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Forex trading with Bitcoin

Posted by on Sep 30, 2015 in Bitcoin Trading | Comments Off on Forex trading with Bitcoin

If you stumbled upon this article then you have to be familiar with a concept of Forex and you don’t want me explaining you that once again. So I will avoid long introduction of forex and say few words about bitcoin and trading with it on forex.

Bitcoin was for years just an option and nothing more. But recently it became more, for many it became hedge due to uncertain politics and currency fluctuations. The issue of bit coin begin considered as a real currency has been talked about a lot, but still some countries do and some don’t acknowledge bitcoin as a legal currency. Most of regulators on world markets see bitcoin as an asset.

   Some markets acknowledge bitcoin as a currency, but before diving into trading with it you should know what are the differences between forex and bitcoin trading. First bitcoin doesn’t have a demand like other currencies, and such it isn’t a subject of central banks. While other currency fluctuate due to economic and other factors, bitcoin does not, its value depends on fundamentals of the crypto-currency ecosystem. Bitcoin is similar to forex trading in a matter of trade, currencies are traded one for the other and bitcoin is exchanged for other assets.

   Another difference which is slowly being erased is that there are no over the counter contracts which can affect on a price of a bitcoin in a deal, while on forex market most of the contracts do happen in currency for currency trades.

   There is a huge difference between market sizes of these two types of trading and their markets. Forex trading is worth over 5 trillion dollars, while bitcoin market value is measured in billions. And because of this these two markets are differently impacted by events ( as you know smaller the market greater is the effect of events on it ). Due to this fact many regulators issue warning to those who want to trade with bitcoin.

   Some brokers allow bitcoin trading, but this trade has its limitations due to rules in some countries. Most brokers allow buying and selling bit coin through usual channels which don’t impact regular forex exchange. Most of the ( around 80 percent ) of bitcoin trade is done on China based markets, and they are traded for yuan, which shows the possibility of bitcoin to be traded for regular currencies.

     It is advised to all who trade with bitcoin to avoid forex exchange until bitcoin is regulated better, and until everyone agree about what place in a world trading bitcoin belongs. Trading bitcoin on bitcoin exchange for your own local currencies over bitcoin brokers is only safe way of trading with bitcoin.

     So if you want to invest in bitcoin, Coinbase is still the most popular place to do it. There you can use bitcoin to trade for goods from a list of companies that work with it. Only way of purchasing bitcoin on Coinbase is to create an account and buy bitcoin with your own money.

     So bitcoin trading on Forex is possible in a way, but it still isn’t considered as a currency by most markets, not even to mention that you cannot use bitcoins in binary trading platforms, like for example Free Money System. There are still many risks if you want to trade with bitcoin and until those risks are brought to the level of risks with other currencies bitcoin won’t be considered equal to real currencies.

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