The forex market can be defined as one of the most liquid markets across the globe. It functions round the clock and throughout the week. Of late, some forex traders have begun to accept Bitcoin for currency trading. Meanwhile, Bitcoin has emerged as a highly valuable and popular cryptocurrency due to its usage over different platforms, including bitcoin crash game. It has evolved as one of the most actively traded currencies on exchanges. Bitcoin came into existence in the year 2009. The last few years remained quite volatile for the digital currency as its price underwent huge fluctuations. Despite that, it has managed to attract many traders. Many trading platforms and online exchanges allow you to trade Bitcoin and cryptocurrencies. The vital question that arises here is, should you start using your Bitcoin in the forex markets? Let us find out the risks and benefits of trading forex using Bitcoin:
Advantages of trading forex with Bitcoin:
Decentralized nature: The biggest benefit of trading forex with Bitcoin is that you will not notice changes in Bitcoin valuations in the absence of the central bank. The Bitcoin rates remain free from geopolitical effects as a result of its decentralized nature. Country specific inflation or varying interest rates do not also cause any impact on Bitcoin rates.
No transaction charges: There is no involvement of bank or clearing agencies when it comes to recording the Bitcoin transactions. Bitcoin transactions are recorded digitally on public networks. Therefore, you do not have to shell out any transaction costs in Bitcoin. There is no deposit or withdrawal fee for Bitcoin transactions, and that helps in boosting trade revenues in the longer run.
Less deposit amount: You will be allowed to begin with as low as $25 with a few Bitcoin forex trading companies. And, some firms also provide new members with a similar deposit amount as a part of their promotional strategies. However, traders need to ensure that all the brokers are effectively regulated.
High security: When it comes to Bitcoin transactions, you do not have to divulge your bank account or vital credit card details for depositing or withdrawing funds. It has emerged as a major boon while dealing with foreign brokers.
Low brokerage cost: Many forex brokers that accept cryptocurrency keep low brokerage costs to attract new Bitcoin trading clients.
Hazards of trading forex with Bitcoin:
Risky: The biggest risk when it comes to trading forex with Bitcoin is the volatility factor. The prices of Bitcoin underwent huge fluctuations. Due to the dearth of effective regulations, some unregulated brokers may use this factor for their advantage.
Theft: The deposited Bitcoin has emerged to be quite prone to theft by way of hacking. The theft may take place even from the broker’s digital wallet.
High leverage: The high leverage has proved to be a risky affair for a new trader.
Therefore, we can conclude here that Bitcoin is attaining popularity at a fast rate, but there are some risks associated with it for which you need to remain vigilant.