The price of bitcoin has nearly tripled in 2017, and headlines about huge daily moves in the bitcoin market can’t help but pique the interest of most traders. Unfortunately, at this point in time, trading bitcoin directly can be a bit of a pain. For traders starting from scratch, here are four ways to trade bitcoin.
Coinbase is a cryptocurrency exchange and trading platform that allows customers to trade bitcoin directly. Coinbase even offers margin trading for traders who qualify under the Commodity Exchange Act. These qualifications are geared more toward institutional investors than small retail traders. Requirements include at least $5,000,000 in discretionary investments for individuals.
Related Link: Battle Of The Cryptos: Bitcoin Vs. Ethereum
Coinbase is such a popular platform for bitcoin trading that the exchange had two outages in recent weeks due to extremely high trading volume.
2. Bitcoin ETFs
Two proposals to launch bitcoin ETFs, including the Winklevoss ETF (COIN), were rejected by the Securities and Exchange Commission earlier this year on concerns over lack of regulation. However, in April the SEC agreed to reconsider the rejection and opened the door for public comments on the original rejection.
Until a bitcoin ETF is approved for listing on a major exchange, traders can use Grayscale Investments’ Bitcoin Investment Trust (OTC: GBTC), which trades on the OTC Market. The ARK ETF Trust (NYSE: ARKW) is a NYSE-listed ETF that invests in GBTC and provides a path for bitcoin traders who don’t have access to the OTC market.
3. Bitcoin Options
In May, bitcoin options exchange LedgerX raised $11.4 million in funding to follow-through with its plan to operate a regulated cryptocurrency exchange and clearing house. Until LedgerX and other bitcoin options trading platforms gain regulatory approval in the U.S., investors can trade bitcoin options on offshore exchanges that come along with all the associated risks of not being covered by U.S. regulatory laws.
4. Bitcoin Stocks
There are a handful of companies that are invested or involved with bitcoin or the cryptocurrency’s blockchain technology. These stocks come with their own risks and will have a looser correlation to bitcoin price movements than trading the cryptocurrency directly.
Global Arena Holding Inc (OTC: GAHC) is a holding company with exposure to blockchain crypto technology. BITCOIN SERVICES I COM USD0.001 (OTC: BTSC) is a provider of bitcoin escrow services. Connexus Corp (OTC: CNXS) operates bitcoin ATMs that allow customers to exchange currency for bitcoin.
Of course, none of these stocks are listed on major exchanges, all three trade for under $0.10 per share, and all three have market caps below $10 million, making them extremely speculative plays.
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