1,111.11/$560) = 1.984 bitcoins. Despite the fact that your bet on British pounds earned you an 11.11% profit (from $1,000 to $1,111.11), the fluctuation in the bitcoin to U.S. dollar rate means that you still sustain a loss of .016 bitcoin, or -0.8%. (initial deposit of 2 bitcoins — 1.984 bitcoins = .016 bitcoin). However, had the bitcoin to U.S. dollar exchange rate changed to 1 bitcoin = $475, you would realize a profit from both the forex trade and the bitcoin exchange. In other words, you would have received ($1,111.11/$475) = 2.339 bitcoins, a profit of 16.95%. Beyond the exchange rate fluctuations impacting profit and loss, there are other benefits and risks to consider before trading forex with bitcoin. Benefits of Trading Forex With Bitcoin Decentralized Valuations: One major advantage of trading forex with bitcoin is that there is no central bank to randomly change bitcoin valuations. Due to its decentralized nature, the bitcoin rates are free from geopolitical influence as well from macroeconomic issues like country-specific inflation or interest rates. High Leverage: Most forex brokers offer high leverage ranging up to 1:1000 for bitcoin trades. Experienced traders can use this to their benefit. However, such high margins should also be approached with great caution as they also magnify the loss potential. No Transaction Costs: All bitcoin transactions are digitally recorded on public networks without any involvement from banks or clearing agencies. Hence, there are usually no transaction costs involved in bitcoin, even for global transfers. Brokers pass these benefits to the clients by not imposing any deposit or withdrawal fee for bitcoin transactions. This improves trade profits. Low Deposit Amount: One can start with as little as $25 with some bitcoin forex trading firms. As promotional offers, a few forex trading firms even offer new members a matching deposit amount. Traders should take care to check that all brokers are appropriately regulated. Low Cost of Trading: Most forex brokers that accept cryptocurrency are keeping brokerage costs very low to attract the new bitcoin-trading clients. Security: With bitcoin transactions, you don’t need to reveal your bank account or credit card details to deposit or withdraw money. Especially when dealing with foreign brokers, this is a huge advantage in terms of cost and financial security. No Global Boundaries: Bitcoin transactions have eliminated global boundaries. Using bitcoin, a trader based in Africa can trade forex through a broker based in the United Kingdom. Regulatory challenges may remain a concern, but if both traders and brokers are willing to transact, then all geographical boundaries are eliminated. Risks of Trading Forex with Bitcoin Bitcoins trade on multiple exchanges, and exchange rates vary. Traders must ensure they understand which bitcoin exchange rates the forex broker will be using. (See related A Look At The Most Popular Bitcoin Exchanges.) While receiving bitcoin deposits from clients, almost all brokers instantly sell the bitcoins and hold the amount in U.S. dollars. Even if a trader does not take a forex trade position immediately after the deposit, he or she is still exposed to the bitcoin to U.S. dollar rate risk from deposit to withdrawal. Historically, bitcoin prices have exhibited high volatility. In absence of regulations, volatility can be used by the unregulated brokers to their advantage and to a trader’s disadvantage. For example, assume the intraday bitcoin rate fluctuates from $500 to $530 U.S. dollars per bitcoin. For an incoming deposit of 2 bitcoins, the unregulated broker may apply lowest rates to credit the trader $1,000 (2 bitcoins * $500 = $1000). However, once the trader is ready to make a withdrawal, the broker may use the lowest exchange rate and instead of the original 2 bitcoins deposited, the trader only receives 1.88679 bitcoins ($1,000/$530 = 1.88679 bitcoins). In reality, the unregulated broker may be exchanging bitcoins and dollars at say $515, and pocketing the difference at the expense of the client. (For more see Why Is Bitcoin's Value So Volatile?) Deposited bitcoins are prone to theft by hacking, even from the broker’s digital wallet. To cut down on this risk, look for brokers who have insurance protection against theft. (See related Can Bitcoin Be Hacked?) High leverage is risky for newbie traders who may not understand the exposure. Cryptocurrency is a different asset