Bitcoin is fast evolving and has become a valuable cryptocurrency traded on the exchanges. With no physical asset on which to base, its price can wildly fluctuate but that makes it all the more attractive to traders.
Platforms
Traders are using several platforms and exchanges to deal in bitcoin and have now started to apply forex trading strategies to their trades. While there are forex brokers accepting Bitcoin and other cryptocurrencies, it has not been viewed by regulators as a true currency, unlike the dollar or the euro. Instead it is viewed as an asset, although one of value.
Trading Differences
There are differences between trading with bitcoin and standard Forex trading but, in both cases the price increases and falls with demand. Bitcoin, being virtual, is not subject to some of the uncertainty afforded to assets where supply can be a concern.
Bitcoin, and other cryptocurrency markets are available 24 hours a day, 7 days a week, and 52 weeks of the year. Trading can take place at any time with crypto but, if trading on Forex, then you cannot trade on the weekend as it is closed.
Bitcoin on Forex
Through Forex, trading bitcoin is just like trading anything else found on the exchange. It is traded similarly to currencies in that one can trade dollars for bitcoins on exchanges but it is largely dependent upon whether it is traded as an actual currency rather than an asset. Some brokers already include bitcoin in their platforms.
Strategies
- Swing trading – keeping the trade open for days or weeks at a time which is useful for those with little time to keep an eye on the market.
- Day Trading – popular with the volatile bitcoin market, allowing for trades when prices move quickly.
- Automated Trading – configured AI trades on your behalf.
- Scalping – trades take place over a few seconds which is similar to day trading but faster – again taking advantage of price changes in a volatile market.
Forex Platforms and Bitcoin Offerings
Forex platforms do need to strengthen their bitcoin offerings. This will encourage investors to trade. Until then, they may be more successful when working with their national currencies within Bitcoin-based exchanges. This will incur few trading costs and the platforms will have a better understanding of that particular market.
If you already have an account with a Forex broker who already deals in Bitcoin, you will have a head start. You will need a trading plan, plenty of research and a set budget before you embark on actual trading.
Alternatives
Coinbase is a popular method for investing in Bitcoin. Acting as a wallet which allows traders to spend, store and buy Bitcoin, it processes purchases from several listed merchants. The user needs an account and must transfer money to purchase Bitcoin. Naturally there are fees incurred.
Summary
Bitcoin traders must rely upon its growing popularity as an alternative investment choice. This popularity has gained the interest of Forex brokers who increasingly look to add to their options.
Trading in bitcoin, using a Forex broker, is not completely necessary and higher fees are likely to be charged at this stage, than platforms like Coinbase, mentioned above.
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