Foreign currency is the most liquid market in the world. Unlike stock markets, forex trading operates 24 hours a day every day, across global markets.
In recent years, some forex brokers have grown even more dynamic, allowing traders to make deposits using cryptocurrencies and other digital currencies. For one, many forex brokers have started accepting deposits in Bitcoin, which is the most well-known type of cryptocurrency.
In this article, Fair Forex shares a guide to depositing Bitcoin for currency trading to help forex traders decide if this payment method will work for them.
An Introduction to Bitcoin
Bitcoin is a cryptocurrency created in 2009 by an anonymous figure or group known only by the pseudonym Satoshi Nakamoto. This digital currency relies on blockchain technology, which essentially involves a shared, public ledger which keeps a detailed record of all transactions made on the network.
Bitcoin has been a source of much controversy since its conception; while many praise the privacy and security afforded to it by the blockchain, some have criticized the currency for being an instrument for committing cyber-crime. A number of off-shoot digital currencies have also emerged, claiming to better represent Satoshi Nakamoto’s vision; this has created conflict within cryptocurrency communities.
Risks & Benefits of Using Bitcoin in Forex Trading
Bitcoin transactions require digital wallets. Users transfer Bitcoin from their wallet to another person’s wallet. Since its launch in 2009, the value of Bitcoin has fluctuated wildly, making it an attractive asset in forex trading. However, given that this extreme volatility, forex trading in Bitcoin also has an increased degree of unpredictability.
Apart from high volatility, forex trading with Bitcoin also has the following risks:
- Varied exchange rates: The exchange rate of Bitcoin depends on the exchange or platform. You have to monitor the exchange rates of the broker you’re trading with.
- Risk of leverage: Leverage means borrowing money and using it to invest in a currency. It allows you to trade larger positions in a currency, possibly magnifying your profits. Many forex traders offer leverage for Bitcoin trades. However, using leverage can also magnify your losses depending on the exchange rate movements.
Despite the risks, using Bitcoin for forex trading has the following benefits:
- Low deposit amount: Some Bitcoin trading firms let you start with as little as $25. Just make sure that the broker is appropriately regulated.
- Security: Bitcoin transactions don’t require you to present your bank account or credit card details, which can be a big benefit in financial security.
- Access to Bitcoin trading assets: Some brokers who accept Bitcoin provide technical tools and charts to help you monitor the value of Bitcoin. These tools help protect you from the volatility of the cryptocurrency.
Brokers Who Accept Deposits in Bitcoin
So, we have already established that trading with Bitcoin comes with an array of risks and benefits.
However, Bitcoin can also be used to simply make deposits, before trading in a more commonly used currency such as USD. Here is a list of brokers that accept deposits in Bitcoin:
LiteForex was founded in 2005; it offers gold and silver, CFDs and Forex pairs as trading instruments. They accept deposits made in Bitcoin and allow mobile and automated trading, trailing stops, pending orders, and hedging.
FXChoice also accepts deposits made in Bitcoin. They allow scalping and the use of expert advisers, as well as one-click trading, mobile access and trailing stops.
- Fair Forex
Here at Fair Forex, we offer some of the industry’s lowest commissions and spreads. We accept deposits made in Bitcoin and a range of other payment methods. Our true ECN accounts offer lightning fast executions under 50ms and access to a deep and diverse liquidity pool, while our halal Islamic forex account options allow you to trade swap-free and with no interest charges on overnight positions.
Fair, Low-Spread Forex Brokers
Helping traders succeed in the currency market, Fair Forex has built a reputation for being a dependable low-spread forex broker.
Contact us to learn more about the foreign exchange market or to inquire about our services.