class altogether and has its own valuation mechanism. Trading forex with bitcoins essentially introduces a new intermediate currency which can impacts profit and loss in unexpected ways. Any money that is not locked down in a trader’s base currency is a risk. The Bottom Line Although cryptocurrencies, like bitcoin, are gaining popularity, there are still many associated risks. In forex trading, dealing in a decentralized currency that offers global transactions with no fees is an advantage. But the tradeoff is essentially adding a third currency to what was a trading pair. Traders who want to take on that risk should use only locally regulated forex brokerages. Bitcoin USD is the best currency pair for trading now. I started owning Bitcoin from Jan 2017. And now it's price was increased 9.5 times. But it isn't my best investment. My best investment is also Bitcoin but Bitcoin CFD investment. I started trading Bitcoin CFD from Sept 2017. I now, my profit is 7 times my deposit amount. I found that, trade BTCUSD (Bitcoin/USD) is much easier and predictable than any currency pairs. For EURUSD, it's hard to forecast the trends. Sometime there are good news but the price go opposite the trends. Because other market news affect to those currency pairs. But for Bitcoin, it's very easy to forecast the trend. For Bitcoin trading, when there are good/bad news, the price will follow exactly the news. And the trend is longer. That why i can make 7 times profit for 1.5 months. It's higher than owning Bitcoin. So, come back to our topic. What forex broker is the best for trading Bitcoin? Most of forex brokers just offer Bitcoin trading on Sept 2017. And this is the best opportunity for Bitcoin traders. Because now: - All transactions will be execute less than 0.1 seconds. - With the same money, you can buy more 50 times Bitcoin. Because you can use leverage 1:50. - It's easier to make payment by Credit card, Wire, e-wallet,... - And you can invest even when Bitcoin price is going down. - Safer trading system. Last year, there are 2 Bitcoin brokers were closed but forex brokers are more reliable. Because most of them already offered services over 10 years. - Better and safer trading systems. There are many Bitcoin brokers were hacked. But there isn't any forex brokers was hacked last year. So, it means: forex brokers are higher fund security than Bitcoin brokers. Because of all above reasons, I think we should trade Bitcoin CFD than owning Bitcoins. So, what forex broker should you trade Bitcoin? 1. Exness is the best forex broker for trading Bitcoin As usual, in order to find out the best broker, i will list down top brokers allowed Bitcoin trading first. After that i create accounts in all these brokers. And manually compare trading condition among them such as: spread, commission, leverage, payment system,... So, top forex brokers allowed Bitcoin trading are: 1. Exness.com 2. XM.com 3. FXTM.com 4. Hotforex.com 5. FxPro.com Why Exness is the best broker for Bitcoin trading? - Exness is the biggest retail forex broker. So, you don't have to worry about you fund. - Exness offers the lowest spread for Bitcoin trading. Only 5$ spread per coin. - Exness offers highest leverage: 1:20. - Instant payment system, so you can get your money for seconds. Check Exness Bitcoin trading conditions here 2. XM is second good forex broker for trading Bitcoin Of course, all traders know XM. XM is the most popular forex brokers on the world. So, don't worry about your fund when you trade with XM. But why XM only ranks #2? Because XM offers higher spread than Exness. For Bitcoin, XM charges traders at least 12$/coin. So, it means, for each Bitcoin trading, you have to pay more 7$ for XM than Exness. Check XM's Bitcoin trading conditions here 3. Hotforex is third good forex broker for trading Bitcoin I like Hotforex because of good trading conditions and good local supporters. But their reputation is not good as XM and Exness. Their forex trading volume also isn't high as above 2 brokers. Besides, spread for trading Bitcoin also higher. Hotforex offers spread from 15pips (15$). This spread is a little higher than XM and Exness but it's still good. You can check Hotforex Bitcoin trading conditions here 4. FxPro and and FXTM is the same 4th position. Actually, FxPro is a little better because of its reputation. But for Bitcoin trading conditions, both brokers are similar. They offer the same spread for Bitcoin trading is 