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Forex Bitcoin Trading (Crypto Trading in Forex)

Forex Bitcoin - Trade Bitcoin via MT4 in Forex
As a popular trend in modern-day investment, Forex Market has become one of the go-to places for financial businesses. However, there seems to be a new surge in the Forex world called cryptocurrency trading which is attracting lots of traders to itself.

Professional traders who have been trading Forex for quite a while, certainly have heard the terms Cryptocurrency and Bitcoin.

Moreover, due to its unique and somewhat uncertain characteristics, not so many traders are willing to bet their capital on this so-called “imaginary” currency. Nevertheless, Cryptocurrencies are real and constantly moving, just like regular currencies. In fact, they are circulating in much broader and larger scopes and regions.

So, before making up your mind about trading cryptocurrency, it’s better to gain more knowledge about what it is and how it works.

What is Cryptocurrency?

Unlike paper money, Cryptocurrency is a digital currency that only exists in the virtual network. It is secured by a special protection technique called cryptography—hence the name CRYPTOcurrency—which makes it much more difficult to duplicate or manipulate.

Furthermore, Cryptocurrencies are not controlled by any country or region. In other words, no government or central authority supports these currencies. This virtual money is moving in a decentralized network using Blockchain Technology, allowing all digital registers and ledgers to be shared and distributed to all the computers within the system. That is why almost everyone who participates in the business can take a peek and trace all financial transactions happening in the network.

Wait, does that mean everyone can see who buys or sells what?

Not at all. One of the best advantages of cryptocurrencies is its pseudo-anonymity feature. It means that even though you can see all the history of transactions, you cannot see who’s behind the trades. All financial operations that have been conducted within the computer network are tied to their specific keys or virtual “addresses” that are highly protected. Therefore, it’s highly unlikely to trace the owners of Bitcoins.

All these sophisticated technologies allow cryptocurrencies to exist independently, without being controlled by any political forces or central authorities. These currencies are almost immune to any government interference or manipulation. That is why they’ve had a fast growth rate during the past decade.

Several popular cryptocurrencies include Bitcoin, LiteCoin, Ethereum, Bitcoin Cash, and Ripple.

Bitcoin: The Most Popular Cryptocurrency

There are over 2000 types of cryptocurrencies right now. Still, Bitcoin is considered the most popular, “stable,” and valuable than the rest. Over 17 million Bitcoins are circulating all over the world right now (worth over 154 billion USD) and this number will continue to grow, up to 21 million coins.

Bitcoin was first introduced in 2009 by Satoshi Nakamoto whose real identity is still unknown. In May of 2010, Bitcoin was for the first time used for a real financial transaction in Jacksonville, Florida, to buy two pizzas for 10,000 BTC. Today, these two pizzas are worth over 90,000 USD. Bitcoin proves that cryptocurrencies can be as valuable as fiat money or other financial assets; a fact which has led to the emergence of other cryptocurrencies in the market.

Although Bitcoin is still not officially accepted as a legitimate currency, several marketplaces accept it as one of their international payment options. Shopify, for example, has integrated its marketplace with BitPay—one of many Bitcoin wallets and payment services. This marketplace integration allows all Shopify customers to make payments using Bitcoin as long as they have an active BitPay account with sufficient balance.

On account of its high values, Bitcoin is also considered as a financial asset worthy of trade and exchange. Along with other cryptocurrencies such as LiteCoin, Ethereum, Bitcoin Cash, and Ripple, Bitcoin has turned into an appealing option for investment and trading.

Trading Cryptocurrencies and How It Works

There are many ways to invest in the Cryptocurrencies, so let’s see how Cryptocurrency trading works.

Of course, you can always invest in Cryptocurrencies in the old fashion way. Meaning, you only need to open a private wallet in a marketplace or exchange and buy a certain number of Bitcoins or other cryptocurrencies. After that, you take profits by reselling the Bitcoins you have purchased when the price increases.

