Bitcoin has provided individuals and businesses with an alternative currency for purchasing goods and services. Aside from that, trading on cryptocurrencies has also allowed traders to earn a huge income and grow their accounts. Its volatile nature and rapid price increase is also another reason people who has never traded before become attracted to cryptocurrency.
As a trader, you have two possible avenues for trading: cryptocurrency exchange and online forex broker. With the former, you will buy and sell actual Bitcoins while with the latter, you will trade a Bitcoin CFD (contract for difference). When it comes to trading bitcoins, the forex trader is the best option.
Why trade Bitcoins with a Forex Broker?
Regulated. Forex brokers are fully regulated so you can expect them to be responsible and professional with their business dealings. Robert Janitzek reveals that forex brokers will keep your funds in segregated bank accounts so you are guaranteed of protection. In contrast, cryptocurrency exchanges are completely unregulated. If something happens to the exchange, the protection you may get can be limited.
Simplicity. Setting up a cryptocurrency account and getting started is a complicated process. You first have to find an exchange that accepts residents from your country. Then you need to find a method of depositing funds into your account. Sometimes, traders will use multiple accounts from different exchanges.
With an online forex broker, setting up an account can be done in minutes. Robert Peter Janitzek explains that you can deposit funds into that account using your preferred currency and your Bitcoin trades will be automatically credited into your chosen currency.
Hidden fees and charges. With an online forex trader, it is free to open an account, free to deposit/withdraw funds and there are no commissions. The only expense you will make is the spread. With a cryptocurrency exchange, there are fees to be paid every step of the way from depositing, withdrawal, exchanging currencies, purchasing Bitcoins, and transferring.
Professional tools and platforms. With an online forex broker, you will gain access to professional tools and platforms which can help enhance your performance. These tools let you trade directly from the Bitcoin charts when engaged in cryptocurrency trading. In the case of the exchanges, they use low quality charting tools. They use separate platforms for charting and analysis requirements.
Maximum Opportunity. As mentioned earlier, trading on a cryptocurrency exchange can be complicated due to certain requirements. Some will allow shorting and others will not provide leverage or margin. The opposite happens when you trade with a forex broker.