Vantage FX announced this month the addition of Bitcoin cryptocurrency to their MetaTrader 4 trading platform. In doing so, they have become the latest Australian regulated foreign exchange broker to add cryptocurrency trading to their clients.
We do realise this is the third post in a row we have done on cryptocurrencies. this is is a sign of increasing interest and popularity of the Crypto markets. However, we always aim to bring the latest news and offerings from the brokers listed at Online Brokers Australia, and hence why the last few posts have focused on the Bitcoin market.
Trade Bitcoin on MetaTrader 4
Many traders are turning to Bitcoin trading through a licensed Forex broker, rather than opening an actual bitcoin account. This is because the actual cryptocurrency account opening process, and executing a trade through 1 of the huge selection of cryptocurrencies exchanges can be difficult to understand and very time consuming. By choosing to trade Bitcoin with Vantage FX broker, you do not have to open a separate bitcoin account and can view bitcoin prices direct on the Vantage FX charts (rather than needing 3rd party charts). Simply fund your MT4 trading account and trade Bitcoin easily in one account with currency pairs, global indices or commodities markets.
By trading the Bitcoin CFD BTC/USD means that the trader will not be able to take delivery of the bitcoins, unlike in a Bitcoin exchange where they are delivered to the trader’s wallet.
Vantage FX bitcoin traders are able to go long, as well as short on the cryptocurrency pair BTC/USD. This means traders are not constrained in their bitcoin trading to only buy and hold trading strategies. The BTCUSD (Bitcoin CFD) leverage is initially set at 1:1.
The 1:1 leverage is also by design. David Billy from Vantage FX confirmed as a risk averse foreign exchange broker, VantageFX puts the safety of clients funds, as well as the company, at the forefront of everything they do.
Crypto markets are extremely volatile and so it is a conscious decision of theirs not to offer high leverage on Bitcoin. As always, we applaud brokerage firms that put the security of the brokerage firm and their client funds at the forefront of all decisions!
Vantage FX Bitcoin Specifications
In offering Bitcoin (Bitcoin to USD), Vantage FX joins Pepperstone, AvaTrade, Plus500 and others offering Bitcoin trading to Australian traders. Read our full Vantage FX review for all ECN / STP and DMA CFDs offered by this Australian regulated broker.
Cryptocurrency as an investment class hit a milestone in June (2017). The combined market capitalization (market cap), in Australian dollar terms, surpassed $100 billion! While bitcoin is the most popular and currently well known of all digital currencies, it is interesting to note that bitcoin, as at the end of June 2017, accounted for just over 44% (or around AUD 45 billion) of the total combined market cap of all cryptocurrencies.
You may now be scratching your head wondering if bitcoin makes up just over 44%, then what are the other digital currencies that heavily contribute to this combined $100+ billion AUD market cap? Below we have provided a list of cryptocurrencies by market cap (expressed in Australian dollars at the end of June 2017).
CryptoCurrency Market Capitalization Expressed in AUD
- Bitcoin (BTC) – $45 billion (44.25%)
- Ethereum (ETH) – $31 billion (30.48%)
- Ripple (XRP) – $12 billion (11.80%)
- Litecoin (LTC) – $2.2 billion (2.16%)
- Ethereum Classic (ETC) – $2 billion (1.97%)
- NEM (XEM) – $1.7 billion (1.67%)
- Dash (DASH) – $1.3 billion (1.28%)
- Other – $6.5 billion (6.39%)
With the increased popularity and commentary on the cryptocurrency market, bitcoin in particular, we have noticed an increase in the number of CFD and Forex brokers either adding their first bitcoin product to the offerings (such as Pepperstone last week) or other brokers such as Plus500 which have recently added their fourth cryptocurrency CFD to their platforms.
Trading Cryptocurrencies with Contracts For Difference
Plus500 CFD service added Ripple (XRP) to their existing offerings in June 2017. Plus500 offer CFDs on the top 4 cryptocurrencies by marketcap. This allows traders to go either long or short on Plus500 Bitcoin, Ethereum, Litecoin and now Ripple XRP CFDs. Please keep in mind that Plus500 is providing contracts for difference (CFD) trading on the above digital currencies, which is leveraged and different to buying the currency outright.
If you currently own digital currency and wish to change to a different cryptocurrency please consider Changelly cryptocurrency exchange which has one of the most favourable rates.
Pepperstone is proud to announce their first addition of cryptocurrency to their offerings. From July 2017 Bitcoin can now be traded at Pepperstone Forex broker. Pepperstone Bitcoin trading is offered as a leveraged instrument against the US dollar (code “BTC/USD” in Pepperstone’s trading platforms).
Cryptocurrency is often referred to as the money of the future and it’s global popularity is certainly being displayed in the current BTC USD price chart, however please remember that past performance does not guarantee the future performance of any financial instrument, Bitcoin included!