17$/coin. This spread is much higher than other brokers. Over the past few years, cryptocurrencies have been making a splash in the financial ecosystem. Every day we can read in the news how easy it is to invest a small sum of money and yet generate a stellar profit. Just remember the story about a 19-year old billionaire who invested $1000 and now he has 401 bitcoins worth $3.4 million. One of the most effective ways to explain what cryptocurrencies are and how they work is to compare them with forex trading, a practice most of the traders are already familiar with. Here are a few facts about cryptocurrencies and forex you need to know before you choose where to invest. What is Forex Trading? Forex or the foreign exchange market is the place where people can sell, buy, or exchange currencies. The idea behind it is pretty simple- you want to buy a currency at one price and sell it at a higher price in order to make a profit. Currencies are always grouped into pairs to show the exchange rate between them. Of course, the price of one currency is always determined by another currency. Some of the most commonly traded forex pairs, also known as major pairs are EUR/USD, EUR/GBP, and USD/JPY, and USD/CHF. However, you can also trade some minor currencies, known as exotics, such as MXN (the Mexican pesos), PLN (the Polish zloty), RSD (the Serbian dinar) or the NOK (the Norwegian krone). Bitcoin vs. Forex Trading: Understanding the Difference The Benefits of Forex Trading With the rise of forex trading platforms, today everyone can get involved in trading currencies. Here are a few reasons why you should make this sort of investment: Fluidity Forex is the largest and definitely the most liquid financial market. This is the market with many bids, low spreads, and low volatility. Given the fact that there are numerous buyers and sellers, it is pretty easy to execute a trade fast and at a desirable price. 24-hour trading liquidity Forex is the over-the-counter market, meaning that investors can instantly take actions according to currency fluctuations caused by numerous economic, political or social events. Most importantly, this market is open 24 hours a day, 5 days a week. There are 4 major trading sections each day, matching the opening hours of banks in New York, London, Tokyo, and Sydney. High leverage Currency movements are measured in pips, the tiniest variations in the currency price. However, since these fluctuations are negligible, currency transactions need to be conducted in larger amounts, enabling you to turn these small sums of money into significant profits. But, this puts your money at risk. For example, when you carry out some larger transactions, even the tiniest variation in the currency price can bring you either notable profits or loss. What’s also great about forex is that it gives you the freedom to choose a proper leverage sum, in accordance with your financial health and preferences. Accessibility Due to the volatility of the market, you can invest a small sum of money and generate a huge ROI. For instance, you can start with a deposit of $100. For small-size and inexperienced traders, this is probably the most significant feature of forex trading. Major Drawbacks of Forex Even though forex has been around for quite some time now and it’s considered pretty safe, investing in it still comes at a price. Before you get involved in it, you need to learn the basics of forex trading and understand its major drawbacks. Here are some of them: The forex market is the largest and most liquid market in the world. It runs 24 hours a day, 7 days a week, all over the world. As if forex is not dynamic enough, cryptocurrencies (like Bitcoin) are adding a fascinating new dimension to currency trading. You see, a few forex brokers are now accepting bitcoins for currency trading. Should you jump in and begin using your hard-mined bitcoins in the forex markets? In this article, we’ll cover the risks and benefits of trading forex using bitcoins. (See related 5 Tips For Selecting A Forex Broker.) A Standard Forex Trade First, here is an example of how a standard forex trade works. Imagine you are an American trader betting on the British pound/U.S. dollar currency pair (GBP/USD). You deposit $100 with your forex broker. Assuming the rate of $1 = £0.5, you will receive £50 for your $100. If the GBP/USD rate changes to 0.45, you close the position to 50/0.45 = $111.11. That is, you make a 11.11% profit