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July 4, 2016

Buying Bitcoins is Easier with CFDs

With so much news recently about the cryptocurrency Bitcoin and its underlying technology, blockchain, there are many people, who are wondering just how, exactly, to buy Bitcoins. 

Bitcoins are available for purchase from exchanges or from other people selling them through various marketplaces, both online and in person. In some countries, local banks also carry them. The process can however be cumbersome and less than convenient because many sellers of Bitcoin are hesitant to accept payments by credit card or Paypal, due to worries that purchasers can easily just reverse the charges.   

This puts the seller at risk because with Bitcoin being an often volatile, new and unfamiliar commodity, it can be hard to prove to credit card companies or Paypal that something of value actually changed hands. 

One simple way to invest in or buy Bitcoins is via CFDs, or contracts for a difference, which are derivatives based on the market-value of Bitcoins or any other financial products, such as stocks or currencies.   

Many of the online retail trading and social trading platforms focused on forex and stocks that have been launched in recent years are based on CFDs. 

CFDs can be purchased from a number of regulated trading platforms, and can be paid for easily via credit card, Paypal or many other familiar methods.   

Another advantage of CFDs based on Bitcoins is that they can be traded. This is especially valuable because of the always-changing value of this new cryptocurrency.  With CFDs, depending on the platform, a buyer can often also invest as little as $50 in Bitcoins. This allows newcomers to enter the world of Bitcoin and cryptocurrencies without putting out a lot of money upfront. 

Although Bitcoin is often talked about in a futuristic way, and the blockchain technology underlying it is based on a secure open ledger than can be easily accessed, it can still be inconvenient for a new player to actually acquire Bitcoins due to the limitations placed on purchasing them with credit cards and services like Paypal.   

That is why CFDs are an increasingly popular way for investors to access Bitcoins, and growth in this direction is likely to continue.

The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.

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Item Reviewed: Buying Bitcoins is Easier with CFDs Rating: 5 Reviewed By: EconMatters