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Bitcoin Trading

Bitcoin CFDs

Take advantage of bitcoin (BTC) price movements by trading bitcoin CFDs with ADS Securities.

Ready to start trading?

Opening an account with ADS Securities is simple and secure. You have the option to open a live account via our secure client portal or try our FREE Demo Account.

What is Bitcoin?

Bitcoin is a cryptocurrency created in 2009 by an anonymous person or group known as Satoshi Nakamoto. It was designed with the aim of replacing currencies, with the objective of reducing transaction fees and transfer delays.

Many traders still see bitcoin as an investment outlet like a precious metal, rather than a traditional currency. Much like commodities and precious metals, bitcoin isn’t centrally regulated, and it is largely unaffected by changes in monetary policy. Instead, it faces other distinct challenges and influences.

How Does it Work?

In order to understand how bitcoin works, it is important to understand two fundamental concepts: blockchain and mining.

Blockchain is a shared digital ledger that logs all bitcoin transactions throughout history. Anyone can access the blockchain at any time, but the computing power of the majority of the network is required to alter it. This means that there’s no single point of failure within the blockchain and it cannot be retrospectively amended.

Mining is the process by which new coins are gained. As complex algorithms are solved, new units of bitcoin are released. This is an ongoing task and mining has now become big business, particularly as the algorithms have become harder to solve as more coins have been mined.

Once mined bitcoins are in circulation, they can be exchanged and stored in digital ‘wallets’. If mined bitcoins are lost, then they can never be recovered. It is estimated that around 25% of all mined bitcoins have been lost.

What Factors make Bitcoin’s Price Move?

Bitcoin is highly volatile and can experience sharp price movements relating to factors including:

Regulation: As mentioned, bitcoin is not regulated by governments or central banks. However, the regulatory landscape may change, and this could potentially alter the value of the investment if regulation erodes some of the benefits that sets bitcoin apart from physical currencies.

Security: Losses cannot currently be reimbursed, and transactions are not foolproof. This can lead to stories of wallets being stolen or lost, which can cause bitcoin’s price to fall sharply.

Supply: There’s a finite number of bitcoins, and all are expected to be mined by 2040.

Popularity: Although bitcoin is the most popular of all cryptocurrencies, most major companies and consumers are still some way away from adopting it.

Forks: A fork occurs when a blockchain splits into two, creating two separate records of data. These can be resolved without disruption, but this isn’t always possible. The most famous example of this is bitcoin cash, which caused a ‘hard fork’, dividing miners too.

Why Trade Bitcoin CFDs?

When you trade bitcoin CFDs with ADS Securities, you never take physical ownership of the cryptocurrency and instead you speculate on BTC’s underlying price. A CFD still enables you to trade a contract based on prices in the underlying market, so you have the same exposure to market movements as you would if you bought the cryptocurrency.

This means that you don’t need to interact directly with an exchange, which has several advantages. For example, many of these exchanges lack proper regulation meaning that the risk to investors is extremely high in terms of default or fraud. Accounts themselves can also take days to acquire and may be restricted initially.

With ADS Securities, you can go long or short on bitcoin CFDs. Open an account to start trading bitcoin CFDs today. You can also try our interactive CFDs trading courses, which cover everything from basic concepts to advanced skills.

Cryptocurrencies, including, without limitation, Bitcoin and Ethereum, are subject to a very high degree of uncertainty and price volatility. Investors in cryptocurrency CFDs are exposed to a number of additional risks not present in more traditional investments. These risks are set out in our Cryptocurrency CFDs – Additional Risk Warnings & Conditions, you should note that this is not an exhaustive list.
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