over your initial $100 deposit. A Forex Trade Using Bitcoin Now, let’s move on to an example of a forex trade using bitcoin. First, you open a forex trading account with a broker who accepts bitcoins (like AvaTrade, eToro or Liteforex). You then deposit 2 bitcoins from your digital wallet to the forex broker’s digital wallet. Assuming the current bitcoin to U.S. dollar rate is 1 bitcoin = $500, your deposit of 2 bitcoins is equal to $1,000. Now, assume that you want to take a position in British pounds. If the exchange rate is £0.5 = $1, you will receive £500. After some time, the GBP/USD rate changes to 0.45, and you square off your position to get $1,111.11 in your trading account. You have made a tidy 11.11% profit and you are ready to cash out. However, suppose by this time the bitcoin to U.S. dollar rate has changed to 1 bitcoin = $560. When you withdraw your money in bitcoins, you receive ($1,111.11/$560) = 1.984 bitcoins. Despite the fact that your bet on British pounds earned you an 11.11% profit (from $1,000 to $1,111.11), the fluctuation in the bitcoin to U.S. dollar rate means that you still sustain a loss of .016 bitcoin, or -0.8%. (initial deposit of 2 bitcoins — 1.984 bitcoins = .016 bitcoin). However, had the bitcoin to U.S. dollar exchange rate changed to 1 bitcoin = $475, you would realize a profit from both the forex trade and the bitcoin exchange. In other words, you would have received ($1,111.11/$475) = 2.339 bitcoins, a profit of 16.95%. Beyond the exchange rate fluctuations impacting profit and loss, there are other benefits and risks to consider before trading forex with bitcoin. Benefits of Trading Forex With Bitcoin Decentralized Valuations: One major advantage of trading forex with bitcoin is that there is no central bank to randomly change bitcoin valuations. Due to its decentralized nature, the bitcoin rates are free from geopolitical influence as well from macroeconomic issues like country-specific inflation or interest rates. High Leverage: Most forex brokers offer high leverage ranging up to 1:1000 for bitcoin trades. Experienced traders can use this to their benefit. However, such high margins should also be approached with great caution as they also magnify the loss potential. No Transaction Costs: All bitcoin transactions are digitally recorded on public networks without any involvement from banks or clearing agencies. Hence, there are usually no transaction costs involved in bitcoin, even for global transfers. Brokers pass these benefits to the clients by not imposing any deposit or withdrawal fee for bitcoin transactions. This improves trade profits. Low Deposit Amount: One can start with as little as $25 with some bitcoin forex trading firms. As promotional offers, a few forex trading firms even offer new members a matching deposit amount. Traders should take care to check that all brokers are appropriately regulated. Low Cost of Trading: Most forex brokers that accept cryptocurrency are keeping brokerage costs very low to attract the new bitcoin-trading clients. Security: With bitcoin transactions, you don’t need to reveal your bank account or credit card details to deposit or withdraw money. Especially when dealing with foreign brokers, this is a huge advantage in terms of cost and financial security. No Global Boundaries: Bitcoin transactions have eliminated global boundaries. Using bitcoin, a trader based in Africa can trade forex through a broker based in the United Kingdom. Regulatory challenges may remain a concern, but if both traders and brokers are willing to transact, then all geographical boundaries are eliminated. Risks of Trading Forex with Bitcoin Bitcoins trade on multiple exchanges, and exchange rates vary. Traders must ensure they understand which bitcoin exchange rates the forex broker will be using. (See related A Look At The Most Popular Bitcoin Exchanges.) While receiving bitcoin deposits from clients, almost all brokers instantly sell the bitcoins and hold the amount in U.S. dollars. Even if a trader does not take a forex trade position immediately after the deposit, he or she is still exposed to the bitcoin to U.S. dollar rate risk from deposit to withdrawal. Historically, bitcoin prices have exhibited high volatility. In absence of regulations, volatility can be used by the unregulated brokers to their advantage and to a trader’s disadvantage. For example, assume the intraday bitcoin rate fluctuates from $500 to $530 U.S. dollars