Cryptocurrency Exchange VS Forex Broker – Which Is Better For Trading Bitcoin?
Adulting

Cryptocurrency Exchange VS Forex Broker – Which Is Better For Trading Bitcoin?

Cryptocurrency Exchange VS Forex Broker

3070
Cryptocurrency Exchange VS Forex Broker – Which Is Better For Trading Bitcoin?
https://az616578.vo.msecnd.net/files/2017/10/21/636441613952988837227473466_bitcoin%20(1).jpg

Bitcoin has seen phenomenal growth in popularity and value over the last decade. Despite this, Bitcoin is still considered to be in its early stages according to the vision set out by its creator’s.

As well as being an alternative currency for the purchase of goods and services, Bitcoin has also become an instrument for traders looking to make large returns and grow their accounts. Its rapid price increases and volatility have only bolstered that and is even drawing in individuals who have never traded before. Bitcoin has the potential to become a new major world currency and people are investing their money on the hope that it will.

Of course, whether Bitcoin becomes the ‘future of money’ or not isn’t the be all and end all for well-informed traders. Bitcoin certainly has some impressive technology behind it; however, the top priority for traders is simply to profit from its price movements. Traders can look to profit from Bitcoin if it succeeds or if it fails, either way, strong trends are bound to occur.

Where can you trade Bitcoin?

There are basically 2 main options you have for this as a Bitcoin trader, they are:

1 - Cryptocurrency exchange

2 - Online Forex broker

At a cryptocurrency exchange, you will buy and sell actual Bitcoins whereas through a forex broker you will trade a Bitcoin CFD (contract for difference).

I believe that online forex brokers are the best option for trading Bitcoin and will cover this today. I will outline the differences between the two and my reasons for this judgment.

Advantages of trading Bitcoin with a forex broker

Regulation – Reputable forex brokers are fully regulated so you know they have to operate responsibly and with professionalism. They will keep your funds in segregated bank accounts so they are always protected. Cryptocurrency exchanges, on the other hand, are completely unregulated. If a cryptocurrency exchange goes bust or closes down the protection you have may be very limited

Simplicity – This is a big one for me. Setting up a cryptocurrency account and getting started trading is certainly a complicated process, there’s no doubt about that. First, you will need to find an exchange that accepts residents from the country you are from. You then need to find a way to deposit funds into that account, which can be surprisingly difficult. I’ve even heard in some cases that traders will open a new bank account just so they can make deposits into their cryptocurrency exchange account.

What you will find with most traders that use cryptocurrency exchanges is that they have multiple accounts with different exchanges. They then use each account for different reasons. One could be for deposits, one for buying Bitcoin, one for margin trading, and one for short trades and so on.

It’s a totally different story trading Bitcoin with an online forex broker. You can set up an account in minutes if you do not have one already. You can then deposit funds into your account using your preferred currency and any Bitcoin trades you make will be automatically settled back into your chosen currency.

Hidden fees and charges – This leads on nicely from the topic before. With an online forex broker, it’s free to open an account, free to deposit/withdraw your funds and there are no commissions Bitcoin trades. Your only expense when trading Bitcoin through a forex broker is the spread. This makes it much easier for a trader to manage their money and keep track of their expenses.

When using a cryptocurrency exchange there seem to be fees involved every step of the way. You will often pay fees depositing into your account, fees withdrawing, fees exchanging currencies, fees purchasing Bitcoin, fees transferring Bitcoin and commissions on trades. All these different fees can be costly and make keeping track of your expenses a complicated and time-consuming process.

Professional tools and platforms – Trading Bitcoin through an online forex broker will give you access to professional tools and platforms like the award-winning MetaTrader platforms. MetaTrader 4 and 5 allow traders to apply all different kinds of indicators and analysis tools helping to enhance your performance. They also allow you to trade directly from the Bitcoin charts.

The charting tools available on many cryptocurrency exchanges are lower quality with traders often using the exchanges only to place their trades. They will then use separate platforms for their charting and analysis requirements.

Maximum opportunities – Again trading through a cryptocurrency exchange can be complicated if you have certain requirements. Not all cryptocurrency exchanges will allow shorting and some will not provide leverage or margin.

When trading Bitcoin with a forex broker you have access to leverage and margin allowing you to trade at the size you want. You can also trade both long and short on Bitcoin trades enabling you to capture trends in either direction. If you are already a forex trader, staying with a forex broker allows you to keep all your funds in one place and monitor both your forex and Bitcoin trades at the same time.

Cryptocurrency Exchange VS Forex Broker Overview

What the future holds for Bitcoin nobody knows. What we do know is that it’s more than likely going to be eventful. Whether Bitcoin sees further success or eventual failure, opportunities will arise for traders no matter where they decide to trade it. If you are looking to use Bitcoin for purchasing goods and services then this is a different situation to what we’ve covered today. When it comes specifically to Bitcoin trading, I do feel that overall forex brokers currently provide the best, easiest and safest option.

