The original purpose of Bitcoin was to serve as a digitally encrypted currency that could be used as payment for goods and services without being under the scrutiny of any government or central bank.

But Bitcoin has gone well beyond its original purpose to where it can now be traded as a speculative financial instrument in as simple and straightforward a manner as trading any traditional currency. Up next, we dive into the meaning of trading Bitcoin.

The creator of Bitcoin designed the cryptocurrency to be capped at a total mined quantity of 21 million Bitcoins, in perpetuity. As of July 2023, there are close to 19.45 million in circulation (Source: CoinMarketCap). The remaining 2.5 million have not yet been mined.

This characteristic and perception of scarcity have helped lead to Bitcoin’s massive rise in value since its inception, particularly within the past year, as traders and investors have rushed to take part in buying and selling the cryptocurrency.

Trading Bitcoin CFDs

The cryptocurrency market has experienced an unprecedented boom in recent years, and Bitcoin has been the main protagonist of this financial revolution. As more investors seek to participate in the world of cryptocurrencies, trading Bitcoin as CFDs has become an attractive and accessible option.

What is Bitcoin CFD?

CFDs are a type of financial instrument that allows investors to speculate on the price of an asset without having to physically own it. In the case of Bitcoin CFDs, you can go long or short on the price of Bitcoin without having to purchase the actual cryptocurrency. This provides greater flexibility and trading opportunities as you can profit from both rising and falling prices.

While actual Bitcoins can certainly be bought and held, there are some major advantages to trading Bitcoin as a financial instrument rather than simply buying and owning the cryptocurrency. Some of these advantages include:

• Immediate exposure to Bitcoin price movements with the ability to trade long or short, without having to hold the underlying Bitcoins
• Easily execute both short-term and long-term trading strategies, or hedge any existing Bitcoin holdings
• Use margin and leverage to control Bitcoin positions, allowing efficient use of account equity
• Employ stop losses, profit limit orders, and other trade management techniques on Bitcoin positions that are just not possible when simply holding Bitcoins

Benefits of trading Bitcoin CFDs with tradefd.com:

• Access to a growing market: The cryptocurrency market, led by Bitcoin, has shown spectacular growth in recent years. With tradefd.com, you can participate in this ever-evolving market and take advantage of its fluctuations for potential profit.
• 24-hour trading: Unlike traditional markets that close during certain hours of the day, the cryptocurrency market at tradefd.com is active 24 hours a day, 5 days a week.
• Leverage: tradefd.com offers the option to trade with leverage, which means you can control a larger position with a smaller initial investment. However, it is important to note that leverage also increases risk, so it is essential to manage your exposure carefully.
• Advanced Trading Platforms: tradefd.com provides advanced, easy-to-use trading platforms that allows you to analyse the market, access charting tools, and execute your trades efficiently and quickly.

As part of the tradefd.com trading academy, you will find educational resources on trading Bitcoin CFDs, including tutorials, market analysis and webinars, to help you improve your skills and knowledge in this exciting market.

Up next, learn more about the difference between trading vs owning Bitcoin.