It may seem simple to you right now, but the downside of this traditional method is that you will need tons of money to start. Just like other financial assets, Cryptocurrencies are commonly traded against USD. For example, right now 1 BTC is worth over 9,000 USD, so that’s how much money you need to purchase a single coin.

If the above method does not sound like a viable option, you can always choose to join the business by participating in the Forex Cryptocurrency Trading.

You can participate in Cryptocurrency trading by speculating on the Cryptocurrencies’ price movement without even owning the coins. You can choose to go long (buy) when you think the price is going up, or go short (sell) when you predict that the price is going down. This method is known as Forex CFD trading in the FX market.

Moreover, you won’t need to spend too much money using this method because you can start trading with only 0.01 lot. One standard lot in cryptocurrency trading equals a whole coin, so 0.01 lot means you only need around 90 USD to start trading– sometimes even less, depending on the broker’s policy.

You can also take advantage of various leverage services offered by Forex brokers. They allow you to trade in a higher amount than your available capital. Of course, that brings about additional risks.

Forex Cryptocurrency trading is available in various pairing options, they are as follows:
BTCUSD (Bitcoin / US Dollar)
ETHUSD (Ethereum / US Dollar)
LTCUSD (Litecoin / US Dollar)
XRPUSD (Ripple / US Dollar)
DASHUSD (Dash vs US Dollar)
EOSUSD (EOS / US Dollar)
and many more!
Besides, it is equally important to note that the Cryptocurrency market moves with a whole different level of volatility compared to that of the fiat currency market. Because of their decentralized nature, cryptocurrencies move independently without having any regard for worldwide political or economic concerns. The price movements of cryptocurrencies are mostly affected by the following factors:

1. Supply and Demand

Cryptocurrencies are circulated within a specific limit. For example, the Bitcoin supply is based on the miners. Bitcoin is currently “mined” by processing blocks of transactions, which then generate parts of new coins as a reward for the miner.

The growth rate of the new coins has decreased a lot from 6.9% in 2016 to 4% in 2018, and therefore, resulting in higher demands for Bitcoin and driving up the prices.

On top of that, cryptocurrencies are expected to cap at a certain number. Bitcoin is predicted to cap at 21 million. So, when this number is achieved, there will be no more coins to mine. This limited supply, along with further demands and other aspects, will determine the market value of cryptocurrencies.

2. Media Exposure

As a new and developing virtual money, all eyes are on the growth of these cryptocurrencies. Therefore, how these cryptocurrencies are presented to the users by the media will significantly affect the value of each cryptocurrency.

The more news coverage Cryptocurrencies receive, the higher their value will be. Therefore, even a single tweet of rumor or misinformation can disturb the whole pricing system of Cryptocurrencies.

3. Market Integration

The price movement of cryptocurrencies is also affected by the fact of whether it could be used as a payment method. Nowadays, there are various places such as Shopify, Microsoft, Bitrefill, and Purse.io for Amazon, and Twitter that accept Cryptocurrencies, especially Bitcoin, as a payment method. This marketplace integration invites more users to buy and invest in Bitcoin, and therefore increase its market values.

4. Regulation and Legal Issues

Since Cryptocurrency is completely new in the financial business, it involves less regulation and more of a free hand for people to go about their financial transactions. However, this also causes new problems such as money laundering and criminal activities, which will create uncertainty for the public to officially use cryptocurrencies in their daily lives.

Moreover, cryptocurrencies can also be classified as different categories. While the SEC (Security Exchange Commission) classifies cryptocurrencies as securities, the CFTC (Commodity Futures Trading Commission) believes that cryptocurrencies are commodities. These classification systems will also determine the value of cryptocurrencies in the market.

Because of the above factors, you will need to prepare yourself if you want to join the business. Your days will be filled with adrenaline rush because the price of cryptocurrencies fluctuates easily. It can rise to the skies today and plummet tomorrow.

