How To Spread Bet Bitcoin

How To Spread Bet Bitcoin
Subscribe now to recieve exclusive updates and offers!
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling
Bitcoin, Cryptocurrency, Exchange Platforms, Gambling

Cryptimi uses cookies to ensure you get the best experience.
Learn more by reading our cookie policy.

This ad promotes cryptocurrency within the EU (by eToro Europe Ltd. and eToro UK Ltd.) & USA (by eToro USA LLC); which is highly volatile, unregulated in some EU countries and the UK., no EU consumer protection. Investments are subject to market risk, including the loss of principal.
With the continued rise and legitimization of Bitcoin and blockchain technology , many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the price will rise in the future, but there are a multitude of other ways for savvy investors to make money in this emerging market (and without having to even own the underlying asset).
The two most used options for investing in the cryptocurrency space without purchasing the underlying asset are Contracts for Difference , frequently referred to as CFDs, and spread betting. Spread betting can be applied to any financial market , not just cryptocurrencies, and lets traders speculate on whether the price of that asset will rise or fall. Spread betting refers to betting on the price of the asset in reference to its spread, or the difference between the lowest selling price, known as the bid price, and the highest buying price, known as the ask price . If you think the cryptocurrency will increase in price, you select the bid price, and if you think the market will decrease, you choose the ask price.
The first thing you
need to do is choose the cryptocurrency you would like to speculate on. Once
you’ve decided on an asset, you need to determine whether you think that
cryptocurrency is going to increase or decrease in price. If you think the
price will go up, you will take a long position , or a positive
position, and if you think it will go down, you will take a negative position
know as a short position. At this point, you determine how
much money you would like to invest per increment of market movement, commonly
referred to as your stake.
Since spread betting gives you the opportunity to invest with leverage, it is a riskier than traditional investing , as you only need to put up a fraction of the value you are trading. This leverage means your possibility of profit (but also loss) increases, and you have lesser room for mistakes. You can partially manage some of your risk by setting stop-losses and determining at what price points you will take profit.
Although by utilizing CFDs investors do not have to own the underlying asset , they still require a capital gains tax to be paid on all profit. Since spread betting is literally considered gambling and not investing in the United Kingdom, speculators are not subject to taxation on their profits. Although spread betting is regarded as gambling , it is strictly regulated by the Financial Services Authority of the UK, or FSA, meaning all brokerage firms have to adhere to preset regulations.
These are major advantages in terms of regulatory adherence and lack of taxation of profits, but there is a negative side to cryptocurrency spread betting. If you are unsuccessful in your trading and lose money, you are not able to write off your losses like you would for other types of trading losses. This goes hand in hand with not being taxed on profits .
Depending on the outcome, another major risk or advantage is the ability to invest with leverage. This means that if you choose to do so, you can have greater market exposure and greater risk than you would usually have with an equal amount of money. Although trading with leverage is inherently much riskier, we mentioned that setting stop losses and profit levels can help you to statistically mitigate some of that risk. Another thing to consider, especially with Bitcoin and cryptocurrency spread betting, is that brokers typically do not charge trading commissions and allow 24-hour trading. However, since many brokers will not charge commission on spread betting, they may charge wider spreads, another factor that will increase your risk. This is why it is always important to do your own research before choosing a broker.
As we just covered, the risks of spread betting are directly tied to the potential benefits. Since spread betting gives traders the opportunity to trade with margin, they have a higher change for profits or losses, as well as a higher risk profile . Also, since spread betting is considered gambling and is tax free, you will not be taxed on your profits, but will not be able to make a tax deduction on your losses. We mentioned different trading techniques that will help you mitigate these risks even if you’re margin trading.
