Bitcoin has hit the headlines in recent months as a relatively new, peer-to-peer currency which offers free (or at least very low) international transfers and payments without the use of the conventional banking network. Bitcoin is sometimes referred to as a virtual currency as it does not exist in physical format and due to the fact that it has no central administrator, such as a bank, to control the currency. However, due to the increasing popularity of Bitcoin, and the convenience that it provides many international transactions, there are also an increasing number of binary options brokers with Bitcoin which we will explore here at TradingBrokerz.com.
First and second generation binary options brokers with Bitcoin
Bitcoin has been taken on by many binary options brokers due to the fact that it acts in a very similar way to many conventional currencies. Those binary options brokers with Bitcoin can operate on two broad levels of how they choose to use this new, virtual currency. The first level are for those binary options brokers which can be considered ‘first generation’ in their approach to Bitcoin. These first generation Bitcoin binary options brokers allow their customers to purchase binary options in Bitcoin (BTC) against the US Dollar (USD). These can typically be traded with expiry times of between 60 second and weekly binary options. Binary options brokers such as Traderush and Anyoption are binary options brokers with Bitcoin and provide for this first generation trading.
Alongside these brokers, there are also those providing ‘second generation’ Bitcoin trading. These binary options brokers actually allow for traders to use Bitcoin in order to fund their trading accounts. In addition to speculating on the future price movements of Bitcoin (BTC), the virtual currency can be used to make and withdraw payments from certain trading accounts. Although this is only still in its infancy, brokers such as SatoshiOption have created a binary option trading exchange using BitCoin as the funding currency.
What is the best way to trade Bitcoin using Binary options
Since Bitcoin has only been established since 2009, TradingBrokerz.com advise that use of this currency should be done with care. It is also worth remembering that they are unregulated and not a protected currency and may be considered as a risky investment in itself if the value of a trading account is to be denominated in Bitcoin. The popularity of the BTC currency over the past year highlights the risk posed by such a potentially-volatile currency. Although this has recently translated in to high appreciation for Bitcoin as demand has risen, the potential for demand to decrease and the value of Bitcoin to fall at a similar rate is also very possible.
Those who prefer to use the first generation trading of Bitcoin as an underlying asset, will find that the market for this is almost exactly the same as any other binary options market. Those binary options brokers with Bitcoin will therefore list these within the available assets which is accessible through the websites of each broker, prior to opening an account. For traditional binary options, this will be a straightforward decision of whether a trader believes the value of Bitcoin will be higher or lower against the US Dollar over a predetermined period of time. Some binary options brokers may also offer BTC trading using features such as One Touch trading or range trading within the BTC/USD market.
Given Bitcoin’s status as an unregulated currency, it may offer excellent trading opportunities for binary options traders to capitalise on a totally decentralized, and ultimately uncontrollable, currency. Although this also incurs additional risk, here at TradingBrokerz.com, we believe that currently the best choice for traders using binary options brokers with Bitcoin is through trading this as any other asset. Despite the strong appreciation in the value of the virtual currency over the past year, this intrinsic value is not guaranteed and therefore holding an account valued in BTC is difficult to recommend at this time given these potential risks.
Choosing between binary options brokers with Bitcoin
In terms of choosing between the binary options brokers which currently offer Bitcoin, this will depend a lot on the individual strategies employed and whether a broker offers this market or expiry time. Many of the top binary option brokers with Bitcoin will be highly competitive in terms of the markets that they offer and for this reason Bitcoin binary options can be traded most effectively using these. An important factor, for many traders, will likely be the maximum and minimum trade values that they offer. All of this information can be reviewed in advanced before registering for a binary options broker with Bitcoin and is important in making an informed decision before funding a binary options trading account.