Best Bitcoin Trading Forex Brokers

If you are ready to invest in cryptocurrency trading, you can start by checking out the services of these reputable brokers:
RoboForex Malaysia
RoboForex Malaysia
Tradable Cryptocurrencies: Bitcoin, Dash, EOS, Ethereum, Litecoin, and Ripple.
Minimum Deposit: $10
Leverage: 1:50
Spreads: Floating from 0 points
Commission: Yes
Platform: MT4 & MT5

Deposit and Withdrawal: Bank Wire, Credit Cards, Webmoney, FasaPay, Skrill, Neteller, Local Malaysian Banks

Regulations: CySEC, IFSC
Country: Cyprus

HotForex Malaysia
HotForex Malaysia
Tradable Cryptocurrencies: Bitcoin, Bitcoin Cash, Binance Coin, Ethereum, LiteCoin, Stellar Lumens, Monero, Ripple, EOS
Minimum Deposit: $5
Leverage: Up to 1:10
Spreads: From 0.0006 (Stellar Lummens) to 30 (BTCEUR) pips
Commission: 1 USD / lot round
Platform: MT4, MT5, Webtrader, Mobile Trading

Deposit and Withdrawal: Bank Wire, Credit Cards, Webmoney, FasaPay, Skrill, Neteller, Local Malaysian Banks

Regulations: CySEC, FCA, FSC, FSB
Country: Cyprus

LiteForex Malaysia
LiteForex Malaysia
Tradable Cryptocurrencies: Bitcoin, Bitcoin Cash, Dashcoin, Ethereum, Ethereum Classic, LiteCoin, Monero, Ripple and ZCash
Minimum Deposit: $50
Leverage: 1:500
Spreads: variable according to current market conditions
Commission: No
Platform: MT4

Deposit and Withdrawal: Bank Wire, Credit Cards, Webmoney, PerfectMoney, Skrill, Neteller, Local Malaysian Banks

Regulations: IBC
Country: Marshall Island

FXTM Malaysia
FXTM Malaysia
Tradable Cryptocurrencies: Bitcoin, LiteCoin, Ethereum, Ripple
Minimum Deposit: $100
Leverage: 1:2000
Spreads: 200 pip
Commission: No
Platform: MT4

Deposit and Withdrawal: Bank Wire, Credit Cards, Webmoney, PerfectMoney, FasaPay, Skrill, Neteller, Local Malaysian Banks

Regulations: CySEC, FCA, IFSC
Country: Cyprus

Forex Trading vs Bitcoin Trading

With the rising debates of cryptocurrencies, you might be wondering whether you should trade Forex or simply join the cryptocurrency trading community.

The answer is both can be valuable depending on your trading conditions.

Why? Because Forex and cryptocurrency trading have their own characteristics that can be very beneficial for your trading business. Let’s examine which one is better for your trading conditions.

1. Regulation

The Forex market has been operating for years and years. Therefore, it has matured in terms of experience and regulations. It provides more stability and has an extensive historical background for better predictions of the price movements, as well as various rules to protect both traders and brokers against many financial crimes.

On the other hand, cryptocurrencies are still developing. This type of trading provides a wider range of options and liberty for traders to experiment without being controlled or supervised by the nations or governments.

Conventional Forex trading is a much better option if you are still new to the trading world. But, the excitement of unpredictable price movement in cryptocurrency trading will be extremely beneficial for expert traders to improve their trading skills and predictions.

2. Bound by Nation vs Decentralized Currency

Forex trading involves fiat currencies that belong to specific nations. Therefore, any political movement or economic events will significantly affect the market values of the nation’s currency.

Such cases will not happen to cryptocurrencies. That is because their price movements are purely based on the value of the coins. That is why they are NOT affected by any geopolitical or macroeconomic events.

Therefore, if you are interested in keeping yourself up-to-date with world events, classic Forex trading might be more enjoyable for you. But, if world events bore you and you are looking for more excitement in the financial business, maybe it is time for you to take a sneak peek at cryptocurrency trading.

