Bitcoin and Binary Options Trading

Binary options have become increasingly popular over the past 2 years. This type of trading is desirable among new traders because they do not need to buy anything, but only predict whether the asset will move up or down in a certain period of time. These trades take place in short time frames (30 seconds, 1 minute, 5 minutes) but can be months. If the trader predicts wrongly, he will obviously lose his money. If the trader was correct in his prediction, he will receive an 80-85% payout, depending on the broker.

Binary options are sometimes called “all or nothing options”, “digital options” or “fixed return options” (FROs), which are traded on the American Stock Exchange.

Bitcoin (BTC) is a digital currency that is created and stored electronically and nobody controls it. “Bitcoin is an online payment system invented by Satoshi Nakamoto, who published his invention in 2008 and released it as open source software in 2009. The system is peer-to-peer; users can transact directly without the need for an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called a blockchain. The ledger uses its own unit of account, also called bitcoin. The system operates without a central repository or single administrator, prompting the US Treasury Department to categorize it as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency…”

Bitcoin as a currency in binary options trading

Bitcoin is now a widely used currency and many trading platforms accept it as a payment method for their customers’ trading deposits. Using Bitcoin as a currency has many advantages. The first advantage is “the fact that the transaction cost is the lowest among all forms of online payment. This is the reason why Bitcoin was created in the first place, to reduce the cost of online transaction. Since there is no central authority managing bitcoin, no service fee is charged when receiving or transmitting a payment.” Another reason traders use Bitcoin as a currency is that Bitcoin itself can be traded and they can earn additional Bitcoins that way.

“As all trading transactions are denominated in Bitcoin, the trader can hedge against the fluctuations of this cryptocurrency while earning more from it through trading profits.”

Bitcoin as a Commodity in Binary Options Trading

With the recent popularity of Bitcoin and its acceptance as a currency, many binary options platforms have started using Bitcoin as one of the trading currencies. so as an asset. Stockbrokers see value in trading BTC against fixed currencies, mainly against the US dollar.

There are 2 main types of Bitcoin binary options platforms today:

  • First Generation Brokers – Binary options platforms that allow Bitcoin trading

  • Second Generation Brokers – Platforms that offer both Bitcoin financing and Bitcoin trading

First generation brokers – brokers that offer bitcoin trading:

  • Coinut – only Bitcoin options exchange platform; programmed as a stable and distributed Linux operating system

  • BTClevels – Bitcoin Binary Options Trading Platform; with or without registration, hassle free

  • 24 Options – one of the first brokers to start offering BTC as an asset

Second generation brokers – Brokers that offer Bitcoin financing and trading:

  • Traderush Binary Platform – Accepts BTC Deposits

  • Nadex Trading Platform – accepts BTC funding and allows BTC trading; offers limited risk, short-term trading, transparency and a fully regulated market

  • Satoshi Options Trading Platform – accepts BTC funding and allows BTC trading; does not require account registration or personal data. Payouts are almost instant and the service is accessible from anywhere in the world

  • BTCOracle Platform – Bitcoin Only Platform – Enables BTC funding and trading, offering few wallet options and full transparency

  • Bitstamp Platform – As above, BTC only platform – allows BTC trading and funding but requires login

  • Bitcoin Wisdom – allows trading of 3 digital currencies, bitcoin, litecoin, altcoins against other flat currencies and requires login

  • Beast Option – allows BTC funding and Bitcoin and Litecoin trading; ensures fair pricing regardless of market fluctuations

When choosing a Bitcoin broker, it is important to check their terms and conditions, paying particular attention to whether their Bitcoin assets are stored in “Deep Cold Storage”. This means that Bitcoins are insured and stored offline where they are not susceptible to hackers.