The bitcoin price has risen drastically, exceeding $3000 per BTC in June 2017. Such serious growth is naturally interesting for major Forex brokers, and for this reason our usual Forex brokers have, one by one, added the opportunity to trade BTC/USD and BTC/EUR pairs.
The following brokers have added support for crypto trading pairs: Alpari Forex Club Amarkets Instaforex Many brokers have added the ability to make investments in BTC, but one should not mix up margin trading with investing. When trading cryptocurrencies on margin, transactions are made with non-physically delivered BTCs, the so-called cryptocurrency CFDs (see How To Trade BTC CFDs). The benefits of BTC CFDs trading are obvious: low liquidity causes high volatility, which makes it possible to earn good money. Why Traders May Be Interested In Trading Cryptocurrency CFDs via The Forex Brokers?
Nowadays, there are many exchanges where you can trade physically delivered BTC. Such exchanges are Poloniex, GDAX, Bitfinex, etc. On average the volume of daily trading ranges from 70 to 120 million dollars. The only thing is that the principle of earning money on such exchanges is built on the principle of “bought cheaper – sold more expensive.” This scheme does not work in conditions of a falling market. It’s the first drawback of cryptocurrency exchanges compared to traditional brokers offering cryptocurrency CFDs trading. At the same time, many cryptocurrency exchanges also offer margin trading.
In this case traditional Forex brokers offering BTC CFDs have one additional advantage. This advantage lies in regulation. Yes, this is naturally not the same level of control as in the United States, but let’s consider the elementary case. Traditional brokers such as Alpari or AMarkets have phones for communication, e-mail, real offices which you can visit and talk to real people. As for cryptocurrency exchanges, for example, Bitfinex or BTC-E have only e-mail for communication. In fact, one day they could pack up their bags and scam all the traders. Where can you find them then? And the third point I would like to consider is the difference between trading cryptocurrencies from traditional Forex brokers and cryptocurrency exchanges. This is the safety of funds.
Cryptocurrency exchanges are hacked quite often. The perfect example is the Mt.Gox exchange, through which in 2013 up to half of all network BTC transactions were made. The exchange was hacked and billions of dollars worth of bitcoins were stolen. And, in addition to the exchange rate collapse, the BTC owners, i.e. traders, lost all their funds. I can’t remember any such incidents happened to traditional Forex brokers. In this article, I did not mean to say that you should trade on crypto exchanges, and should not do so with traditional Forex brokers. It is profitable for someone to trade directly on the exchange with physically delivered cryptocurrency, for others it will be more profitable to trade with leverage somewhere in Alpari or Forex Club.
The main point of this article is to show that you should not be skeptical about trading cryptocurrencies with classic Forex brokers, because under certain circumstances trading through them can be a very good option. The main thing is to work with a reliable broker, not the bucket shop. And as you know, everything is very complicated.