Bitcoin is definitely the most popular cryptocurrency ever existed. There is an increasing number of Forex brokers that promote bitcoin trading. This has opened the doors for new opportunities in the currency trading market. We would like to speak about the benefits of trading BTC with Forex brokers.
First of all, bitcoin is decentralized. The rates of bitcoins are fixed for every part of the world, as there are no institutions like central banks that can influence bitcoin rates somehow. Additionally, bitcoins are not affected by the change in interest rates or any other macroeconomic forces. Since this digital currency is global, there is no problem for traders in the USA to trade with the broker located in Australia for example. However, it still important to consider the regulatory environment of your Forex broker.
Although speculating on the bitcoin price fluctuations is risky, it can also be very profitable. Forex brokers usually offer high leverage for trades with bitcoins. The leverage provided by FX brokers can reach even 1:1000. Moreover, online currency trading brokers usually do not require you to make a big deposit to start off. Some might even offer you a bonus to begin trading Forex with the boost. As for the withdrawals with bitcoins, they are mostly free. You still have to consider best Forex trading brokers specifics, as some might still charge a tiny commission for funds withdrawal. Nevertheless, you do not pay any fees to third parties, because bitcoin transactions do not involve any middlemen.
Generally, the costs of trading with bitcoin remain low. Forex brokers are interested in attracting new customers. That is why they do not charge extra fees for the order execution.
Lastly, all bitcoin transactions are secure thanks to the advanced encryption technologies. When you sign up with the Forex broker, you do not give any information about the credit/debit card or bank account – only the number of your bitcoin wallet address. Thus, your financial and personal info remains unexposed to the security risks.
Risks of trading bitcoin with FX brokers
Although trading FX with bitcoins can be rewarding, it is important to consider the downsides. So what are the main issues?
We should admit that bitcoins are traded on different exchanges. Hence, exchange rates may vary significantly. For this reason, we advise you to check which bitcoin exchange rates your selected FX broker is going to apply.
Secondly, bitcoin prices are quite volatile. For beginners, such volatility combined with high leverage can turn out to be deadly. Thus, traders should understand all the risks and have to develop solid money management strategies.
In addition, there are unregulated Forex brokerages. We do not recommend trading with them, as you will risk losing the whole initial investment amount. Thus, check if the FX broker is regulated beforehand.
The final point to consider is the risk of theft. Bitcoins can be hacked even from the broker’s bitcoin wallet. Therefore, you have to make sure that your Forex broker has obtained an insurance against this type of theft.
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