Bitcoin CFD Trading
The financial products offered by the companies carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Bitcoin Trading Softwares
It is common to use leverage trading. This means you take a position more worth than your actual investment. To do this, traders borrow money temporary. All this is handled automatic by the trading company. The trader pays daily interest on the borrowed money. With Bitfinex this money can come from other traders.
Leverage trading risks
This is high risk since you can take a position worth $100.000 for $10.000. This also means you can loose more than you have invested. All companies have very well functioned safety functions for this. The companies also take a risk if you lose more than you have on your account.
CFD trading, contract for difference trading, is a contract between two parties. CFD trading consist of a buyer and a seller. They agree that the seller will pay the buyer the difference between the current value of an asset and its value at contract time. If the difference is negative the buyer pays instead. CFDs are financial derivatives that allow traders to speculate in prices moving up (long positions) and prices moving down (short positions).
Bitcoin Social Trading
Bitcoin Social Trading is available via Etoro. Social Trading means there are many community-based trading tools. For example, you can follow and see other traders performance and you can even copy other traders performance. Read more about Bitcoin Social Trading in our blog post.
Go short on Crypto
At all presented trading platforms it is possible to go short on Bitcoin. To go short means that you borrow an asset (for example Bitcoin) from a person or institution that actually holds real Bitcoin. You borrow them and sell them. Since you speculate on a falling price you want to buy back the borrowed asset at a lower price. If you succeed to buy the asset back at a lower price your win is the difference. Read more about how to short Bitcoin in our blog post.
There is many trading platforms for Bitcoin but also many platforms have started to offer altcoin trading. Many platforms are opening for Ethereum trading and the liquidity is very good in the Ethereum markets. Also, trading platforms for Ripple and Litecoin trading are coming up. Read more specific about Ethereum trading platforms in our blog post, best Ethereum trading platform 2018.
Tax on Bitcoin Profit
You should pay tax on Bitcoin profit. There are different laws for different countries. However, I cam across BitcoinTaxes which is software that summarizes all profits and losses from all major exchanges. Read more about How to pay tax using BitcoinTaxes.