per bitcoin. For an incoming deposit of 2 bitcoins, the unregulated broker may apply lowest rates to credit the trader $1,000 (2 bitcoins * $500 = $1000). However, once the trader is ready to make a withdrawal, the broker may use the lowest exchange rate and instead of the original 2 bitcoins deposited, the trader only receives 1.88679 bitcoins ($1,000/$530 = 1.88679 bitcoins). In reality, the unregulated broker may be exchanging bitcoins and dollars at say $515, and pocketing the difference at the expense of the client. (For more see Why Is Bitcoin's Value So Volatile?) Deposited bitcoins are prone to theft by hacking, even from the broker’s digital wallet. To cut down on this risk, look for brokers who have insurance protection against theft. (See related Can Bitcoin Be Hacked?) High leverage is risky for newbie traders who may not understand the exposure. Cryptocurrency is a different asset class altogether and has its own valuation mechanism. Trading forex with bitcoins essentially introduces a new intermediate currency which can impacts profit and loss in unexpected ways. Any money that is not locked down in a trader’s base currency is a risk. The Bottom Line Although cryptocurrencies, like bitcoin, are gaining popularity, there are still many associated risks. In forex trading, dealing in a decentralized currency that offers global transactions with no fees is an advantage. But the tradeoff is essentially adding a third currency to what was a trading pair. Traders who want to take on that risk should use only locally regulated forex brokerages. Bitcoin USD is the best currency pair for trading now. I started owning Bitcoin from Jan 2017. And now it's price was increased 9.5 times. But it isn't my best investment. My best investment is also Bitcoin but Bitcoin CFD investment. I started trading Bitcoin CFD from Sept 2017. I now, my profit is 7 times my deposit amount. I found that, trade BTCUSD (Bitcoin/USD) is much easier and predictable than any currency pairs. For EURUSD, it's hard to forecast the trends. Sometime there are good news but the price go opposite the trends. Because other market news affect to those currency pairs. But for Bitcoin, it's very easy to forecast the trend. For Bitcoin trading, when there are good/bad news, the price will follow exactly the news. And the trend is longer. That why i can make 7 times profit for 1.5 months. It's higher than owning Bitcoin. So, come back to our topic. What forex broker is the best for trading Bitcoin? Most of forex brokers just offer Bitcoin trading on Sept 2017. And this is the best opportunity for Bitcoin traders. Because now: - All transactions will be execute less than 0.1 seconds. - With the same money, you can buy more 50 times Bitcoin. Because you can use leverage 1:50. - It's easier to make payment by Credit card, Wire, e-wallet,... - And you can invest even when Bitcoin price is going down. - Safer trading system. Last year, there are 2 Bitcoin brokers were closed but forex brokers are more reliable. Because most of them already offered services over 10 years. - Better and safer trading systems. There are many Bitcoin brokers were hacked. But there isn't any forex brokers was hacked last year. So, it means: forex brokers are higher fund security than Bitcoin brokers. Because of all above reasons, I think we should trade Bitcoin CFD than owning Bitcoins. So, what forex broker should you trade Bitcoin? 1. Exness is the best forex broker for trading Bitcoin As usual, in order to find out the best broker, i will list down top brokers allowed Bitcoin trading first. After that i create accounts in all these brokers. And manually compare trading condition among them such as: spread, commission, leverage, payment system,... So, top forex brokers allowed Bitcoin trading are: 1. Exness.com 2. XM.com 3. FXTM.com 4. Hotforex.com 5. FxPro.com Why Exness is the best broker for Bitcoin trading? - Exness is the biggest retail forex broker. So, you don't have to worry about you fund. - Exness offers the lowest spread for Bitcoin trading. Only 5$ spread per coin. - Exness offers highest leverage: 1:20. - Instant payment system, so you can get your money for seconds. Check Exness Bitcoin trading conditions here 2. XM is second good forex broker for trading Bitcoin Of course, all traders know XM. XM is the most popular forex brokers on the world. So, don't worry about your fund when you trade with XM. But why XM only ranks #2? Because