Buying or trading Bitcoin has become one of the most popular and potentially lucrative investment methods. The value of Bitcoin in relation to other currencies (usually USD) varies greatly from almost minute to minute, which makes it very interesting from a binary options perspective. Buying real currencies or using CFDs on longer time periods should also be considered very exciting options.
There are also brokers that accept Bitcoin and other cryptocurrencies as a deposit method. Merchants can fund their accounts and get paid in Bitcoin or Ethereum etc. So Learn More
best bitcoin broker
Basics
Bitcoin is a worldwide phenomenon and interest in binary options is growing. Digital currencies are viciously volatile exchange rates, making them suitable for binary trading of any expiry date. The currency’s popularity and notoriety also makes it a prime target for potential scams and the like, so only trade with trusted brokers, such as those registered with Binary Options.
To start trading bitcoin binary options, you should at least understand what they are. Essentially, Bitcoin is a digitally created unit of currency that can be used anywhere Bitcoin is accepted. They should be a free and easy system for international trade that doesn’t depend on central banks or charge outrageous fees. Coins are based on very complex cryptographic algorithms that create value in a process called “mining”. Miners, usually tech-savvy computer operators, run programs to create coins, which impose strict limits on the number and rate at which coins are mined so that they do not lose value. Once coins are mined, they can be sold, traded or exchanged.
A few years ago there were very few brokers offering Bitcoin as a trading asset. Now it’s the other way around. Several brokers now offer trading on Bitcoin and lesser-known cryptocurrencies such as Ethereum or LiteCoin. Thus, traders have a number of choices when it comes to finding a broker that offers cryptocurrency trading. If your current broker doesn’t offer it, consider moving.
Bitcoin wallet
To buy and sell Bitcoin (rather than simply guessing the price) you need a cryptocurrency ‘wallet’. Security and transparency are important, this wallet holds virtual currency, so we absolutely rely on it. We recommend a service called Hodly, which has major financial backing to establish a high level of security and ensure robustness.
How bitcoin trading works
Sensing a new opportunity with bitcoin and binary options, some innovative brokers have devised ways to trade binary options and bitcoin together. There are essentially 2 ways to trade Bitcoin binary options. The first way is to use Bitcoin as a medium of exchange. The second way is to use Bitcoin as the underlying asset.
Bitcoin as a medium of exchange
When using Bitcoin as an exchange, traders will be trading Bitcoin and various underlying assets in the financial markets. For example, they may trade the EUR/USD currency pair and ask for a rise or fall on expiration of a binary option. So, if your transaction is successful, you will be paid in Bitcoins instead of fiat currencies like US Dollars or Euros.
You might be wondering why anyone would ever want to accept Bitcoin when paying in US Dollars as they always used to be. The first advantage of Bitcoin transactions is that they have the lowest transaction costs among all types of online payments. This is why Bitcoin was originally created to lower the cost of online transactions. There is no central authority governing Bitcoin, so no service fees are paid when receiving or sending payments.
Bitcoin transaction
Another major reason traders use bitcoins in binary options trading is to earn extra bitcoins. Bitcoin itself is traded and its value to the US dollar depends on demand. All trading transactions denominated in Bitcoin allow traders to insulate themselves from fluctuations in this crypto currency, while at the same time generating more revenue through the profits from their trades.
Nonetheless, this form of trading is limited to binary brokers who will accept Bitcoin as a medium of exchange. That said, binary options brokers in this category are limited.
Bitcoin as an underlying asset
Another way to trade Bitcoin with binary options is to consider Bitcoin as an underlying asset. As mentioned earlier, bitcoin itself is traded on special bitcoin exchanges. The exchange rate relative to the US dollar rises and falls based on demand.
For example, the loss of confidence in the euro during the Cyprus banking crisis in 2013 led investors to switch their safe haven assets from the euro to bitcoin. This sharp increase in demand for Bitcoin has helped boost its value to about the same level as the price of gold. Due to this volatility, some binary brokers have started introducing binary options contracts related to the value of Bitcoin. In other words, Bitcoin is traded like an underlying asset listed on most binary broker platforms.
Deposit and trade using cryptocurrency
Some brokers now accept Bitcoin as an account funding method. It allows traders to deposit, trade and pay in Bitcoin. The main broker providing these services is BinaryCent. They accept 15 cryptocurrencies as deposit methods, including Bitcoin, Ethereum, and DASH.
