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  • by Shahana Rasul
  • Feb 23, 2022
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Trading Forex with Bitcoin: How Does It Work?


Bitcoin trading is fast approaching being a competitor to trading stocks or currencies in Forex, so you may already be asking yourself the following questions: Why should I trade Bitcoin? What is Bitcoin Trading at all? How to trade Bitcoin with a forex broker? Trading Forex with Bitcoin, is it worth it?

It is quite normal that you ask yourself these questions when you just start to be interested in bitcoin and the forex market or understand that the price is too high and it is too late to buy coins for your wallet.

In this article, we will answer these questions and try to explain how easy it is to trade BTC online. The information in the article was prepared, provided by experts with many years of experience in trading cryptocurrencies through various brokers.


Why Should I Invest in Bitcoin? (4 reasons to choose Bitcoin)

As you probably know, BTC / USD trading is incredibly popular right now. This trading is attractive since it provides great profit opportunities, and also offers many advantages over traditional forex or stock trading.

Why trade bitcoin? 

1.    Trade non-fiat currencies

The main reason to participate in bitcoin trading is that it is decentralized. No amount of government action, economic problem, or policy can affect Bitcoin in the same way that it can affect pairs of traditional currencies such as the US dollar or the Euro. 

Bitcoin is not controlled by any organization, it is mostly "run" by the people who trade it. However, it is worth making an allowance for Elon Musk's tweets, which periodically "drops" the crypt with his tweets with memes.

 Trade non-fiat currencies

2.    Enjoy trading opportunities 24/7

Another reason you might want to consider trading bitcoin is that the cryptocurrency market is open 24/7, 365 days a year. This means you can trade it whenever you want, unlike the forex market, which closes on weekends, BTC / USD can be traded on Saturday and Sunday.

Trading opportunities 24/7

3.    High volatility of Bitcoin

Another popular reason people trade Bitcoin is that it is a highly volatile asset. If you ever get asked what Bitcoin is, just say it's synonymous with volatility. The asset can double in price per night, and this has happened before. 

Volatility is also one of the main reasons why bitcoin trading is often more attractive than investing in the cryptocurrency itself. The speed with which BTC / USD changes its price means that it will be sold and bought again by speculators around the world quite often.

High volatility of Bitcoin


4.    Use your trading skills

Learning to trade bitcoins is much easier than trading Forex or stocks. There are fewer tools to learn, and news that can affect the price is usually very easy to guess.

If you are already trading forex or stocks, then you are in an ideal position to start trading bitcoins, as you have already acquired the skills and the trader mindset you need to be successful. Moreover, it is often possible to sit out the drawdown, because the price goes further up in the future.

Use your trading skills


Can You Trade Cryptocurrency on Forex Market?

You may be surprised to learn that bitcoin trading is possible not only on cryptocurrency exchanges, where from time to time everything lags and trading becomes unavailable. Many forex brokers have already seen the potential of BTC / USD, as well as other cryptocurrencies, and are now offering crypto pairs on their platforms. They are commonly referred to as bitcoin forex brokers.

How to use a forex broker to trade bitcoins?

BTC / USD currency pairs work in the same way as traditional currency pairs such as EUR / USD. If you buy the BTC / USD currency pair, also known as going long or going long, you are assuming that Bitcoin will strengthen against the US dollar. Once the price rises, you can sell it for a profit. On the contrary, opening a short position means that you think that Bitcoin will weaken against the US dollar, you can capitalize on the fall.

CFD (Contract for Difference) on Bitcoin allows you to profit from Bitcoin price changes without actually owning them. This is where you are most concerned about whether you think the coin's price will fall or rise shortly. As with currency pairs, you can go long or short with Bitcoin CFDs


The main difference between Bitcoin and CFD currency pairs is that when trading Bitcoin currency pairs, you also need to pay attention to the price of the fiat currency (in our example, it will be the US dollar). Trading currency pairs is how two currencies interact, while with CFDs you only need to care about one asset.

It is important to remember that none of these methods allows you to directly own Bitcoin or withdraw it to your wallet. When we look at investing and trading cryptocurrencies, this is where the difference comes in. 

Trading allows you to profit from price fluctuations without owning the asset itself.


Let's sum up

The bitcoin rate does not depend on banks and financial regulators. However, you cannot call it stable either. The cost of this cryptocurrency (like many others) is capable of making large jumps both up and down.

 Both cryptocurrency and the payment system that uses it are called bitcoin.

 Researchers have identified several reasons for Bitcoin's popularity. Among them - the distrust of market participants in the global financial system and traditional currencies, the desire to hide their transactions, as well as the interest of users in electronic money and payment technologies.

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