Are there any advantages to trading forex with Bitcoin?
Are there any advantages to trading forex with Bitcoin?
Bitcoin

Are there any advantages to trading forex with Bitcoin?

By Guest post - 16 Aug 2020

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Nowadays, it is possible to exchange crypto like Bitcoin on forex platforms via CFDs that allow you to do trading with a contract based on the prices in the underlying market. 

Trading crypto is not that different from regular FX trading in the sense that you can make a nice profit if the sell rate of the cryptocurrency increases above its opening buy rate. Bitcoin is not normally traded on the foreign exchange market, yet an ever-increasing number of Forex brokers have been including CFDs in their range of tradable assets. Coins like Ripple, Ethereum, and Litecoin have similar price patterns and behavior. 

Most importantly, they do not differ all that much from Bitcoin

If you do not wish to enter into a contract with a CFD provider, do not worry because you can still use crypto to fund your trading account. Bitcoin can be deployed as a reliable means of deposits and withdrawal. 

It is a great way to get your hands on crypto without having to mine your own. 

Blockchain technology has simplified financial transactions; the data that is being recorded is trusted and cannot be changed or moved. Some brokerages do not even demand prospective clients to go through an account verification process before they can deposit or withdraw Bitcoin. No doubt, transactions with Bitcoin are not frowned upon anymore

Bitcoin, together with other cryptocurrencies have added a non-negligible dimension to currency trading. Owing to the fact that no actual cryptocurrencies are exchanged, there is no need for wallets or addresses. Perhaps you were thinking about pursuing Forex trading with Bitcoin. It is not such a bad idea. In what follows, we will discuss the advantages of crypto trading. 

The benefits to consider when trading Forex with Bitcoin 

Crypto assets are decentralized and trade on exchanges all over the world. 

One of the principal advantages of trading Forex with Bitcoin is that the cryptocurrencies are not included in central banks, which means that they can operate without this kind of authority. People are not excluded from services that allow them to take part in activities of economic value. Bitcoin is part of a decentralized system that records transactions in a distributed ledger, which we know under the name of blockchain. Cryptocurrencies are not subject to geopolitical influences or macroeconomic issues. The markets may be decentralized, yet they are held accountable. 

The security behind trading Forex with Bitcoin is extremely high 

Although measures have been set in place to limit the impact of cybercrime, criminal activity still goes on. Malicious actors target organizations trading in financial markets. They can break into the brokerage’s system or the trader’s account extracting personal information that they might find beneficial. The cyberthieves may ask directly for sensitive information while not offering to provide a disclosure statement. 

Trading Forex with Bitcoin is one way of avoiding scams. You do not have to disclose your bank account number or reveal your credit card details to anyone when carrying out a crypto transaction. If you are trading with an offshore Forex broker, things get even better because the confidentiality you enjoy translates into financial security. 

Trading account with high leverage 

In the foreign exchange market, leverage refers to the amount of borrowed capital to a trader’s investment amount. To put it simply, financial leverage is a credit offered by the brokerage to help Forex traders open important positions, which are more profitable by nature. 

It helps traders move assets more easily and take advantage of the opportunities presented by the market. As far as Bitcoin transactions are concerned, Forex brokers offer a leverage of up to 1:1000. You can acquire large amounts of money, not to mention that it is simple to track your potential returns. Nevertheless, it is necessary to exert caution when trading with high leverage due to the potential for loss. 

How to start trading Forex with Bitcoin 

If you do not consider that the Forex market is dynamic enough, trade cryptos via CFDs, which ensure fast execution in this highly volatile market. CFD is an acronym and it stands for contract for difference. 

It represents a derivative product because it enables traders to speculate on the financial markets without having to take ownership of the underlying assets. 

Trading cryptocurrency on a Forex/CFD platform is not the same thing as trading crypto on an exchange. As mentioned previously, you do not possess any digital currency. You simply try to determine whether the value of a certain cryptocurrency will go up or down

CFDs can be traded on both the MT4 and MT5 platform that enables automated financial transactions. The trading platforms can be tailored to the user’s needs, but that is not what sets them apart.

What matters is that MT4 and MT5 make available advanced technology and extensive security.

The point is that you can open and close trading positions with peace of mind knowing that the platform is completely stable. Pay close attention to price correlations because Bitcoin has the tendency to negatively affect Litecoin prices. There are interdependencies between the markets in the short- and long-run. 

Finding the best Forex broker for trading Bitcoin 

You can expand your trading capabilities through Forex brokers that offer BTC trading as one of their crypto assets. In the past, there have not been many options in terms of trading cryptocurrencies. Now, it is a completely different story. Find a trustworthy, reliable broker that allows you to trade Bitcoin on the best trading platforms with healthy leverage. Advantages to opening an active trading account include but are not limited to automated trading, news and market analyses, and stop-loss orders. Even if you have come across the best brokerage firm in terms of functionality, pay attention to the current legislation of your country. You do not want to have any surprises. 

Finally yet importantly, take a close look at the book volumes. The volume of daily transactions will give you a pretty good idea about the amount of liquidity available. You should have a guarantee that you are able to execute your positions. Get your information from different sources because there is no way of knowing if it is actually reliable. Make sure that it does not contain errors or, worse, inaccuracies. 

Owing to the World Wide Web, you can gain access to real-time data based on which you can make informed decisions.

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