Bitcoin ushered in a new era of decentralized transactions over thirteen years ago. It continues to attract traders and investors worldwide with its potential to deliver quick profits through rapid price movements. The harbinger of all cryptocurrencies is readily available for trading online but the sheer number of brokers offering it might overwhelm you.
At BestBrokers.com, our goal is to ease and simplify the selection process and assist you in finding a trusted Bitcoin broker that fits your trading style, needs, and objective. We achieve this by providing our readers with a broad collection of honest, comprehensive, and fact-based broker reviews. Due diligence, persistent effort, and painstaking research are the foundations of our work.
The members of the team behind BestBrokers.com have been engaging in Bitcoin trading and broker analysis since the early days of this cryptocurrency. We know what it takes to deliver the information you need to make an informed choice of a broker. Furthermore, the team revisits the recommended trading sites regularly for potential changes or improvements to ensure our readers have access to accurate and up-to-date information at all times.
Best Bitcoin Brokers
- 1. AvaTradeRegulated byFCA (United Kingdom), ISA (Israel), ASIC (Australia), CySEC (EEA), FSCA (South Africa), FSC (British Virgin Islands), FSA (Japan), CBI (Ireland), FSRA (Abu Dhabi)BTC Spreads/Fees0.20% over-market for BTC/USD, 0.30% over-market for BTC/EUR and BTC/JPY, 2% over-market for BTC GoldBTC Leverage2:1 for EU clients; up to 25:1 for non-EU and professional clients; 5:1 for BTG/USD on professional accountsBTC Margin50% on retail accounts and 4% on professional accounts for BTC/USDSupported AltcoinsRipple, Litecoin, Ether, Stellar, Dash, Bitcoin Cash, Solana, Polygon, Shiba Inu, IOTA, NEO, Dogecoin, EOS, Uniswap, ChainlinkCountry Restrictionsthe USA, New Zealand, Belgium, Cuba, Syria, IranCFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
AvaTrade shines on the online trading horizon as a cost-effective, reliable, and diverse brokerage that operates under the regulatory glare of ASIC, CySEC, FCA, and FSA. Largely considered a low-risk trading site, AvaTrade caters to 300,000 satisfied customers worldwide with multiple financial instruments like forex, indices, stocks, commodities, and bonds.
Bitcoin is also readily available for trading at this broker, with clients having a choice from various markets, including BTG/USD, BTC/USD, BTC/EUR, and BTC/JPY. Trading Bitcoin CFDs is an option for AvaTrade retail customers, who can take advantage of maximum leverage of 2:1. Professionals and clients based outside the EU can access higher leverage ratios for Bitcoin trades. They can amplify their positions at rates of up to 25:1.
Spreads for Bitcoin generally start at 0.20% over-market, but the exact costs built into the trades vary across symbols. Apart from Bitcoin, AvaTrade supports a nice range of altcoins to create more trading opportunities for customers who can stomach the volatility. The most popular options include Ripple, Ether, Litecoin, Bitcoin Cash, and Stellar.
AvaTrade clients can fund their live accounts with various secure solutions, such as Visa, Mastercard, WebMoney, Neteller, Skrill, and Wire Transfers. Minimum deposits start at $100 but you have the option to give the brokerage a test drive via a free demo account.
- 2. Plus500Regulated byCySEC (EEA), FCA (United Kingdom), FSAS (Seychelles), ASIC (Australia), FMA (New Zealand), MAS (Singapore), ISA (Israel), FSCA (South Africa)BTC Spreads/Fees0.30% over-market for BTC/USDBTC Leverage2:1 for retail customers in the EU and AustraliaBTC Margin50% initial margin and 25% maintenance margin for BTC/USDSupported AltcoinsEthereum, Litecoin, Solana, VeChain, Chainlink, Uniswap, Axie Infinity, Polkadot, Polygon, Bitcoin Cash, NEO, EOS, IOTA, StellarCountry RestrictionsCanada, USA, Syria, Iran, Cuba, and moreCFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Plus500 is one of the biggest brokers for crypto and Bitcoin trading. Fully regulated in several top-tier jurisdictions, the brokerage caters to over 400,000 clients and handled more than 82 million opened positions in 2020. Its trading volume for the same year amounted to $1,700 billion. Plus500 facilitates cryptocurrency trading via a range of intuitive mobile and desktop platforms that offer various useful tools.
