Bitcoin Forex Broker

Bitcoin and other Cryptocurrency Forex Brokers explained!

More and more Bitcoin news have been popping out daily, on all kinds of media. This has lead to a rapid increase of not only the interest in the Blockchain technology but also to the Bitcoin price! Thus, more and more Forex (FX) Brokers have started adding Bitcoin to their product portfolio. Why? Well, investors have seen low returns on top of most fiat currencies, stocks and bonds. Тhis is why many investors started trying out this newly emerged cryptocurrency market. Since the prices have been going mostly up, most traders profited, and thus lurked even more people into this super-lucrative looking investment sphere of cryptocurrency trading. And as you would expect, forex brokers don’t want to lose their customers, so they’ve begun adding different cryptocurrencies to their platforms!

Best Bitcoin Forex Brokers

RankBrokerOperating sinceSpecial features CryptosMin. depositSpreadFee: Overnight BUY
1Etoro-Logo-Bitcoin-Forex-Broker
Total: 5 Average: 4.4
Check Social Trading
Check Copy Trading
Check $10.000 demo account
Bitcoin Bitcoin Cash Dash Ethereum Ethereum Classic Ripple Litecoin$1000~0.7%~-0.471
2IG-Logo-Bitcoin-Futures
Total: 1 Average: 5
1974Check Regular platform updates
Check 24/7 support
Check Low Spreads
Bitcoin Bitcoin Cash Ethereum Ripple Litecoin$450 (for debit card or paypal)

no min. funding for bank transfers
Spread:
Overnight:
3logo-plus500-header
Total: 1 Average: 5
2008Check Leverage up to 1:300.
Check No Commission
Check Good Mobile App
Bitcoin Bitcoin Cash Ethereum Litecoin Ripple IOTA$100~0.88%-0.0481%
4Markets-com-logo
Total: 1 Average: 5
Check Login with Google/Facebook
Check Free Demo Account
Check Free Trend Analyzing Tool
Bitcoin$100Spread:
Overnight:

 

Specification of our Bitcoin Forex Broker List


The specifications which we chose to rate the different platforms:

Difference between a cryptocurrency broker and exchange

On the first look, there is no difference between a broker and exchange. On both places, you seem to be getting the same deal. It is tricky since both platforms might seem similar to someone without prior experience. At the same time, both have identical advertisements “Trade Bitcoin here!”. But in fact there is a huge difference:

  • Bitcoin Exchanges – Providing a platform over which buy and sell orders get matched.
  • Bitcoin Forex Brokers – Selling and buying the Bitcoin directly to and from you.

So essentially the difference is if you trade your Bitcoin (or other cryptocurrencies) directly WITH or OVER them.

Bitcoin Forex Broker vs. Exchanges

By deeply analyzing both Bitcoin forex brokers and exchanges, one can find following benefits speaking for Bitcoin forex brokers:

  • Еasy and beginner friendly – It is more convenient to jump on a page and just buy a specific currency. On exchanges, one is confronted with different trading pairs and order types (limits, stop-losses etc.)
  • Better regulations – Many exchanges are still not very regulated. Forex Broker have been regulated for a long time, and thus might seem as the more secure option.
  • Different trading products – On cryptocurrency exchanges you can only trade different cryptocurrencies. On Bitcoin Forex Brokers you will have the option to play different forex pairs like USD/EUR,
  • Better trading tools – Some brokers have been operating since many years, they have already developed and polished their trading tools like charts, user interface or APIs.

What you need to sacrifice to get those benefits:

  • Price Centralization – Since you are trading with only one entity, they are giving you a price that they feel fits. In comparison to the order matching of exchanges.
  • CFDs – One might be trading CFDs and not real currencies. More on this topic below.
  • Less cryptocurrency pairs – Brokers will likely offer you only the mainstream currencies like Bitcoin and Ether, but less likely smaller cap ones.

Bitcoin CFDs

Important: Some Bitcoin forex brokers don’t sell you Bitcoin but instead Bitcoin CFDs.

CFD is the abbreviation for Contract For Difference. This financial instrument for a future’s contract is settled by cash rather than by delivering the commodity. This kind of settlement is easier for both the winning and losing parties since nobody needs to send a specific item somewhere. In our case cryptocurrencies to a specific wallet.

So if you buy a Bitcoin CFD over a forex broker, you will never be able to actually get the Bitcoin out of the platform to your personal wallet. You will only be able to realize profits or losses if you close the BTC CFD position. Essentially you never own the coins, and instead, you are trading on the price of the asset.

Benefits of Bitcoin CFDs

Here are the arguments speakings for CFDs:

  1. Shorting – You can easily short, or bet on falling Bitcoin prices. This is valid, but still, many cryptocurrency exchanges offer such kind of trades.
  2. Speed and transaction costs – Nobody needs to store or transfer anything on the blockchain. This makes it more user-friendly, cheap and quick.

Warning about Bitcoin CFD: Holding a CFD is often bound with additional costs. Some cryptocurrency forex brokers charge up to 0.055% per night (20% per annum). This is the reason why we will mark websites that offer only CFDs.

Things you need to know before you start trading Bitcoin on FX

What is a Pip?

Pip stands for percentage in point or price interest point. It is a unit of change in an exchange rate or currency pair. A pip is the smallest move a trading pair can do.
Example: Let us take the pair BTC/USD. Let us assume the price is 12000.00. If the price changes to 12000.01, then there would be a gain of one pip. Another example in terms of the EUR/USD pair. Let us say the price is 1.2905 USD for 1 EUR. If the price changes to 1.2900, then one can say that the price has fallen by 5 pips.

What is the Spread?

The spread is the price difference between two financial quantities. In most cases it is about the bid and ask, or buy and sell spread. It is a fact that lower liquidity results to higher spreads.

What is Leverage

The leverage increases the effect of a trade without needing to increase your margin (the amount you have at stake).
Example: A 1:50 leverage means that you can trade with $2 something for effectively $100 of value. This means that smaller changes in the price have bigger effects.

Slippage

Slippage in trading is when there are major gaps in the price movement, so one order might not get executed at a price that one would have set. This event is typically a result of low liquidity and big news.
Example: Current price is 100 USD. You have set in order to close this position at 99.99 USD. Price drops from 100 USD to 99 USD. This will still trigger your order, and it will be executed at the next best price which is 99 USD. This is called negative slippage.

What are overnight fees?

Overnight fees are also called rollover in the financial fields. This is an interest paid or earned for holding a currency overnight. Minus usually refers to a fee; positive numbers for an account bonus.

Summary: Bitcoin Forex Broker

Bitcoin FX can be seen as beginner friendly. It is easy for people to buy or sell their first crypto in terms of not needing a wallet to store them. Brokers are trading the currency in your name, so you never need to hold it. So if you are someone who is wanting to buy Bitcoin and hold it for a long period in comparison to just “trading” it, then you would be probably better served by using a cryptocurrency exchange.

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