Spread betting and CFDs both offer investors the ability to trade in a market without owning the asset . Both methods also offer users the ability to trade with leverage, meaning there is a higher risk and higher reward potential in both of these cases. You also have the option to go either short or long when determining the asset price.
The biggest differences between spread betting and CFDs is how they are handled for taxation and their legality as a trading option in many countries. With CFDs you have to pay capital gains tax on profits, but you are also able to write off your losses; with spread betting neither is an option. Also, since spread betting is considered gambling, it is widely illegal depending where you live. These limitations often make spread betting only available to people in the United Kingdom and Ireland, while CFDs are available to most parts of the globe.
Spread betting is legal in the United Kingdom, Ireland, some parts of the EU, and Canada, but if you do not live in a country where spread betting is offered and you open an FSA regulated account, you may no longer be tax exempt . This will be depending on your country’s financial and tax regulations and needs to be determined on a case-by-case basis. Since spread betting is considered online gambling and not trading, it is notoriously illegal in the United States.
Since different spread betting services will offer you different options, you must pick the correct exchange for your needs. Generally, spread betting brokers will not charge you any commission to place your bet, but that means they need an alternative way to generate profit for themselves. Instead of taking commission, the broker will create an inherent “fee” by slightly widening the spread in their favor. For example, if the cryptocurrency you are investing in would have a normal buy price of $400 and a normal sell price of $403, the broker will widen the margin to $398 to sell and $405 to buy, allowing them to profit on your spread. Before registering with a specific broker, such as Plus500 , make sure their spread offerings are within your margin tolerance.
Another aspect you want to consider before placing your spread bet on a platform is to see the point range or “pips” considered market movement. For certain assets, the movement can be as low as 0.4 pips, but can sometimes reach up to 3.0 or higher for markets like crude oil. You also want to make sure that the spread betting platform you are registering with offers the correct cryptocurrencies you would like to bet on. Many platforms will offer 10s of thousands of different markets you can spread bet on, but when it comes to cryptocurrency, the options are much fewer. Although you have the option to place spread bets on as many cryptocurrencies as the platform offers, they will mostly likely only offer the largest cryptocurrencies by market capitalization, starting with Bitcoin and Ether.
When first getting started with Bitcoin spread betting, it is very important that you do not over leverage yourself. Even if you are very confident in your predictions, if you over leverage your position, a small fraction of market movement will have the potential to wipe out your position. You want to start slowly and consider increasing your leverage as you become more experienced. Remember, spread betting is considered gambling, and just with CFD trading alone over 75% of accounts lose money. Make sure you start slowly and learn as much as you can before over extending yourself.
All in all, Bitcoin spread betting has many different pros and cons when compared to traditional investing or trading CFDs, so you need to evaluate what your goals as an investor are to choose the right path for yourself. There are many ways to gain market exposure in this new and evolving market, so you need to choose the best method for yourself. For some of you, this may be Bitcoin spread betting, but for many, you may choose to take a different route. Yes, Bitcoin spread betting is very risky, but it can also be extremely lucrative if you know how to play the market correctly and make the right decisions.
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]
What is Bitcoin Spread Betting? With the continued rise and legitimization of Bitcoin and blockchain technology, many speculators want to figure out the best way they can capitalize on this asset class and make a profit. One of the options is purchasing a cryptocurrency such as Bitcoin or Ether as a speculative asset, hoping the […]

