Bitcoin Forex Trading – the Ultimate Guide
There are a number of reasons a trader might prefer trading Forex – or any of the mainstream asset classes for that matter – using bitcoin rather than fiat as a base currency.
For those holding a large percentage of wealth in cryptocurrencies, these markets allow for diversification into different instruments – or hedging against cryptocurrency market fluctuations – without needing to move into fiat payment channels.
If you are looking for cryptocurrency derivatives – leverage on bitcoin, etc – you are in the wrong place. Have a look at the best bitcoin futures exchanges, or compare the different derivatives platforms.
Forex Broker Comparison
We compare four brokers who, after a pretty thorough examination of the market, we have determined to be the most important providers of mainstream asset classes to the cryptocurrency public. There are a number of tables below which compare important considerations like spreads, leverages offered, and swaps, and we briefly outline each of the brokerages.
| 1Broker | SimpleFX | FXChoice | WhaleClub | |
|---|---|---|---|---|
| US Accepted? | Yes | No | Yes | Yes |
| Deposit Currencies | Bitcoin | Bitcoin, Dash, Litecoin, Fiat | Bitcoin, all major fiat | Bitcoin, Dash |
Spreads on the most Popular Products
| Instruments | 1Broker | WhaleClub | SimpleFX | FXChoice |
|---|---|---|---|---|
| eurusd | .0001 | .0002 | .00009 | .00024 |
| usdjpy | .01 | .03 | .01 | .017 |
| gbpusd | .0002 | .0002 | .00012 | .00025 |
| audusd | .0001 | .0009 | .00007 | .0002 |
| gold | 0.6 | 0.9 | .041 | 0.53 |
| silver | .02 | .04 | .031 | 0.23 |
| oil | .07 | .2 | 0.6 | .05 |
| FTSE100 | 1.4 | 2 | 0.8 | Na |
| DJIA | 2 | Na | 3 | Na |
| NIKKEI 225 | 6 | 20 | 6 | Na |
| Visit Broker | Visit 1broker | Visit Whaleclub | Visit SimpleFX | Visit FXChoice |
*classic account. If you are trading large positions it might be economical to choose the pro account, which offers tighter spreads + a commission.
Swap Rates
| Instruments | 1Broker (long, short) | Whaleclub | SimpleFX (in pts) | FXChoice |
|---|---|---|---|---|
| eurusd | l: .0154%; s: .0154% | .05% | l:-6.876; s: 3.015 | l: -.702; s: .413 |
| usdjpy | l: .0154%; s: .0154% | .05% | l: .555; s: -5232 | l: .164; s: -.546 |
| gbpusd | l: .0154%; s: .0154% | .05% | l: -5.21; s: .3321 | l: -581; s: .305 |
| audusd | l: .0154%; s: .0154% | .05% | l: .505; s: -3.38 | l: .045; s: -.15 |
| gold | l: .0204%; s: .0077% | .07% | l: -6.85; s: -.88 | l: -5.29; s: 3.099 |
| silver | l: .0204%; s: .0077% | .07% | l: -.596; s:-.505 | l: -.071; s: .042 |
| oil | l: .0204%; s: .0077% | .87% | l: -1.73; s: 1.003 | No charge |
| FTSE100 | l: .02%; s: .0077% | .07% | l:-5.054; s: -3.775 | Na |
| DJIA | l: .02%; s: .0077% | Na | l: -1.31; s: -.695 | Na |
| Nikkei 225 | l: .02%; s: .0077% | .07% | l: -.7823; s: -.622 | Na |
Please note – Unlike the other brokers compared above, 1broker does not charge swaps on weekends nor does it triple charge swaps on Wednesday. Note also that 1broker charges a swap fee to both directions of a trade, making it more of a premium rather than a traditional swap. This will benefit some, as the rates are low, and be to the detriment of others. Whaleclub has the same practice, but with one standard (higher fee).
SimpleFX has expressed their swap rates in points in order to make everyone’s life difficult (hope the irony is not lost). Each point has a different value, depending on the particular pair being traded. However, suffice it to say, after the math is all said and done, the swap rates are generally close to the lowest, if not the lowest, in the market.
Leverages Offered
| Instrument | 1broker | WhaleClub | SimpleFX | FXChoice |
|---|---|---|---|---|
| eurusd | 200:1 | 222:1 | 100:1 | 100:1 |
| usdjpy | 200:1 | 222:1 | 100:1 | 100:1 |
| gbpusd | 100:1 | 222:1 | 100:1 | 100:1 |
| audusd | 100:1 | 222:1 | 100:1 | 100:1 |
| gold | 50:1 | 20:1 | 50:1 | 100:1 |
| silver | 50:1 | 20:1 | 50:1 | 100:1 |
| oil | 50:1 | 20:1 | 25:1 | 100:1 |
| FTSE100 | 20:1 | 10:1 | 20:1 | Na |
| DJIA | 20:1 | Na | 20:1 | Na |
| NIKKEI 225 | 20:1 | 10:1 | 20:1 | Na |
SimpleFX offers different leverages depending on the equity in a trading account. The leverages quoted above are for the standard accounts.
Whis is better: 1broker or Simplefx?
Under most of the criteria compared above, 1broker and simplefx have differentiated themselves as the two leading platforms for trading mainstream asset classes with cryptocurrencies. The spreads are both the lowest and similar, as are swaps; depending on preferred instrument a trader might choose one broker over the other. Leverages are in line, though again there are some differences that might be meaningful to some. For US-traders in particular the decision is an easy one, as only 1broker will allow account opening.
SimpleFX has a much more sophisticated platform offering more instruments for trade, and has a trading license with metatrader 4 for its traders. 1broker has an extremely simple trading interface – many would likely use 1broker only as a trade execution platform, with analysis done externally.
1broker also has a very popular social trading network. Successful traders attract followers. Followers auto-copy these traders, designating an amount of bitcoin to invest in each and every trade made. The trader benefits from a percentage of their followers’ trading fees, whilst the followers, at least theoretically, benefit from following successful traders.
In terms of margin calls – simplefx follows a pretty standard format. A margin call takes place when account equity hits 50% of the margin requirement; forced closure takes place when account equity hits 30%. Note that this is based on the entire portfolio, not position by position, and stop outs close the largest losing position automatically, until the position is back to above 50% margin.
1broker is a bit of an outlier in the market, automatically assigning a forced stop-loss to minimize exposure. Traders can use a calculator prior to trading which shows where a stop loss would be set on any particular position; as a rule of thumb leverages of 100:1 usually force-close positions at a loss of 78%; if you are trading with no leverage, the stop loss would be executed at ~95% down.
Whaleclub – go-to site for US traders?
There are a few reasons to prefer Whaleclub to any of the other brokerages on this page. Like 1broker, customers enjoy total anonymity, and their are no geographical limitations placed on traders. Unlike 1broker, Whaleclub is most well known for it’s leveraged cryptocurrency trading, one of the few places open to US clientele. However, for those primarily in the market for mainstream asset classes, spreads and financing rates are a bit higher than whaleclub, though leverages offered on forex are extremely high, and they do offer a wide variety of bonds and individual stock CFDs that might be of interest.
FXChoice – Big selection, but you got to go through KYC
One big advantage of FX Choice , again not as relevant here, is that there is no swap charged on btcusd overnight. They also offer the largest array of asset classes and instruments, being a mainstream broker that decided to accept bitcoin payments, not vice versa as is the case with the rest of the brokers reviewed. This means, however, that a full kyc is required to trade, which crypto-traders will find burdensome.