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The Pros and Cons of Trading Forex With Bitcoins


19th Aug 2020 Managing your Money

The Pros and Cons of Trading Forex With Bitcoins

Everyday single day, bitcoin continues to evolve and is increasingly being accepted as a viable alternative to the fiat currency. Meanwhile, bitcoins have been inducted into the forex market as an accepted form of "currency," and traders are seriously weighing the pros and cons of cryptocurrencies within forex. 

Many traders find the new crypto dimension to the already dynamic and liquid forex marketplace alluring, as it poses advantages that the traders can use to reap benefits. 

However, as with every other asset out there, trading forex with bitcoin poses its own set of risks.

" Bitcoin and cryptocurrencies are extremely volatile in comparison to stocks, forex, and commodities, however, this presents a great opportunity to ‘buy low, sell high’ for professional traders." said Herbert Sim, commonly known as ‘The Bitcoin Man’, chairman of - iGaming, Crypto, Forex and eSports media.

This might not be everyone's cup of tea, and this article lists out the benefits and dangers of this type of trading. Essentially, it helps you weigh in everything before you take that first step. 


There is a plethora of benefits of using bitcoin in forex markets. Simply put, forex trading with bitcoins acquires the inherent benefits of bitcoins. Here are some prominent perks: 


Transactions can be made without exposing sensitive data like credit card details during withdrawals and deposits while trading forex with bitcoins. This is a significant advantage, especially while trading with foreign brokers.

Many platforms do not even require know-your-customer (KYC) details, and users can remain anonymous. Moreover, since the forex market is round-the-clock, you can trade bitcoins anywhere, anytime with the help of


It is a known fact: Bitcoin records and confirms every single transaction by using a network of computing machines all over the world. All the information is present in a public ledger. As the network holds an immutable copy of the transactions, Bitcoins is entirely transparent


Perhaps the greatest advantage of trading forex with Bitcoins comes from the decentralized nature of the cryptocurrency. In the absence of a central bank, country-specific regulations do not apply to bitcoins.

Moreover, bitcoin valuations do not falter based on geopolitical causes, and its rates do not vary due to nation-specific inflation, unlike fiat currencies. 

Trading fees

Because of its decentralized nature, you do not have to pay transaction fees to central banks or intermediate agencies.

Additionally, you can start trading with a meagre initial deposit fee - some forex exchange companies even allow starting with less than a dollar!

Finally, most of the trading brokers have minute brokerage fees, thus attracting new and enthusiastic customers. Some trading companies even go the extra mile - by providing the initial deposit to draw potential customers. 

Trading Volume

The sheer global nature of bitcoin and forex cannot be rivalled, as the combination of the two colossal markets has enough volume to put the combined global stock market to shame. Moreover, many investors can reap the rewards of the highest liquidity among all crypto assets. 


As with any financial asset, the rewards mirror the risks. Here is a list of typical risks and pitfalls you need to be aware of before venturing into unchartered waters:

Exchange rates

Forex trading with bitcoins is not very beginner-friendly, as exchange rates vary with the specific trading platform. It is important to know which rates your forex broker is using. 


Bitcoins are prone to hacking and theft, as proved by the myriad of news we have been bombarded with constantly. Even the broker's wallets are safe, and hence it is imperative to choose brokers with theft insurance protection for their digital assets. 

Volatility and USD rates

Bitcoins exhibit one of the highest volatilities among all digital assets. Many times, unscrupulous brokers use this to their own advantage, thus procuring enormous losses for the trader. 

Moreover, most brokers instantly attempt selling the deposited bitcoins and hold them in USD, and this exposes the trader to the risks of dollar-bitcoin variations in rates. 


Due to high leverage, venturing into this kind of trading is risky, especially for newbies. Many newbies are at risk of losing all their money as high leverage can lure inexperienced users.

What many rookie traders do not understand is that crypto has its own valuation mechanism; it is a free-standing asset class, and hence the same rules may not apply. Furthermore, the introduction of another currency can disrupt profits and losses, and this increases the probability of losing money. 

Hence, it is crucial to formulate a viable strategy that keeps the associated risks to a bare minimum, while reaping the fantastic rewards. In the end, it is up to the individual trader to pragmatically calculate the tradeoffs and acquire as much knowledge as possible before trading.

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