Did you know you can trade Bitcoin CFDs? A CFD (contract for difference) lets you profit when the price of the underlying asset moves. In this case the underlying asset is bitcoin.
Investors have been trading stock and commodity CFDs for a long time, but only recently have digital currencies been made available for this financial product.
Trading a CFD is much like trading the actual asset. CFDs offer a couple of extra advantages such as being able to sell or short an asset and trade using leverage.
Where to trade Bitcoin CFDs
A number of traditional brokers have begun offering CFD trading of Bitcoin. My personal favorite is eToro. You can trade with or without leverage and both buy and sell these CFDs. This means you can profit if the price goes up or down. For example, if you’re bullish on Bitcoin and believe it will rise, then you would buy or go long. If you’re bearish and don’t believe the hype, you can sell or go short.
When can Bitcoin CFDs be traded
Unlike stocks or forex, which can’t be traded over the weekend, bitcoin CFDs can be traded during this time. That’s because the bitcoin markets never close. eToro recently added weekend trading of Bitcoin. This may appeal to traditional investors (such as myself), who sit around with twitching trading fingers on the weekend.
Are there any fees
The cool thing about opening a long position on etoro is there are no fees! If you buy bitcoin through an exchange, you’ll be hit with a fee which can eat into your profits if you are doing a lot of trading. Short positions do have fees on etoro.
Copy Trading Bitcoin CFDs
If you’re not much of a trader, and don’t want to risk your money with your own limited knowledge, you should consider copytrading. Copy Trading allows you to automatically copy the trades of successful traders.
To copy trade, just search for traders on etoro, who trade cryptocurrency. On etoro, everyone’s trading history is public, so you’ll be able to search through traders and only copy people who have been profitable in the past.