3. Cost and Capital

With the emerging trends of Forex trading, everyone can join the market with a capital as low as even 5 USD. However, depending on the brokers, you may have to consider several underlying costs which can be quite substantial.

Cryptocurrency trading, on the other hand, might need a higher amount of capital to get you started. Still, the costs offered by the brokers are usually lower to attract more clients.

For the aforementioned reasons, Forex trading is far more suitable if you are a novice trader whose capital is still limited. In comparison, cryptocurrency trading is much better for professional and experienced traders with a higher amount of capital.

4. Volatility

Both Forex and cryptocurrency trading present a high level of volatility. Still, even when the Forex market is considered volatile, traders believe that it is nothing compared to the extreme price fluctuation of cryptocurrencies.

Moreover, the Forex market offers massive liquidity, with over 5 trillion USD of daily turnover from all around the world. Therefore, even when the price fluctuates so much, the currencies are extremely liquid and easy to move.

However, that is not the case for cryptocurrencies for which market liquidity is extremely limited, and the price fluctuates even more extreme than the ocean tides. So, cryptocurrency trading is far more suitable for traders who want greater challenges and are ready to take risks.

5. Trading Objectives

Most experienced traders participate in the cryptocurrency market as a long-term investment, to diversify their portfolio, or simply just for fun. The extreme volatility of cryptocurrency trading makes it impossible for traders to depend on it for day trading.

That is why your trading objectives will determine which trading options you should choose. If you want to become a day trader, Forex trading is a much more viable choice. On the other hand, due to its promising prospects, cryptocurrency trading is a far better option for long-term investments.

Benefits of Cryptocurrency Trading

Despite its complexity and unique nature, professional traders are willing to invest in cryptocurrencies because of its wide range of advantages:

1. Decentralized Valuation

Cryptocurrencies are independent currencies that are moving virtually in the market. They don’t belong to any country or nation. Thus, no geopolitical or macroeconomic issues will affect the value of the cryptocurrencies. Cryptocurrencies are also free from inflation or interest rates.

2. Extreme Volatility

High volatility may seem a little bit frightening for new traders. However, experienced traders see high volatility as potential profits. The more extreme volatility they encounter, the more profits they can potentially gain from a price movement. Of course, high volatility means a higher level of risk, which is why professional traders mostly come well-prepared with their risk management.

3. Better Transparency

Thanks to its Blockchain technology, records of financial transactions via cryptocurrencies are copied within the computer networks. Therefore, the transaction records are visible to almost anyone who takes part in the business. This ensures better transparency and perspective for traders to predict the price movements regarding cryptocurrencies.

4. Higher Security

Due to its pseudo-anonymous nature, you do not have to reveal your bank account or credit card information if you want to join trade cryptocurrencies. This is a huge advantage, especially when dealing with foreign brokers. It also allows you to better protect yourself from various cyber-crimes, including identity theft.

5. Low Cost and High Leverage Trading

Cryptocurrency trading is a new and promising business. That is why Forex brokers are encouraging their clients to join the party by giving them various promotions and trading services, usually with lower costs and higher leverage.

Still, you have to tread lightly because we all know that higher leverage in high volatility trading is extremely risky. Some traders even believe that it is a complete suicide. However, if protect yourself with proper risk management you can turn it to your advantage.

6. Trading Portfolio Diversification

It is a common belief in the trading community that you do not place all your eggs in one basket. If you want to diversify your trading portfolio, then cryptocurrency trading is one of the best ways to do so. It may be more unpredictable compared to other financial assets. However, just in case your other trades are going downwards, you still have your cryptocurrency asset as a backup.

7. High Investment Prospects

Cryptocurrency is still in the development stage. Over the last decade, Bitcoin has risen from just an idea to over 9,000 USD in value for each coin. Nowadays, Bitcoin is also accepted as a payment method. Furthermore, with the development of technology, cryptocurrencies show promising prospects for your future investments.