At this brokerage, you can dabble into the world’s most popular decentralized currencies, including Bitcoin, Bitcoin Cash, Solana, Polkadot, Ethereum, Litecoin, and Cardano. Customers who create retail accounts can amplify their crypto trades with leverage of up to 2:1. Bitcoin traders can better control their gains and losses with the help of stop loss, guaranteed stop, and trailing stop orders, among others.
Spreads for Bitcoin trading start at 0.30% over the market, with margin requirements of 25% to maintain your leveraged positions. Rollover funding fees are in place for leveraged trades that stay open overnight. Traders who roll over their BTC/USD buy trades incur charges of -0.0506%, while those who roll over their sell positions for the same pair are charged -0.0281% on average. Customers with live accounts can fund them via PayPal, Skrill, Mastercard, Visa, and direct bank transfers.
- 3. eToroRegulated byFCA (United Kingdom), CySEC (EEA), ASIC (Australia), NDB (the Netherlands), FSAS (Seychelles), SIPC, FINRA, FinCEN (United States), GFSC (Gibraltar)BTC Spreads/FeesSpreads of 0.75% over-market for BitcoinBTC Leverage2:1 for retail accounts under ESMA and ASIC regulationsBTC Margin50% for retail accounts, 5% for professional accountsSupported AltcoinsEther, Bitcoin Cash, Dash, Litecoin, Ripple, Ethereum Classic, Cardano, IOTA, Stellar, EOS, NEO, Tronix, Binance Coin, Tezos, Zcash, Polkadot, Dai, Chainlink, Compound, Dogecoin, Uniswap, Filecoin, Algorand, Cosmos, Spark, Polygon, Solana, Shiba, Celo, Synthetic, and moreCountry RestrictionsJapan, Canada, China, Cuba, Crimea, Egypt, Hong Kong, Indonesia, India, Macau, Kenya, New Zealand, Montenegro, Nigeria, Russia, Panama, Saudi Arabia, Serbia, Ukraine, South Africa, Turkey, Tanzania, Liberia, the Bahamas, Albania, and moreCFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Founded in 2007, eToro is a highly acclaimed fintech company from Israel that offers trading across multiple asset classes. An industry leader in the provision of social trading services, eToro serves clients with the authorization of the FCA, ASIC, FinCEN, and CySEC. Clients face an impressive diversity of trading instruments, including over 30 commodities, 2,700 stocks, 49 fiat pairs, 13 indices, and 260 ETFs.
The company caters to crypto traders with a wide choice of 45 decentralized currencies. Aside from Bitcoin, you can invest in a range of other leading crypto assets like Litecoin, Solana, Ripple, Ether, Stellar, Dogecoin, and Polygon. Trading more than a hundred crypto crosses is also possible at eToro.
The broker stands out in a crowded field of competitors by combining several crypto solutions into one. Customers will benefit from a crypto wallet, a user-friendly trading platform, and a crypto exchange. Professional and institutional-grade traders can buy and sell cryptocurrencies via eToroX, the broker’s proprietary exchange software.
The eToro Money wallet is another service unique to the brokerage. It allows users to store, receive, and move decentralized currencies via unique and fully private on-chain addresses. Last but not least, eToro facilitates Bitcoin trading on margin through CFDs with retail leverage caps of 2:1.
- 4. SwissquoteRegulated byFINMA (Switzerland), FCA (United Kingdom), MAS (Singapore), SFC (Hong Kong), MFSA (Malta), DFSA (Dubai)BTC Spreads/FeesCommissions for crypto trading range from 0.5% to 1% based on volume; $10 fees for withdrawals from crypto walletsBTC Leverage2:1 for retail customersBTC MarginNot specifiedSupported AltcoinsLitecoin, Ether, Ripple, Chainlink, Bitcoin Cash, EOS, Stellar, Ethereum Classic, Tezos, Ox, Cardano, Augur, Uniswap, Cosmos, Filecoin, Algorand, Aave, Compound, Dai (Maker), Dogecoin, Polkadot, Solana, Avalanche, PolygonCountry RestrictionsLacks authorization from the regulatory bodies of Russia, Canada, Italy, Germany, and the United StatesTransactions on foreign exchange (forex) instruments and contracts for differences (CFDs) are highly speculative and complex and come with an extreme degree of risk in particular due to leverage. In our experience, between 70% and 80% of retail investors are losing money when trading forex instruments and CFDs. Losses are in theory unlimited.