Report this Content
This article has not been reviewed by Odyssey HQ and solely reflects the ideas and opinions of the creator.
Swoon

119 People Reveal How The Pandemic Has Affected Their Love Lives, And Honestly... Relatable

"I haven't been able to get out of the 'talking phase' with anyone."

The reality is, there's no part of life the pandemic hasn't affected. Whether it's your work life, your home life, your social life, or your love life, coronavirus (COVID-19) is wreaking havoc on just about everything — not to mention people's health.

When it comes to romance, in particular, people are all handling things differently and there's no "right way" of making it through, regardless of your relationship status (single, taken, married, divorced, you name it). So, some of Swoon's creators sought out to hear from various individuals on how exactly their love lives have been affected since quarantine began.

Keep Reading... Show less

- Though as a little girl, I had the silkiest, softest hair that would get compliments everywhere I went, since I turned about thirteen I've since had coarse, dry hair no amount of deep conditioning masks or sulfate-free shampoo could fix.

- I started using the Raincry's Condition Boar Bristle Brush several months ago, and while I noticed that my hair had been softer, silkier, and shinier than it had ever been, I didn't make the connection because I never thought a simple hairbrush could make any difference in my hair texture.

- I will be the first to admit that I thought it was ridiculous to spend nearly a hundred dollars on a hairbrush, but this one eliminates the need for me to use any heat tools or styling products on it.

- I put some oil or a serum in my hair when it's wet, brush my hair with the boar bristle brush once it's dry, and end up with the lowest maintenance, shiniest hair I've had since I was 8 years old.

@raincrybeauty

Keep Reading... Show less
YouTube

Bingeing a romantic comedy is always a good idea, and during this pandemic, these movies bring us one of the only elements of romance we can get. Through all the break-ups, obstacles, and struggles in our love lives, romantic comedies have always been there to make us laugh and keep us company while we cry.

While we love these movies for the beyond gorgeous male love interests, the female protagonists are still the ones we always remember. Although rom-coms are far from reality, it is always fun to imagine what our life would be like if a cinematic studio was behind our love life. So what does your favorite romantic comedies say about your dream guy?

Keep Reading... Show less

Whether you're in an unhealthy relationship currently, you know someone who is, or you just want to have these numbers saved just in case it could one day save someone's life (if not your own), this article is for you. Here are three numbers to save in your contacts ASAP so you can always be safe, both physically and mentally, in every relationship.

Keep Reading... Show less

As any poor college student, a little kick of caffeine for less than a dollar has always sounded great to me. So, naturally, AriZona Iced Tea has been a go-to for as long as I can remember.

Keep Reading... Show less

The NBA is back, and for basketball fans, like myself, it has been the BEST news we have heard since COVID-19 shutdown play indefinitely. I mean, come on, we need to see if James Harden can once again perform so well he has back-to-back 50 point games, Kawhi can lead another team to the championship title, and whether Giannis is going to be back-to-back MVP... among like 500 other things running through our heads!

In the midst of all of the amazing statistics and records that these players are breaking, though, we also just love the NBA because well, there are some pretty good looking guys out there. Here are the 19 hottest NBA players (in no particular order) you would totally let slam dunk on you now that the NBA has returned.

Keep Reading... Show less
Health and Wellness

Everything You Need To Know About Macronutrients, Because A Diet Should Be More Than Calories

Pay attention to what you're eating, not just how much you're eating.

Plenty of people are familiar with the "calories in, calories out" (CICO) method of dieting which can be used for losing, gaining, or maintaining weight. This method relies on calculating a person's total daily energy expenditure (TDEE) to ensure that they are not overeating or undereating to achieve their desired weight. TDEE considers a person's height, weight, age, gender, and level of activity to determine what their caloric intake should be — some calculators can factor in body fat percentage as well. When I used a TDEE calculator online, it said that my TDEE would be 1,990 calories if I was trying to maintain my weight, but are all calories created equal? I'd argue that they're not.

It might seem obvious to some of you that 1,990 calories of macaroni and cheese are not healthy at all compared to 1,990 calories of varied foods (fruit, veggies, meat, bread, etc.).

Keep Reading... Show less
Swoon

Just Because You're Asked To Be In A Wedding, Doesn't Always Mean You Should Say Yes

If you can't invest time, money, and YOURSELF, maybe say no to the offer for the bride's sake!

Being in a wedding is a really big commitment. I personally think if you've never been in one before, you don't understand the time, money, and energy that goes into being a part of it.

Keep Reading... Show less
Politics and Activism

Dear Closeted Latina,

You were never alone.

Remember how the Latin world got rocked when Ricky Martin came out?

Keep Reading... Show less

If you're anything like me, you're probably anxious about going back to college. The uncertainty of nearly everything is stressful and makes it difficult to prepare for going back to campus. Take it one step at a time and remain calm! If nothing else, take a look at this list of six essentials for living on campus during the COVID-19 pandemic! You got this!

Keep Reading... Show less

First, let's talk about some reasons people cheat in relationships in the first place:

1. They have low self-esteem.

Are you feeling like you are not good enough? Do you feel like you are not attractive enough? Feeling as if you are not worth the love can lead to self-sabotage.

Keep Reading... Show less
Facebook Comments