How to Trade Bitcoin CFDs?

What Is Bitcoin CFD?

Using CFDs, investors can make price predictions about assets without holding them. With Bitcoin CFDs, you may speculate on the price without buying real coins. Because you can profit from rising and decreasing prices, this gives you more flexibility and trading chances. If you do not know How to Trade Bitcoin CFDs, we recommend doing more research on our website.

Although it is possible to purchase and hold actual Bitcoins, there are several significant benefits to trading Bitcoin as a financial instrument as opposed to doing so. Among these benefits are:

• Instantaneous exposure to changes in Bitcoin’s price, with the option to trade long or short without requiring ownership of the underlying currency.
• Implementing long-term and short-term trading plans and hedging any current Bitcoin holdings is simple.
• Control Bitcoin investments with margin and leverage to use account equity effectively.
• Use trade management strategies, such as profit limit orders and stop losses, on Bitcoin positions that are not achievable with Bitcoin holdings alone.

CFD Trading vs. Spot and Futures Trading

CFD vs. Spot Trading

1. Leverage: Leverage is a critical distinction between trading CFDs and cryptocurrency spot trading. Since traders can trade several times the quantity of their preferred cryptocurrency than they could if they were to purchase it outright, the potential benefits of leverage are evident. On the other hand, leverage is not available in cryptocurrency spot trading; thus, your only opportunity to earn money is from price increases. You have complete control of the asset you exchange in cryptocurrency spot trading so that you can use it for other things. However, it should be remembered that any possible losses could also rise as leverage increases.
2. Short—and Long-Term Trading: Bitcoin CFDs are typically more popular for short-term transactions because maintaining a position overnight normally entails financing costs. Because of this, using cryptocurrency CFDs for long-term trades may become less profitable. On the other hand, you can trade cryptocurrencies using an exchange for any length of time and any strategy, including short-term and long-term trades.
3. Interest Swap Fees: Spot trading doesn’t charge for holding positions for as long as you wish, unlike crypto CFDs, which require interest swap costs if you keep holdings overnight.

CFD vs. Futures Trading

Where to Trade Crypto CFD?

Because of its commitment to social trading and copy trading and the variety of bitcoin assets it provides for trading, eToro is the most fantastic Bitcoin CFD trading platform. With CEX.io, you may trade CFDs on all cryptocurrencies and stocks, foreign exchange, and precious metals. AXI provides commission-free standard accounts, no brokerage costs, and cryptocurrency CFDs with a margin as low as 1%. With Bitpanda Leverage, investors may engage in extended or short-crypto CFD trading and speculate on the value of particular cryptocurrencies without actually purchasing them. AvaTrade provides various financial products, such as options, crypto CFDs, and exchange-traded funds. We recommend eToro as the best Bitcoin CFD provider for most users. 

How to Trade Bitcoin CFDs on eToro?

eToro is an excellent option for trading crypto CFDs. The exchange provides 74 different crypto CFDs, which is an outstanding feature. You must follow these steps to commit investment in Bitcoin CFDs on this exchange:

Sign up and Create an Account: Click the “Join Now” or “Trade Now” option on the eToro.

Verify Your Account: You must enter your personal ID information and submit your request. Your account will be verified soon.

Deposit Fund to Your Account: Traders must transfer funds as trading collateral as soon as their account is opened. eToro supports numerous payment options, including bank transfers, credit cards, and e-wallets like Neteller.

Access WebTrader Platform: eToro offers access to financial markets through two platforms. WebTrader is a trading software that runs in the browser and offers unique tools and indications. It is a mobile app that allows trading with iOS and Android smartphones but has fewer indications than WebTrader.

Set Trade Parameters: Decide to Buy or sell Bitcoin, establish the trade size, and determine the leverage. It is noteworthy that Bitcoin CFD on eToro is available for Sell orders.

Open the Trade: Now, you can open your position by clicking the Buy or Short button. You can monitor your position from the Portfolio tab on the right side of the screen.