One of the easiest ways to profit from the Bitcoin craze is by trading binary options. Here’s what you need to know.
There are two different ways to use your Bitcoins for binary options trading. The first is as a payment method at a standard binary options broker – you deposit your Bitcoins at the site and trade using the various assets. This is similar to playing at a Bitcoin casino – your Bitcoins are the currency and you trade/play in the same way as someone using USD or EUR as a deposit.
The second method is trading Bitcoin as an asset. Several brokers offer this option as one of their many assets, while others deal solely in Bitcoin trading.
Top Bitcoin Binary Options Sites:
|Accepts Bitcoin||Trade Bitcoin||Payout||Accepts US||Regulated|
What are Binary Options
Also called digital options, a binary option is essentially a bet on whether a particular asset will increase or decrease in price. This is always for a specified time frame e.g. the next hour. Unlike forex it doesn’t matter how much the prices changes, it’s only the direction that counts. Assets available include stocks, currencies, commodities and indices. In order to trade all you need to do is:
- Pick the asset e.g. Apple
- Choose an amount e.g. $5
- Choose time frame e.g. 1 hour
- Set direction e.g. Increase
At the end of the hour if the price of Apple is higher, you win! Simple. Payouts usually range from 75% to 95%, meaning you get your money plus the payout percentage when you win. Losing trades usually return a nominal payout such as 10% or 15%.
Not all brokers accept Bitcoin as a payment method, so if you want to fund your account using cryptocurrency, check first. There are 2 main types of Bitcoin binary options platforms today:
- Options platforms that allow trading on Bitcoin
- Bitcoin only platforms
Personally I prefer the traditional platforms for trading as they generally have more advanced tools and support, as well as other assets. But here’s the summary of important information for both kinds.
More Great Bitcoin Binary Options Sites
Are Binary Options Legitimate?
There are hundreds and maybe even thousands of blogs and websites dedicated to this question. The truth is that binary options are a legal financial instrument. However, there are many different brokers out there that offer different kinds of binary option contracts. This means that there is a wide range of sites that offer different kinds of services under the binary options banner. Since money transfers over the internet became readily available to anyone, and they can be done with ease, consumers must do their due diligence before they transfer money to scammers that pose as legitimate brokers.
Given that most consumers do not conduct proper research before they open and fund an account with a binary options broker, many have fallen victim to the scam brokers out there. Every person who engages in binary options trading must be aware of the fact that financial entities in an overwhelming majority of cases, must be regulated by a financial regulator in order to provide financial services. Traders looking to make an investment via binary options, must make sure they deposit their funds with a regulated and trustworthy broker.
Readers will be able to see on the tables above, which of the brokers that accept bitcoin are regulated. Those brokers that are not regulated, are either currently going through regulatory certifications, or are selling their services without any regulatory oversight. Those brokers that continue offering binary options without being regulated could well be legitimate brokers, but potential traders must understand the structure under which they enable binary options trading. Some might be akin to gambling.
The answer to the question of whether binary options are legitimate or not, is thus clear. They are a legitimate financial instrument that many investors use to profit. Nevertheless many brokers offer different kinds of services under the name of binary options. Some of the brokers out there even use binary options as a scheme to scam honest people out of their money. To avoid being scammed, you must understand which kind of broker you are looking for and make sure that its reputation is well established.