When you trade bitcoin CFDs, you never interact directly with an exchange. Instead, you trade on our buy and sell prices, which we source from a number of exchanges on your behalf. In order to take a position on bitcoin’s price, then, all you need is an IG trading account. Bitcoin exchanges work the same way as traditional exchanges, enabling investors to buy the cryptocurrency from or sell it to one another. But there are a number of advantages to cutting them out of the equation entirely:
They lack proper regulation, public records and the infrastructure needed to respond quickly to support requests
Their matching engines and servers are unreliable, which can result in the suspension of markets or reduced execution accuracy
They impose fees and restrictions on funding and withdrawing from your exchange account, while accounts themselves can take days to acquire
By trading bitcoin CFDs, you also gain significantly improved liquidity at your chosen touch price. When you buy and sell direct from the exchange, you generally have to accept multiple prices in order to complete your order.
While bitcoin’s volatility makes the cryptocurrency an attractive opportunity, it also makes it a particularly risky market to speculate on. Its price can shift significantly and suddenly – and since the bitcoin market operates around the clock, this is liable to happen any time of day. As a decentralised currency, bitcoin is free from many of the economic and political concerns which affect traditional currencies. But as a market still in its adolescence, there is a lot of uncertainty entirely unique to the cryptocurrency. Any one of the following factors could have a sudden and significant impact on its price, and as such you need to learn to navigate the risks they may open up.