Operating since 1996, Swissquote is a reliable financial services provider that hails from Gland, Switzerland. The Swiss financial entity started as an investment bank but gradually expanded its range of services, presently offering retail trading across different asset classes like forex, commodities, stocks, indices, and virtual currencies.
The company trades publicly on the SIX Swiss Exchange and has registered offices in global financial hubs like Hong Kong, London, and Dubai. At Swissquote, you can seize hundreds of trading opportunities from around the globe, having a choice from over 400 fiat instruments and derivative products.
Swissquote goes way beyond Bitcoin, the forefather of all digital currencies. It presently provides 26 cryptos, including major ones like Ether, Ripple, Litecoin, Cardano, Dogecoin, Dash, Avalanche, and Solana. Customers have the option to trade and exchange them against fiat currencies.
Unlike most other online brokerages, Swissquote does not just offer exposure to the cryptocurrency markets through derivative products. Apart from price speculation, traders can hold real cryptos like Bitcoin in their Swissquote wallets.
Proficient investors can experiment with more complex products like ETPs, ETFs, mini-futures, and other cryptocurrency derivatives. Clients have the opportunity to invest in whole baskets of decentralized coins. One example is the Swissquote Multi Crypto Active 2.0 basket which brings together multiple cryptocurrencies like BTC, ETH, XLM, LTC, ADA, and DOT.
- 5. AdmiralsRegulated byCySEC (EEA), FCA (United Kingdom), AFSL (Australia), FSA (Seychelles), EFSA (Estonia), JSC (Jordan)BTC Spreads/Fees0.3 average spreads for BTC/USD, no commissionsBTC Leverage2:1 for European or Aussie retail traders and 10:1 on professional accounts for the BTC/USD pair (leverage ratios vary across crypto cross/fiat pairs)Minimum BTC Margin0.5 for retail customers, 0.1 for professionalsSupported AltcoinsEther, Ripple, Litecoin, Bitcoin Cash, Dogecoin, Solana, Cardano, Algorand, Cosmos (Atom), Dogecoin, Polkadot, Dash, EOS, Ethereum Classic, Kusama, Chainlink, Polygon, Uniswap, Stellar, Monero, ZcashCountry RestrictionsJapan, Canada, the United StatesCFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Admirals is a full-spectrum broker that has been providing premium online trading services since 2001. It continues to enjoy an outstanding reputation among traders thanks to its competitive spreads, flexible account options, and superb order execution. The broker offers reliable trading platforms like MT4, MT5, WebTrader, and MT Supreme Edition.
Retail traders who join Admirals will benefit from an investors compensation program, negative balance protection, and fully segregated accounts. The brokerage provides immediate access to the global markets, allowing clients to trade forex, shares, indices, commodities, and bonds.
Digital currencies are also well-represented at Admirals where traders will find multiple options in addition to Bitcoin. From Solana and Cardano to Ether and Litecoin, you can gain greater exposure to the cryptocurrency markets through derivative products like CFDs. Leverage caps on popular pairs like BTC/USD stand at 2:1 for retail customers, while professionals can supercharge their exposure at ratios of up to 10:1.
The choice is vast indeed, with 10 crypto crosses and over 30 crypto-fiat pairs. Trading crypto on the go is a seamless process via Admirals’ intuitive apps for iOS and Android devices. The applications give users access to over 7,500 markets and are available in five languages, English, German, Spanish, Arabic, and French.
Our Meticulous Review Process and Methodology
During the review process, we implement an in-depth methodology we have developed ourselves. Our reviewers rely on a structured and holistic approach, whereby they appraise each Bitcoin broker’s performance across several evaluation areas, each with multiple variables.
Based on these variables, the brokers get points for each individual category. Then we crunch down the results into a conclusive score which we publish above each review. In what follows, we describe the aspects we look at during our broker assessment process.
Legalities and Regulatory Landscape
The first thing we check is which financial authority oversees the broker. We verify the license numbers published by the brokerage in the corresponding regulators’ registries to confirm its current license status. Brokers that stand in good grace with several diligent regulators like ASIC, FCA, and CySEC get ahead on our list.
