Want to trade Bitcoin? Here is how to get started in Bitcoin trading.
Please note that since this article was written the FCA has banned retail traders from trading cryptocurrency derivatives. If you would like to speculate on Bitcoin and cryptocurrencies you need to use a cryptocurrency exchange or professional trading account.
Let’s get this straight from the start, it’s probably best that you stay well away from actual bitcoins. It’s just far too early stage and there are too many companies claiming to be the “ultimate bitcoin exchange” then going belly up the next week.
However, chances are you have come across this article by typing into Google “how to trade bitcoin”.
That in itself is a clue that it’s probably best to stay away in the long term.
Where to compare cryptocurrency brokers?
You can compare all bitcoin professional trading accounts for trading here or read our guides to cryptocurrency exchanges and cryptocurrency wallets here.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
If you think there is a trade in the market though and want to speculate on bitcoin without getting too involved. It makes more sense to trade on a derivatives product such as spread betting with a UK FCA regulated broker through a professional account. Spread betting allows you to speculate on the price of an asset by entering into a contract where the outcome is based on the difference between the opening and closing price of the underlying.
So, through CFD trading platform and spread betting brokers you can trade bitcoin, without ever actually owning it. It’s risky as you are trading on margin and just putting down a fraction of the trade value. So whilst in percentage terms, you can make significant profits, you can also make huge losses quickly. Bitcoin is particularly volatile so make sure you fully understand the risks before you trade.
What are the risks of trading bitcoin?
- It is highly volatile
- It is driven by sentiment so unpredictable
- It could be a massive scam and completely worthless
- The majority of people who trade it have no idea what it does
- You can lose all your money
- You can lose more than all your money!
If you want to know more about the risks of trading bitcoin you can read more here.
Actually buying and selling bitcoin instead of trading it
Sure there maybe a few places to buy and sell actual bitcoins. Revolut offers a wallet for buying and selling cryptocurrencies or Coinfloor, which was founded by some fairly well established and qualified people. They are also backed by big venture capital players like Passion Capital and some early Skype employees like Taavet Hinrikus. But that doesn’t count for anything if the business is not run properly.
