Want to trade Bitcoin? Here is how to get started in Bitcoin trading.
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 brokers for trading here or read our reviews of the below:
- IG is the largest LSE listed broker offering bitcoin spread betting
- ETX Capital are another broker to offer spread betting on Bitcoin (see more)
- One of the biggest brokers to trade bitcoin with is: PLUS 500 (CFDs only)
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 someone like ETX. ETX Capital have been around since the 1960 as Monecor and are members of the London Stock Exchange. They specialise in spread betting. 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 ETX or other 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?
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.
Spread betting on bitcoin is done on margin so it is possible to lose more than you hold in your account.
Although Plus 500 don’t offer spread betting you can trade Bitcoin on CFDs which are pretty much the same thing except thing iwthout the tax benefits.
You can open an account online with PLUS 500 here or just playabout with the Bitcoin chart below.
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Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.