Benefits & Risks of Trading Forex With Bitcoin

Forex Trading

Forex is interesting, as it is extremely available, and it doesn’t include anything but buying and selling foreign currencies. Anyone can do it with ease, but the trick is to do it efficiently, which is where people tend to start struggling.

However, over the last few years, people started mixing it with cryptocurrencies, which actually added a whole new dimension to crypto and Forex trading alike. As the interest in digital currencies surged, many Forex brokers started accepting BTC and offering it as an option for currency trading. But what I was interested in seeing is what are the exact advantages and risks of doing so.

Advantages and Risks

There are plenty of advantages to using cryptocurrencies for trading, such as low fees, great security, and border lessness payments. Cryptos can be sent at any time to any part of the world, and if you use BTC and pay a high enough fee, your payment could be processed in 10 minutes or so.

Furthermore, there is a fairly low minimum deposit of only $25 or so, while BTC traders get access to high leverage. And, let’s not forget that Bitcoin itself is decentralized, so you are not tied to any central bank, geopolitical influences, and similar issues.

With that said, there are certain disadvantages that one should be aware of before jumping into Forex trading with BTC. For example, there are very different exchange rates between BTC exchanges, and they tend to vary a lot. This also leads us to the matter of volatility, which can be huge for BTC. It can go up and down anywhere between a few hundred dollars to $10,000 overnight, which doesn’t exactly make it that reliable.

There is a great risk that comes with leverage, and there are certain security risks that come with BTC, even though security is typically its strength. Lastly, there is an issue of mixing asset classes, which can be unpredictable, as well.

Would you trade Forex with Bitcoin?

Leave a Reply

Your email address will not be published.

Related Articles
Read More

5 Biggest Crypto Trading Mistakes – How to Avoid Them

Mistake 1 - Believing Exchange Order Books Coinbase, the largest trading venue, undoubtedly has the best reputation among the exchanges. The exchange has been registered as a Money Services Business with FinCEN since 2016 and was issued an e-money license by the United Kingdom's Financial...
Read More

Bitcoin Trading Strategies

True Range Breakout Method (TRABOM)Larry R Williams is one of the greatest commodity traders of all time. In 1987, he won the World Cup Trading Championship by parlaying $10,000 into $1.1 million over the course of 12 months. In addition to being a great commodity...
Read More

Should You Try Margin Trading? – An Honest Guide

With cryptocurrencies becoming increasingly popular across the globe in recent years, an increasing number of investors, both retail and institutional, seem to be entering this space at a furious pace. This is probably best made evident by the fact that over the course of Q1...