Range of Account Types
The second step in our review process is to look through the range of account types a given Bitcoin broker has on offer. There should be options for retail traders with limited capital and professionals with years of experience in crypto trading and investing. The minimum amount required to set up an account and start trading is another aspect we consider. If the amount is too high for retail investors, this would negatively affect the score for this area.
Suite of Costs Associated with Bitcoin Trading
Compiling a list of trading and non-trading costs you can anticipate from the broker is the next step in the process. The reviewers check the spreads and commissions, comparing them with those at other trading sites to see how the broker fares against the competition. Overnight rollover, dormancy, and guaranteed stop order fees also bear consideration.
Software Functionality and Features
We dig deep into the software platforms implemented by the brokers to uncover and assess all their features. The reviewers pay close attention to the range of tools for fundamental and technical analysis as well as the overall usability and user-friendliness of the platforms. A bulky cluttered interface takes away points from the broker’s score for this category.
Traders these days insist on having the flexibility to monitor and manage their positions at all times. Highly functional native apps for iOS and Android devices earn the brokers higher scores. We install the applications on multiple smartphones and tablets to see whether they behave as expected on different versions of the operating systems.
Range of Cryptocurrencies and Asset Classes
Next up, the team evaluates the range of tradable cryptocurrencies to verify whether it is comprehensive enough. Offering only Bitcoin will not cut it with us. Clients should also have the ability to dabble in other decentralized currencies like ether, tether, and ADA, among others. The same goes for fiat instruments and asset classes. A broker that quotes prices for stocks, bonds, fiat currencies, and commodities will climb up to a higher position on our recommendations list.
Quality of Order Execution
The BestBrokers.com reviewers closely assess the quality of order execution at each broker. Fast enough execution is essential because it results in less slippage and overall cost reduction for your transactions, especially for active traders and scalpers who place market orders.
Accepted Banking Methods
After testing the Bitcoin trading platforms in demo, we open live accounts with the brokers, fund them, and then withdraw from the balance to properly evaluate the transactions’ speed. We also consider the feedback of other clients, observing for any complaints associated with delayed payments. The range of available deposit and withdrawal options is equally important to us. Traders should be able to manage their balance with the payment methods they feel most comfortable with.
Customer Care and Communication Channels
The BestBrokers reviewers get in touch with each site’s support representatives to see how they handle queries and issues first-hand. They test all available communication channels (the more, the better) to assess the average response times and the competence of the support staff. Bitcoin brokers with 24/7 live chat support score the highest with us.
Research and Education Resources
Educational resources do not carry equal weight with other parameters like regulation and execution speed, but we still consider them during the review process. We deem them important as they work to the benefit of beginner Bitcoin traders. Knowledge and informed decision-making are the key prerequisites of any trader’s success, which is why the availability of webinars, free videos, tutorials, and ebooks can add to a broker’s score.
Investor Protection Measures
All regulated brokers we have listed implement various measures to protect customers and their funds. Bitcoin traders who have access to leverage will benefit from margin close-outs and negative balance protection. Our reviewers additionally observe for compliance with the regulators’ rules for funds segregation. A brokerage storing its clients’ money in accounts at tier-one banks is a bonus for points.
Why Trade Bitcoin with Online Brokers?
Bitcoin trading comes with a bespoke set of benefits that have been driving its growth and popularity in recent years. That being said, you should approach this crypto coin with caution due to its highly volatile nature. Never forget that dedication, patience, market research, and knowledge are your most powerful tools for success.
Swift Price Movements Can Result in Quick Short-Term Profits
Bitcoin is a great tool in the hands of adept day traders and scalpers who seek to lock in quick short-term profits from the rapid price movements of this highly volatile market. The high volatility of this cryptocurrency creates more trading opportunities for smart investors, especially during periods when the traditional markets are flat.
Ability to Go Long or Short
Bitcoin brokers give you the flexibility to take long or short positions, which enables you to gain from the spikes and declines of the prices. With derivative products like futures and contracts for difference (CFDs), you don’t even have to own any Bitcoins to join the action. You can speculate and potentially profit from the price fluctuations alone.
Decentralization Equals Higher Trader Autonomy
Standard fiat currencies face various restrictions and those who own or trade them are not fully in control of their money. This is not the case with cryptocurrencies like Bitcoin, whose decentralized nature paves the way for higher levels of anonymity and sovereignty. No government or banking institution has the remit to control and interfere with them.