Cryptimi.com is to be used for information purposes only. None of its content should be treated as financial or investment advice. While we may receive compensation from some of the products we review, you do not incur any extra charge whatsoever for using our content and clicking external links.

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.

Become a fan on Facebook
Follow us on Twitter

Bitcoin has had its ups-and-downs in the few short years that it has been in existence. If you like to take risks, then it may be the spread bet that you have been looking for. You may have to look harder than usual, however, as not all spread betting providers are allowing bets on the volatile value.
For instance, IG started with a flourish earlier in the year, boasting that they would be the first brokerage to offer binary bets on bitcoin, only to pull the plug a few months later. One problem for spread betting providers is that bitcoin shows great volatility, and because of its virtual nature, the broker has to take trades onto its own account rather than laying them off onto the markets.
Let’s take an example and assume Trader Jack wants to place a bitcoin spread bet. Bitcoin is traded on margin which means that trades are leveraged; and $1 bet per point on Bitcoin is equivalent to betting on 100 XBT. Let’s assume that bitcoin is currently trading at $700. A trader may see the bid prices quoted as 69,850 and the ask price listed as 70,150. The trader believes that the price of Bitcoin will continue rising so decides to go long (buy). He decided to place a bet of $10 on each point of price movement. A few weeks later the new ask price of bitcoin is 72,150 (which is a 2,000 point rise). The profit (or loss) would be calculated like this:
Profit or loss = (settlement price – opening price) x stake
In the above trade example, the profit the trader earns is:
Profit = (72,150 – 70,150) x $10 = $20,000
To try to understand the nature of bitcoin and why it is different from many other financial bets, you need to go back to its origins. The idea of bitcoin came about in 2008 in response to the global financial crisis. It was to present an alternative to fiat currency, that is most currencies, which are based purely on a government’s word. It has been many years since currencies were required to be backed by physical gold held in a vault.
Fiat currency has been criticized over the years, and even now with the US doing “quantitative easing” on a regular basis, you can see the production of money seemingly from thin air, which seems intuitively to be an inherently unsound practice. Some feel that bitcoin is the same as it also seems to “appear”. However, it is generated by virtual work and there is an absolute cap on the amount that can be in circulation.
The risky side of bitcoin is that it is not innately worth anything. It has recently run up to $340, but it could just as easily be $1000, $100,000, or $2.50. Many commentators are saying that bitcoin is in a bubble. For example, in April 2013 it rose from $30 to $260 in a month, crashing back below $70, demonstrating classic bubble behaviour.
Bitcoin has proved ideal for money laundering, and this has caused government intervention, which again affected the value of the bitcoin. There is no reason for the value to continue to rise, but then again, there is no specific reason for it to fall. It is the perfect speculative instrument, depending solely on what the market believes it should be at any particular time.
Proponents point out that bitcoin is not dependent on any particular marketplace, and is based on a worldwide-distributed network, which in itself means that no one can pull the plug on the operation. Another advantage is said to be that there is no “short pressure”, in other words speculators cannot sell bitcoins that they do not yet own. However, this refers to regular bitcoin trading as defined by its founders. The fact is, as you probably know, with spread betting you can bet on prices going down as well as up, and do so just as simply. This feature of spread betting is what places the spread betting providers in the awkward situation of being unable to lay off bets, and having to make their own market.
As a currency, bitcoin fluctuates too wildly to allow regular commerce. For instance, buying something for five bitcoins one day which may only be worth three bitcoins the next day can cause significant problems. But as bitcoins are not used extensively for commerce, at present this is not a difficulty.
If bitcoins are regarded as a speculation and more like a commodity, such as gold, then value analysis is easier, but the overall problem is trickier. Gold and therefore bitcoins could be thought of as a way of storing value. In this context, the current value at time of writing of all the bitcoins in circulation is $4 billion. However, as there is no physical substance or coin there is no guarantee that the value of a single bitcoin will not fall to one cent, undermining the stored value concept.
In the end, it comes down to how much you want to risk, and whether you feel that you can anticipate other speculators’ actions and hence the movement of the value. There is no doubt that fortunes may be made or lost trading with such volatility, so it comes down to a personal decision on how much you want to speculate.
The spread on the Bitcoin market is likely to be variable and fluctuating according to the present market volatility. Providers can’t easily hedge such contracts so they rely on their book to balance exposure; so say suppose they have 2000 clients that are long and another 4000 that are short of Bitcoin – the 2000 longs and 2000 short cancel each other out. If the market goes up, the longs make money while the shorts incur a loss. But what happens if the book is unbalanced as in this scenario? What happens if there are an extra 2000 that are short? They’re losing money but since there are no real trades happening on any exchange, when the shorts decide to close their deals at a loss, the broker gets that money.
But what happens in this situation if the market goes the opposite way (i.e. down)? There are an extra 2000 clients which are long and making money. This money will come from the provider’s bank account which is okay as long as the broker has a big buffer of cash which he can pay from. The problem is that this also introduces solvency risk and the bitcoin CFD broker may only have a limited amount of money on standby which may not be enough to pay all in a Black Swan scenario.

This entry

is filed under academy .

You can follow any responses to this entry through the RSS 2.0 feed.

You can leave a response , or trackback from your own site.

Mail (will not be published) (required)
The content of this site is Copyright 2010 - 2017 Financial Spread Betting Ltd. Please contact us if you wish to reproduce any of it.
Trade the markets with TradeNation ! TradeNation offer tight spreads and low rollover costs! Trade responsibly: Your money is at risk. 69.9% of retail investor accounts lose money when trading CFDs and spread bets with this provider.

Author: Michael Ellis Michael is an avid cryptocurrency enthusiast and writer. He is the main writer for Cryptocoin Stock Exchange.

Choose a language
English
Deutsch
Vistreli Sperm
Sensual Big Tits
Privates Android

How To Spread Bet Bitcoin

Report Page