Home » Brian Colombana- The Advantages and Disadvantages of Trading Forex Using Bitcoin

Brian Colombana- The Advantages and Disadvantages of Trading Forex Using Bitcoin

Forex trading with bitcoin is a new way many are choosing to invest their money. While this method of currency trade may be convenient, the fluctuating value of bitcoin makes it difficult for those who are more experienced says Brian Colombana. As with any type of financial transaction, there are advantages and disadvantages associated with forex trading using bitcoins. The following will explain some of these pros and cons so that an individual can determine if they should give the Fintech industry a shot.

Disadvantages Associated With Trading Forex Using Bitcoin

  • The average individual or professional trader does not have enough knowledge on how to change bitcoin back into their country’s fiat currency–in this case, U.S. dollars (USD)–when doing forex trades, which can affect their bottom line. If the individual is unable to trade back their bitcoins for dollars, they are left at a loss due to the fluctuating BTC/USD value in the market.
  • Other disadvantage individuals may experience when trading currencies using bitcoins is that it exposes their personal information, which means they are subject to security breaches and a lack of privacy when buying or selling bitcoin. For this reason, some prefer not to use their credit cards when purchasing cryptocurrency because once the card reaches its daily spending limit, it cannot be used again until the payment cycle begins anew says Brian Colombana. Finally, if an individual does not have enough money in his bank account to cover his purchase of bitcoins on an established exchange website, he will lose all of his initial capital.
  • As digital currencies continue to grow in popularity, more and more traders are starting to use them in the foreign exchange market. That’s because they offer some unique advantages over traditional fiat currencies. But they’ve also given rise to a whole new set of risks that investors must be aware of before considering whether trading forex with bitcoin is right for them.

What are the main benefits?

  • The biggest advantage that cryptocurrencies have when it comes to trading forex is that. They allow players into this market that wouldn’t otherwise be able to get involved. By using cryptos, everyday retail investors can get access to forex markets. Without needing big bank accounts or minimum investments of tens of thousands of dollars or pounds. Some brokers even let you start trading with just a few dollars.
  • That said, cryptocurrencies also have some disadvantages when it comes to trading forex. They can be volatile and there are plenty of stories of people losing their entire cryptocurrency savings. In what appear to be entirely preventable accidents like hacking or failed trades. High prices can also make it difficult for many traders to get involved. Due to the fact that they simply don’t have enough money to invest in them.

How can you get started?

The easiest way to get started is probably through an online broker like Ava Trade. Which offers contracts for difference (CFDs) on bitcoin prices along with dozens of other financial instruments says Brian Colombana. They let you purchase these CFDs using USD, EUR or GBP. You then trade them like you would any other financial instrument, including using them to speculate on currency prices.

Another option is to use a peer-to-peer trading platform like Coin Corner or Cubits. Which helps you buy and sell cryptocurrencies through a series of face-to-face transactions with traders all around the world. That means that whether you want to speculate on currency prices or simply use bitcoin. As a replacement for your debit card, there’s likely going to be a solution available for you.

These platforms also let people outside the UK and Europe get involved in forex trading. Without needing to worry about those pesky KYC regulations. That said, they don’t offer any leverage options due to the nature of bitcoin as a CFD instrument. So this should be into consideration before making any trades.

How can you protect yourself?

Unfortunately, the main challenges that come with trading forex using bitcoin are mostly related to the fact. That there’s no government regulation and thus no major watchdog can help investors avoid scams and bad brokers. Because of this, it helps to be extra cautious when looking at such platforms. As you need to do your own research and understand how they work before handing over any money.

One way to evaluate a platform is by checking out reviews from other traders who has used them before. These might give you some insight into whether they’re trustworthy or not. And what sort of issues (if any) there might be in working with them long-term. You should also look for a platform that offers a wide selection of cryptocurrency instruments and low fees.

Finally, it’s important to remember that cryptocurrencies are volatile. And you should only ever invest money that you’re prepare to lose says Brian Colombana. That said they also represent an exciting new option for investors in forex markets. And could be the way forward in the future when it comes to trading forex using bitcoin.

Conclusion:

The use of bitcoins as a trading instrument is becoming more and more popular; traders all over the world are looking for the most effective game-changing solution to trade forex using bitcoin.