Round-the-Clock Access to the Bitcoin Market
The forex and stock markets close during weekends as well as on major holidays like New Year’s Day and Christmas Day. By contrast, the Bitcoin market remains open for trading at all times, giving you access to round-the-clock opportunities to profit.
Access to Leverage
All top-level brokers facilitate trading with derivatives like the CFDs, allowing you to trade on margin and gain full market exposure by leveraging your trades. With access to leverage, you can inflate the size of your positions by borrowing extra capital from the broker. For Bitcoin, EU and Australia-regulated brokerages offer relatively low leverage ratios of 2 to 1 to mitigate the cryptocurrency’s massive volatility.
Low Trading Costs
Unlike buying and selling crypto assets at exchanges, online brokers allow you to dip into the Bitcoin market in a relatively cost-efficient way. Some of the brokerages we list facilitate commission-free Bitcoin trades. Such companies profit from the spread markups built into the bid/ask prices, which are nominal in some cases.
Ways to Trade Bitcoin at Online Brokers
There are various ways to tap into the Bitcoin market, the most common of which are spot trading and using derivative instruments like contracts for difference (CFDs), options, and futures. We outline their characteristics in the paragraphs to follow.
Spot Bitcoin Trading
With spot trading, you purchase or sell Bitcoin on the spot, i.e. on the current market prices, and your purpose is to rack up profits from market movements. Your orders settle immediately and you are the actual owner of the tokens you buy or sell.
CFDs are derivative products offered by many of the regulated brokers we recommend. They enable you to capitalize on the Bitcoin price fluctuations without buying or owning any tokens. You open long positions when you believe the tokens’ value will appreciate or short positions when you think it will depreciate. You can profit from price differences alone. Inflating your positions through leverage is also possible.
Futures are another derivative instrument that gives you access to leverage, allowing you to gain market exposure without owning or holding the underlying assets. These derivative contracts allow traders to take risks on the tokens’ future prices. They have a limited lifespan and typically expire each month. There are also quarterly contracts that expire after three months and perpetual futures that lack expiration dates.
Bitcoin options also belong to the category of derivative products, giving you the right to purchase or sell tokens at a predefined price by a predefined date but without obligating you to do so. Call options entitle you to the right to purchase tokens at a prearranged future price, whereas put options do the opposite, i.e. they give you the right to sell at a predefined strike price.
Bitcoin Brokers and the Platforms They Implement
The software a broker uses is your doorway to the Bitcoin and crypto markets. A good trading platform facilitates effortless user experience and seamless execution, not to mention it provides an exhaustive range of tools for fundamental and technical analysis. While some brokers develop their software in-house, many prefer to use established third-party platforms like those we describe below.
MetaTrader 4 (MT4) – As one of the oldest platforms for online trading, MT4 is the go-to software of brokers and traders alike due to its proliferation of features. This groundbreaking platform is courtesy of MetaQuotes Software and has been in use since 2005. It comes with expert advisors, multiple technical indicators, many graphical objects, and over a thousand trading signals.
MetaTrader 5 (MT5) – The successor of MT4 opens the door to trading multiple asset classes, including cryptocurrencies like Bitcoin and Ethereum. It offers more functionalities and features such as algorithmic trading, automated bots, and various built-in tools for market analysis. You can use it on any device you wish as MT5 is fully cross-compatible. The native MT5 apps are available for a free download at Google Play and the App Store.
NinjaTrader – NinjaTrader allows you to capitalize on the Bitcoin market opportunities, providing you with the ability to open micro futures contracts for the world’s leading cryptocurrency. It features more than a hundred indicators along with advanced tools for charting and strategy backtesting. It provides real-time market data thanks to its partnership with Coinbase.
cTrader – A product of Spotware Systems, cTrader gives you the capability to open leveraged CFDs for popular cryptocurrencies like Bitcoin, Ethereum, Ripple, and Litecoin. The platform is a favorite of many crypto traders, largely due to its uncluttered interface and lightning-fast execution speed. The cTrader Copy feature (previously cMirror) gives you the chance to follow experienced traders and mirror their positions and strategies in your portfolio.
Order Types at Bitcoin Brokers
Putting in orders appears intuitive at first glance – you hit the buy button to open a position and then close it by clicking the sell button. However, you must go beyond the customary buy/sell order options to gain full control over your Bitcoin trades.