XM offers higher spread than Exness. For Bitcoin, XM charges traders at least 12$/coin. So, it means, for each Bitcoin trading, you have to pay more 7$ for XM than Exness. Check XM's Bitcoin trading conditions here 3. Hotforex is third good forex broker for trading Bitcoin I like Hotforex because of good trading conditions and good local supporters. But their reputation is not good as XM and Exness. Their forex trading volume also isn't high as above 2 brokers. Besides, spread for trading Bitcoin also higher. Hotforex offers spread from 15pips (15$). This spread is a little higher than XM and Exness but it's still good. You can check Hotforex Bitcoin trading conditions here 4. FxPro and and FXTM is the same 4th position. Actually, FxPro is a little better because of its reputation. But for Bitcoin trading conditions, both brokers are similar. They offer the same spread for Bitcoin trading is 17$/coin. This spread is much higher than other brokers. Over the past few years, cryptocurrencies have been making a splash in the financial ecosystem. Every day we can read in the news how easy it is to invest a small sum of money and yet generate a stellar profit. Just remember the story about a 19-year old billionaire who invested $1000 and now he has 401 bitcoins worth $3.4 million. One of the most effective ways to explain what cryptocurrencies are and how they work is to compare them with forex trading, a practice most of the traders are already familiar with. Here are a few facts about cryptocurrencies and forex you need to know before you choose where to invest. What is Forex Trading? Forex or the foreign exchange market is the place where people can sell, buy, or exchange currencies. The idea behind it is pretty simple- you want to buy a currency at one price and sell it at a higher price in order to make a profit. Currencies are always grouped into pairs to show the exchange rate between them. Of course, the price of one currency is always determined by another currency. Some of the most commonly traded forex pairs, also known as major pairs are EUR/USD, EUR/GBP, and USD/JPY, and USD/CHF. However, you can also trade some minor currencies, known as exotics, such as MXN (the Mexican pesos), PLN (the Polish zloty), RSD (the Serbian dinar) or the NOK (the Norwegian krone). Bitcoin vs. Forex Trading: Understanding the Difference The Benefits of Forex Trading With the rise of forex trading platforms, today everyone can get involved in trading currencies. Here are a few reasons why you should make this sort of investment: Fluidity Forex is the largest and definitely the most liquid financial market. This is the market with many bids, low spreads, and low volatility. Given the fact that there are numerous buyers and sellers, it is pretty easy to execute a trade fast and at a desirable price. 24-hour trading liquidity Forex is the over-the-counter market, meaning that investors can instantly take actions according to currency fluctuations caused by numerous economic, political or social events. Most importantly, this market is open 24 hours a day, 5 days a week. There are 4 major trading sections each day, matching the opening hours of banks in New York, London, Tokyo, and Sydney. High leverage Currency movements are measured in pips, the tiniest variations in the currency price. However, since these fluctuations are negligible, currency transactions need to be conducted in larger amounts, enabling you to turn these small sums of money into significant profits. But, this puts your money at risk. For example, when you carry out some larger transactions, even the tiniest variation in the currency price can bring you either notable profits or loss. What’s also great about forex is that it gives you the freedom to choose a proper leverage sum, in accordance with your financial health and preferences. Accessibility Due to the volatility of the market, you can invest a small sum of money and generate a huge ROI. For instance, you can start with a deposit of $100. For small-size and inexperienced traders, this is probably the most significant feature of forex trading. Major Drawbacks of Forex Even though forex has been around for quite some time now and it’s considered pretty safe, investing in it still comes at a price. Before you get involved in it, you need to learn the basics of forex trading and understand its major drawbacks. Here are some of them:
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