What is Cryptocurrency?
A cryptocurrency is essentially digital money (digital currency) used as a medium of payment or exchange and protected using cryptography to control the creation of additional units of the currency and secure the transfer transactions. Source: Wikipedia – Cryptocurrency
What is Bitcoin?
Satoshi Nakamoto is the inventor of the first, and currently most well-known cryptocurrency called Bitcoin (BTC). Bitcoin became the first decentralized cryptocurrency (a decentralized digital cash system) in 2009, and since this time many alternative cryptocurrencies to Bitcoin have been created, and are commonly referred to as altcoins. Source: What is Cryptocurrency: Everything You Need To Know
The decentralized control, instead of a centralised banking system, is achieved via blockchain transactional database, acting as a distributed ledger.
We can delve deeper into the actual mechanics of Bitcoin in a future article, however for now we just wanted to provide a little context around the newest leveraged financial instrument being introduced by Pepperstone Forex broker.
Why Trade Bitcoin with Pepperstone?
- Traders can take advantage of Bitcoin’s large movements and volatility, without the need for an existing Bitcoin wallet or having to purchase actual Bitcoins;
- Bitcoin can be traded at Pepperstone with leverage up to 20:1;
- Receive institutional grade Bitcoin spreads & trade execution with no commission fees charged;
- Access BTC to USD (“BTC/USD”) easily from all of Pepperstone’s trading platforms; and
- Traders can hedge Bitcoin on a single Pepperstone account.
Risks of Trading Bitcoin
As with any leveraged trading, there is always risk to your capital as the the very nature of leverage means both the profits and the losses are magnified. Bitcoin is currently (2017) experiencing large volatility and movement in prices. While traders generally look for volatility to experience quicker price movement, if you are on the wrong side of the move, combined with leverage, this means not only is your capital is at risk but you can loose more than you have deposited.
Trading Bitcoin should therefore only be considered by experienced traders, who understand the risks involved and carefully read any PDS (product disclosure statement) and/or other offer documents provided by the bitcoin trading broker, in this case by leading Australian forex broker, Pepperstone Australia.
We are already in 2015 which will be an exciting year for Best Online Brokers Australia.
We launched this new web site in December 2014 and many thanks to those already following our new web site, and on Twitter and Facebook.
We’ll have some fantastic new brokers, offers, trading instruments and much more coming in Q1 2015.
In the meantime I’ll leave you with a couple of great quotes to consider…
“Learn from yesterday, live for today, hope for tomorrow”
~~ Albert Einstein
“The bad news is time flies. The good news is you’re the pilot”
~~ Michael Altshuler
Wishing everyone a very happy, healthy and prosperous 2015 🙂
Australian customers of Interactive Brokers (NASDAQ:IBKR) will be reimbursed with the fees and commissions paid to the brokerage for retail margin loans during the period between July 2010 and August 2013.
The Australian Securities and Investments Commission (ASIC) has issued an announcement outlining that Interactive Brokers is preparing to refund more than 3,000 of its Australian customers with the fees and commissions paid to the broker for retail margin loans.
Interactive Brokers Australia
The company will refund around $1.5 million to its customers, in addition to paying $100,000 to the Financial Rights Legal Centre, a community legal centre specialising in educating the Australian public on financial services matters.
Interactive Brokers has been engaged in a voluntary undertaking with ASIC since August 2013 when it agreed not to issue nor increase any new or existing margin loans. The company has also wound down its facilities and is currently not offering margin lending facilities to ‘natural person’ clients in Australia.
ASIC Regulation of Margin Lending
The regulation of margin lending began on January 1st, 2010, with the introduction of the Corporations Legislation Amendment Act, which required issuers of margin lending to be regulated by ASIC through an Australian financial services licence (AFSL). In addition, under the Australian regulatory environment, every client’s creditworthiness has to match his risk profile.
PricewaterhouseCoopers will be reporting on its verification of the refund process to ASIC and IB.
– Read the full ASIC announcement at: http://asic.gov.au/about-asic/media-centre/find-a-media-release/2014-releases/14-336mr-asic-investigation-leads-to-interactive-brokers-refunding-15-million-to-australian-customers/
Following an ASIC surveillance, Calibre Investments Pty Ltd will implement changes to the way it offers FX services to retail clients.
The move is part of ASIC’s crackdown on the FX industry which has resulted in a number of outcomes recently.
ASIC’s surveillance of Calibre, which provides managed discretionary account (MDA) services, raised concerns over the business’s compliance and risk frameworks, their advice to clients and their supervision of representatives.
In response, Calibre has appointed an independent consultant to review its MDA policies and procedures. The independent consultant will report back to ASIC.
The group will also provide new statements of advice to all MDA clients and enhance its compliance department.
Source: ASIC Monday 8 December 2014