Combining different order types can help you better manage your risk, maximize your returns, and minimize your losses if the Bitcoin market takes a big dive. Below are some of the most widespread order types available to crypto traders.
Market orders are instructions to immediately buy or sell a given asset, Bitcoin in this instance, at the currently available market price. The downside here is that you have no control over the price at which the order executes. This leads to an increased risk of slippage in the fast-moving crypto markets.
Stop orders are designed to protect traders’ positions and curb their losses. They trigger when the asset prices have moved past a given price threshold. Once that happens, they convert into ordinary market orders, filling at the best current price.
Limit orders fill at prices traders have predefined or better. The crypto broker will not execute the limit order if the prices fail to reach or exceed the predesignated limit price point. It is also possible to implement them jointly with stop orders to protect yourself against huge downside losses if the Bitcoin market experiences sudden dramatic declines.
Take Profit orders belong to the category of limit orders. Traders utilize them whenever they want their positions closed at a specific price to lock in a given target profit. This order type works to the advantage of people who seek to rake in quick profits from rapid bumps in Bitcoin prices.
Trailing Stop orders are highly effective at risk management and profit optimization. They enable you to keep racking up gains until the market turns against you. Traders usually use them wherever they have already opened favorable positions. Trading stop orders help you lock in profits without restricting them. At the same time, they impose limits on your potential losses, allowing you to ride favorable trends while having an efficacious exit strategy at hand.
Costs to Anticipate at Bitcoin Brokers
The costs of trading Bitcoin might be rather steep across unregulated exchanges and brokerages, which is why we advise you to always use the services of licensed brokers like those on our list. Below we give Bitcoin traders a run-through of the most common fees they can anticipate.
- Spreads constitute the discrepancies between the bid and ask prices, i.e. the costs incorporated into the quoted rates of the brokers.
- Commissions are charged by some brokers on top of the bid/ask spread or instead of it. They apply on a per-trade basis, which means you will have to pay them both when you open and close your positions. Commissions usually come in the form of a percentage of your positions’ value.
- Rollover charges apply when you want to extend your unsettled leveraged positions at the end of the trading day. Also called a swap, the rollover can be either positive or negative, depending on whether you have a long or short position. Brokers usually roll over leveraged positions each day until they either settle or the traders close them out.
- Guaranteed stop order fees are the premium you must pay for the luxury of having your positions closed at your requested price regardless of market volatility. These orders eliminate the risk of slippage and are a great tool for risk management. Some brokers charge this premium upfront, while others only do it when the guaranteed stop triggers.
- Dormancy fees are in place whenever traders’ accounts stay inactive for a long period, usually a year. The broker will then start deducting a nominal fee from the live balance for maintenance and administrative purposes.
Strategies to Implement at Bitcoin Brokers
There is no denying racking up quick profits from Bitcoin’s volatility sounds like an appealing idea. However, you stand no chance of conquering this volatile market without devising a coherent strategy. The choice of strategy should be based on your individual trading goals and style. We cover some of the most widely used approaches below.
- Day trading is a common approach that involves opening and closing positions within the same day. The primary purpose of this strategy is to secure quick, albeit small, profits from the fluctuations in intraday prices. Day traders typically utilize technical analysis to determine the best entry and exit points.
- Scalping is similar to day trading in that you execute multiple trades over a brief period. However, the frequency is significantly higher since you open and close positions every few minutes and even seconds. Such traders often resort to bots for trade execution and management rather than monitoring the markets themselves.
- Trend trading is mostly suitable for traders who focus on long-term results. They rely on technical analysis to identify potential profitable market momentum, joining favorable trends and closing their positions upon trend reversal.
- Swing trading is the chosen approach of many traders who prefer to implement fundamental analysis, aka fundamentalists. They hold onto their positions for longer periods, usually between several days to several weeks, in an attempt to book profit from anticipated price fluctuations, i.e. swings.
TA Indicators to Use at Bitcoin Brokers
Technical analysis is widespread among the members of the Bitcoin trading community. The approach enables traders to trace and foresee future price fluctuations based on past price records. It enables them to identify the right time to enter this volatile market, capture their target gains, and then exit. The most common indicators Bitcoin traders use for technical analysis include:
Moving Averages – Traders use moving averages when analyzing prices. These basic indicators reflect the average prices of an asset, Bitcoin tokens in this case, over a given period. They level out price information by continuously updating the average prices of assets.
