trade cfd on bitcoin

Cryptocurrencies have recently taken over the trading industry. Even on IQ Option many traders have tried out their hand on bitcoin trading and became successful. If you are new to this, then this article will educate you on all you need to know about bitcoins and bitcoin trading.

Key Takeaways🔑

Bitcoin is a decentralized digital currency that operates on a peer-to-peer network.
Bitcoin trading can be highly volatile, offering both risks and opportunities for traders.
IQ Option offers tools and resources for bitcoin trading, including CFDs and a community of like-minded traders.

What are bitcoins?

Just so you know Bitcoin (capital B) refers to the technology whereas, bitcoin refers to the electronic currency. In simple terms, bitcoin is an electronic currency that is completely paperless. It can only be safely secured on a computer with the use of a special encrypted peer-to-peer system. It's a new type of asset that is known for being very unpredictable and volatile. Volatile means that it's price changes a lot over short periods of time.

How Do bitcoins work?

Just so you know, if you figure out how bitcoin works then you will be able to understand how all other electronic currencies work. The first thing you should know is that it is decentralised. This means that bitcoin doesn't work with banks as is the case with traditional currencies.

blockchain bitcoin cryptocurrency

As mentioned earlier, bitcoin is mainly supported by a global peer-to-peer network. This network operates the bitcoin software. This software then deals with all transactions that involve bitcoins. These transactions are then interpreted by a blockchain software that's installed by users in their computers.

Why Trade On Bitcoins?

As a trader you should be interested in investing your money where you stand to make a profit. Despite it being a relatively new currency, bitcoin is very promising. Though some might argue that its market is very unpredictable and risky, you can't deny the fact that you can still make something here.

Highly Volatile.

Unlike other assets and traditional currencies out there, bitcoin's value doesn't depend on a country's economy. Also unlike all the rest, bitcoin's market is very unpredictable. But volatility is just a characteristic of bitcoin and for those with a proper trading strategy can use it to their advantage. However, if you don't understand this characteristic then it will be very risky. The positive side to this is that you can trade for a short period of time and still make large profits.

Transactional currency.

These days, we can use bitcoins in our day-to-day transactions just as we would traditional currencies. You can use bitcoins for just about all commercial and financial purposes. It can be used as a payment method and form of money transfer to other users. Nevertheless, always have your eye on commissions and fees charged for these services.

What About bitcoin prices?

It is important for you to know that bitcoin has no fixed/ official price. This is because its value depends on its users' demand. When more people buy it, its demand rises and so does its price. If less people buy it, then its demand falls and so does its price. In case you are wondering its supply doesn't affect its price. This is because its quantity is already predetermined and only increases if the masses decide.

bitcoin different cfds

Buying bitcoins.

Thanks to technology, it is very easy to buy bitcoins. All you need us to sign up for an e-wallet and cryptocurrency exchange platform. There is good news, all IQ Option users automatically have an account at Hodly. Hodly is an e-wallet and exchange platform owned and managed by IQ Option ltd. Just like IQ Option, it is efficient and offers its users smooth experience.

Once you have signed up, you will have to deposit the amount of money you intend to invest using your debit or credit card. From here, buying bitcoins is just as easy as buying any other traditional currency. Hodly also provides you with a safe store where you can keep your electronic money.

Once you have bought your bitcoins, store them and wait for its price to rise. Once its price has risen to a satisfactory price, you can then resell your bitcoins in exchange for a traditional currency of your choice. This too can be done using Hodly.

CFDs On bitcoin.

On IQ Option you can actually invest on bitcoins without buying or owning them. This is made possible by the use of a tool known as Contract for difference (CFD). In this case, you just sign a contact with IQ Option where you predict the future price of bitcoin and if you are right then you make a profit. If you are wrong then you incur a loss. The profit or loss is usually the difference between the opening and closing prices.

Still on CFD trading, IQ Option offers its users the services of yet another tool known as Multiplier. This tool allows you to invest more money than you have at hand. For example, by choosing a leverage of times five, you can invest $100 with just $20. You have to be careful though because even though you could make a lot of profit, the reverse is equally possible.

bitcoin with multipliers

Pros and Cons of Bitcoin Trading 😃😞

😃Potential for high profits due to market volatility.
😞High risk due to the unpredictable nature of the market.
😃Increasing acceptance as a transactional currency.
😞Regulatory uncertainty and potential for government intervention.



Bitcoin Trading Benefits Challenges in Bitcoin Trading
Potential for high returns due to market volatility High risk due to the unpredictable nature of the market
No need for a centralized authority, like a bank Lack of regulation and potential for government intervention

Why Choose IQ Option When Investing On bitcoin?

Best of tools.

Up to now you should have learnt that the bitcoin market is very unpredictable. At IQ Option, you get access to the best tools you need to deal with this. These tools include multi-graphical layouts, professional market analysis, and detailed history quotes. But most importantly, you also get market updates and warnings of volatility.

Golden bitcoin and chart

24/7 Customer support.

IQ Option knows the amount of value traders can add to each other. That is why they ensure that you joined a community of like-minded traders. Here you will get to share and learn more on bitcoin trading and investment. And the best part is you can keep up with the conversations without having to leave your tradingroom.

Until here you should have known the basics of bitcoin trading on IQ Option. Let us know of any experience you have had trading on bitcoin or any related questions. For more information check out the Complete guide on bitcoin trading.

Q&A: Common Questions About Bitcoin Trading 🤔

  • Q:Is bitcoin trading suitable for beginners?
  • A:Yes, but it is essential to research, learn, and practice trading strategies before investing significant amounts.
  • Q:How can I minimize risks while trading bitcoin?
  • A:Establish a solid trading strategy, set stop-loss orders, and only invest what you can afford to lose.
  • Q:What factors influence the price of bitcoin?
  • A:Supply and demand, market sentiment, technological advancements, and regulatory changes can all impact bitcoin's price.
  • Q:Can I trade bitcoin without owning it?
  • A:Yes, you can trade bitcoin without owning it by using Contracts for Difference (CFDs) or trading futures contracts on various platforms.
  • Q:What are some reputable platforms for trading bitcoin?
  • A:Some reputable platforms include eToro, Coinbase, Binance, and Bitstamp. Always research and compare different platforms before choosing one to trade on.

GENERAL RISK WARNING

The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Kindly note that this article does not provide any investment advice. The information presented regarding past events or potential future developments is solely an opinion and cannot be guaranteed as factual, including the provided examples. We caution readers accordingly.

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Bart Bregman

Author / IQ Option expert: "My name is Bart Bregman, I have 9 years of full-time professional trading experience. I've been trading with IQ Option for more than 7 years, mainly on the shorter time frames doing technical analyses, and have many experience with Binary Options, CFDs, Options, and Crypto trading. There is no such thing as a bad trade! As a digital nomad trader, I'm mostly traveling all over the world. Follow my journey on Instagram at https://www.instagram.com/bart_bregman/. "

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