Article updated November 22nd to reflect Bitcoin’s new price rise
Owning or trading bitcoin might seem like a dream for most people, especially since the cryptocurrency reached an unprecedented high – breaking through the $8000 level today on November 20th and $8300 on November 22nd. Each time it inches up a little more – another person out there mutters “If only I had…”.
What if I told you there are tons of ways to trade bitcoin. What if I told you that there is a way to increase the size of your trade, without the need to increase your initial investment? Allow me to introduce you to CFD bitcoin trading, which you might not be familiar with, but it comes with a lot of robust features. Trading CFD bitcoin allows anyone to buy or sell with a predetermined price to exit the trade, which can help them manage their profit and risk (known as stop-loss and take-profit). It also allows traders to use leverage. For most people this is one of the biggest appeals of trading CFDs.
What is leverage you ask? Leverage is exactly what the name indicates – it leverages (A.K.A. increases) your trade, like a lever increases your strength – this means someone can enter a trade that is worth a little more than their initial investment. To keep the example simple; if a person has 1:10 leverage – which is what easyMarkets offers on bitcoin with an initial investment of $830 (these are the indicative prices at the time of writing this article) someone could purchase one bitcoin worth ten times their initial investment: $8300 (the indicative price at the time of writing this article). Of course, caution is necessary when trading, markets move in both directions.
In a completely hypothetical scenario, with a 1:10 leverage you could have purchased one bitcoin worth $2730 back in August for $273. Today, in ideal circumstances, your $273 dollars would be worth $8300 – a profit of $5570. If we go back even further, not that far though – 2010 10,000 bitcoin was valued at around $30 dollars (this is practically common knowledge due to the infamous Bitcoin Pizza Day), today that same amount would be worth around a staggering $83,000,000.