Bitcoin and Binary Options
This article will explain everything you need to know about binary options and Bitcoin.
We have decided to write about this because there are many sites with confusing information on what Bitcoin is and how it applies to binary options.
(We already wrote about this cryptocurrency a year ago, warning potential users about Bitcoin wallet security and online storage.)
Few words about Bitcoin
Bitcoin is a peer-to-peer currency based entirely on cryptography. (Read the white paper here) The most interesting part of Bitcoin is that it can be used safely without a central and controlling authority.
Payments can be sent worldwide in a matter of few minutes and all transactions are written onto a ledger called the blockchain.
The entire blockchain and Bitcoin transactions are supported by worldwide mining activity done with computing power.
Miners support the blockchain and the transactions on the network and generate new Bitcoins as a reward.
Anyone with some computing power can become a miner, however it is increasingly more difficult to mine new Bitcoins.
Unlike any fiat currency which can be inflated and multiplied by the government, there is a finite amount of Bitcoins that can be mined. It is only 21 million and the more Bitcoins are mined, the more difficult and energy-consuming mining becomes.
This graph from Blockchain.info tracks all the mined Bitcoins in the world. On November 9, 2017 it showed well over 16 million Bitcoins which have already been mined.
Although 21 million seems not too far away, due to the expanding mining difficulty present in the system, and the halving of Bitcoin reward every 210,000 blocks, experts predict that all Bitcoins will be mined by the year 2140. (Wikipedia)
However, estimates can change with the arrival of cheaper quantum computers in the future, more efficient AI systems, and new raw materials discovered on other planets. Simply put, a lot can happen in the next hundred years, especially in the technology sector.
How is Bitcoin relevant in Binary Options
Cryptocurrency, and especially Bitcoin, has exploded in the last few years and also more recently. Bitcoin is now worth over 7400 USD and its popularity is growing worldwide.
However, Bitcoin’s market cap at the time of writing this article is 125 billion which is still a lot smaller than Apple’s 900 billion, for example.
This shows that Bitcoin is still in its early stages and there is a lot of room for growth in the market. Most analysts predict the value of Bitcoin will keep rising as more people and institutions begin to accept and use it.
Some enthusiasts believe it can go as high as 1 million USD per Bitcoin, yet there also those who believe it will crash spectacularly.
Whether Bitcoin will crash or not, remains to be seen, but regardless of what will happen in the future, the fact is that Bitcoin is now accepted in many outlets as a money.
The financial sector is also warming up to this new phenomenon and many online Forex brokers now offer BTCUSD trading and Bitcoin deposits and withdrawals.
Trading Bitcoin on binary option platforms
We have still to come across a legitimate binary platform which would offer BTC/USD. It is possible that Bitcoin is considered too volatile to be included on binary platforms.
The only platform we could find to offer BTCUSD trading on binary options was Satoshioption. Unfortunately, the platform and it’s structure seem a bit dodgy. The fact that their website does not include a basic SSL (https) security protocol is a big warning sign. Security is very important when it comes to cryptocurrencies, basic website protection is only the start.
There are a few known-as-binary brokers that offer binary options and Bitcoin trading, but these two platforms are separate and Bitcoin trading is similar to Forex trading.
Some Forex brokers now also offer Bitcoin trading with a margin and many brokers are beginning to include the BTCUSD pair on their popular trading platforms, such as MetaTrader.
However, there are new, more specialized cryptocurrency exchanges and interesting trading platforms to choose from.
Whaleclub, for example, is one of the largest platforms which is run entirely on digital currency. Users can only use cryptocurrency for deposits and withdrawals and have access to Cryptocurrencies, Forex, Metals, Stocks and Bonds. The trading platform and charting application is also a lot more advanced and intuitive than on any binary options platform.
If you’re interested in trading Bitcoin (and other crypto) online, please visit Resources for the Bitcoin Trader.
Bitcoin for deposits and/or withdrawals
The most common use of Bitcoin in binary options could be for making deposits and withdrawals. However, this is still very rare and unfortunately at this stage we can not recommend any specific binary broker that accepts Bitcoin.
It is perhaps understandable that binary brokers don’t want to deal with cryptocurrencies as that may require building an additional layer of security and possibly additional permission from the supervising authority.
Binary options brokers sometimes struggle to prove their business is legitimate and to persuade the public that options are real investment instruments. Mixing binary options with cryptocurrencies might raise a few eyebrows by people who never had any exposure to cryptocurrencies and do not trust them.
Not including digital currency on binary platforms could be a strategic move. A temporary, protective attitude that will most likely change in the very near future.
However, as mentioned before, Bitcoin can be traded and used to deposit and withdraw money on Forex and cryptocurrency-dedicated platforms.
Warning! We have come across many websites that feature lists of binary brokers that accept Bitcoin, but none of the brokers listed actually offer cryptocurrency trading or deposits. So before signing up to one of the advertised brokers, make sure to check if they really do offer Bitcoin as a means of payment. The easiest way to check for this specific information is by looking at the FAQ section.
It is entirely possible to trade Bitcoin online using specialised cryptocurrency exchanges or traditional Forex brokers that have expanded their offer to include some of the main cryptos such as Bitcoin.
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