Bollinger Bands – Created by financial analyst John Bollinger, Bollinger Bands were originally intended to serve stock traders, but you can use them when trading cryptocurrencies like Bitcoin as well. Bollinger Bands comprise three lines, upper, middle, and lower. Using them gives you valuable insights into the strength of uptrends and downtrends.
Relative Strength Index (RSI) – The RSI is a technical indicator that helps you estimate the speed and intensity of price fluctuations. It achieves this by measuring the correlation between downward and upward price movements. This ratio is expressed as a number that ranges between zero and one hundred. It enables you to better identify the periods when the market is overvalued or undervalued.
Stochastic Oscillators – Stochastic oscillators are momentum indicators that rely on support and resistance levels. The Stochastic is similar to the RSI since it gives you an indication of when an asset is overbought or oversold. It achieves this by comparing the current prices with past prices. The difference is that when drawing its comparisons, the Stochastic oscillator also factors in the biggest highs and lows the prices have reached across a given period. Experienced traders often implement it in conjunction with the RSI.
Bitcoin Regulations and Legal Status Worldwide
Financial watchdogs play a crucial role when it comes to fraud prevention, compliance with industry standards, and investor protections. While Bitcoin itself lacks a uniform framework of oversight, the brokers that facilitate cryptocurrency trading are subject to rigid regulatory control.
Working with a regulated brokerage is in your best interest as you will always have legal recourse in case any disputes arise. The brokers that come on top of our list operate under the watchful eye of top regulatory bodies like the ones below.
|The UK||the Financial Conduct Authority (FCA)|
|Australia||the Australian Securities and Investments Commission (ASIC)|
|The EU and the EEA||the Cyprus Securities and Exchange Commission (CySEC)|
|Japan||the Financial Services Agency (FSA)|
|South Africa||the Financial Sector Conduct Authority (FSCA)|
|Switzerland||the Financial Market Supervisory Authority (FINMA)|
|New Zealand||the Financial Markets Authority (FMA)|
|Seychelles||the Financial Services Authority (FCA Seychelles)|
The legal status of crypto assets like Bitcoin differs vastly from country to country. This is something you should check beforehand as some jurisdictions do not recognize Bitcoin as legal tender and impose restrictions or outright bans on cryptocurrencies. China, Egypt, Bolivia, Morocco, Bangladesh, and Algeria are among the countries that restrict or altogether prohibit cryptocurrency transactions.
Common Q&A about Bitcoin Brokers
You can verify your broker’s regulatory status by checking the footer of its website where licensing information and numbers are typically available. Another option is to look up the license registry of your country’s financial regulator. If you reside in the UK, for example, you should ensure your chosen broker operates with FCA authorization.
To begin with, you should find a regulated Bitcoin broker that can legally offer its services where you live. Trading cryptocurrencies with fly-by-night companies is never a good idea as you have no legal recourse and risk being swindled out of your money.
The next thing you should do is learn what factors contribute to Bitcoin price fluctuations. You should also devise a suitable trading strategy and refine it. It is advisable to get your bearings on stop and limit orders to maximize your returns and protect yourself against big market dives.
It all depends on your objective as a trader. If you are looking for long-term investments, registering a Bitcoin wallet and purchasing some tokens is a more viable and cost-effective course of action. Active short-term traders prefer to only speculate on Bitcoin price movements through contracts for difference. However, such derivative products are unsuitable for long-term position holding due to the rollover charges we mentioned previously.
With CFDs, there is no need to own the underlying asset to gain market exposure. They enable you to profit from price movements alone. Long leveraged positions allow you to profit from increasing prices, whereas going short can result in potential gains from declining prices.
Your success as a Bitcoin CFD trader largely depends on the precision of your predictions and the scale of the market fluctuations. Bitcoin CFDs also give you access to leverage, which means you can start with a small investment and inflate your trades with borrowed money from your brokerage.
CFD leverage caps differ across different asset classes and jurisdictions. Bitcoin traders based in the European Union and Australia can leverage their crypto CFDs at a rate of 2 to 1. This leverage cap is significantly lower compared to that for fiat currencies, for instance, due to Bitcoin’s massive volatility.