Trading Stocks with Bitcoin

Stock trading is getting more and more popular in recent years with stocks hitting all-time highs from time to time. While trading stocks is now a popular way to make money online or even retire early with a stock portfolio, it is less known that you can also trade stocks with bitcoin.

There are a lot of different reasons which can drive you to trade stocks with bitcoin and fortunately nowadays more and more platforms lets you fund your account with bitcoin.

Stock trading with bitcoin is quick and easy just like if you would use USD to fund your account. You need to go through the following steps to start trading.

1. Get some bitcoins
2. Find a reliable platform to trade stocks with bitcoin
3. Fund your account with bitcoin
4. Start trading stocks

 

Review Contents

1. Stock trading
2. Pros and Cons of Trading Stocks with Bitcoin
3. Why would you want to trade stocks with bitcoin?
4. Conclusion
5. Best Brokers to Trade Stocks with Bitcoin
6. SimpleFX
7. Avatrade

 

Stock trading

Since the financial crisis of 2008, the stock market has increased its size to 5x, with individual stocks skyrocketing and experiencing 10x or even 100x returns within a decade.

Tesla shares started to trade in 2011 with a $16 initial price, increased to $968 in February 2020, that is a 60x return over 8 years. In 2008 an Amazon shares worth $24 while now it cost more than $2400, resulting in a 100x return over a period of 12 years.

During the past 10 years buy and hold turned out to be a very profitable stock trading strategy. Although the COVID19 pandemic caused a dramatic economical drawbacks, stocks continue to rebound after the initial shock. Since volatility increased on the market this created widespread opportunities to profit from both long and short positions in stocks. Individual stocks are now have been either struggling or on the other hand shine more than ever in the markets which letting traders profit from the ever-changing prices more and more.

Current market fluctuations however while creating opportunities for traders to exploit market situations with profit also creating a lot of turbulence and unexpected price movements. Nowadays it is more common than ever that single events can completely cross over your trading strategy. Make sure you only risk the amount of money you can loose and apply the necessary risk management tools to preserve your capital.

Pros and Cons of Trading Stocks with Bitcoin

Nowadays many platforms offer the option to trade stocks with bitcoin. On these platforms you can either deposit bitcoin directly to the platform and fund your account with cryptocurrency or the other option is these platforms offer both cryptocurrency or stock trading possibility within the same system. This means you can switch between your portfolio allocation easily and cost-efficiently without leaving the trading system.

Why would you want to trade stocks with bitcoin?

Bitcoin is the most popular cryptocurrency on the market, its price has been going through a massive explosion since it’s inception in 2009. Although buy and hold was indeed a profitable strategy in the case of bitcoin as well during the past years, depending on when did you get into bitcoin, trading it against the stock market could also be proven to be very profitable. In case you have bought bitcoin at the top of the market and did not manage to capture the price momentum, you could still use bitcoin to buy stocks and increase your returns.

Beyond the price effect, trading stocks with bitcoin gives you privacy over your financial situation. There are myriads of reasons you can opt to keep your finances private including shielding away profits from creditors, banks, employers, or even spouses. But there are many people who are just reluctant to share any personal information online, including IDs, addresses, or credit card information. For these people trading stocks with bitcoin is a great opportunity to participate in the market movements without compromising any personal information.

There are some drawbacks as well when trading stocks with bitcoin.

First and foremost you must already hold bitcoin, but buying bitcoin can seem a bit intimidating at the beginning. Although it is not that complicated as it looks like, you need to invest in some time to understand how the system works and which are the best places for your specific situation to buy bitcoin.

As you may have already realized, bitcoin’s price movements can develop quite rapidly, meaning the daily volatility of bitcoin can even be over 10% in some days. This also means that in some cases, buying and holding bitcoin can be a more profitable strategy than trading it for stocks.

Depending on your risk appetite, holding bitcoin in your portfolio might not be suitable for you. You should always vet your investment decision according to your special circumstances, the amount of money you can invest, the time horizon, your liability, and liquidity situation to arrive to a conclusion on what is the maximum amount you can afford to lose on trading without harming and impacting your life.

Conclusion

Stock trading is living its renaissance now because of easy accessibility. Considering business cycles and the past couple of decades of technological boost, you could have made a small fortune investing in the right stocks. The same applies to bitcoin with the added benefit of having even higher profits and enhanced privacy features. There are several brokers who offers trading solutions for those who want to trade stocks with bitcoin, be it directly on Metatrader 4 and 5 or through web and mobile interfaces. Having your stock and cryptocurrency portfolio on the same trading platform can help you to save on transaction cost while letting you benefit from favorable market conditions right away.

Best Brokers to Trade Stocks with Bitcoin

Although both stock trading and bitcoin trading gained significant popularity over the recent years, there are only a handful of brokers which offer trading stocks with bitcoin. The main reason behind this is that due to the regulatory environment affecting financial services, brokers are now required to identify their users to avoid money laundering cases. Although verification on these platforms usually happens very quickly and smoothly, some may still be reluctant to share personal information over the internet.

However, if you decide to trade stocks with bitcoin even if it is not fully anonymous, on these trading platforms you can enjoy a very low switching cost for diversifying your portfolio. As both stocks and bitcoin are traded on the same trading dashboard, converting funds will be quicker and cheaper if you are staying on the same platform compared to using multiple broker accounts. Hence, if you are looking for a more diversified portfolio that includes both stocks and bitcoin, the below brokers can help you to achieve this at a reasonable fee.

 

SimpleFX

 

SimpleFX – 1:6
SimpleFX lets you trade on the stock market truly anonymously using bitcoin deposits.

Started its operations in 2014, SimpleFX quickly became the goto platform for those who would like to make use of their bitcoin on the stock markets. The headquarter of SimpleFX is located in the Caribbean country of Saint Vincent and the Grenadines, but they are serving customers worldwide, with the trading platform available in 15 different languages.

Beyond bitcoin, you can deposit on SimpleFX using eight other cryptocurrencies, including Bitcoin Cash, Dash, Ethereum, Ethereum Classic, Litecoin, Monero, and Tether.

If you prefer fiat deposits, you can also deposit USD and IDR using FasaPay. FasaPay lets you top your account using bank wire transfers. Bear in mind, whatever deposit method you choose to fund your account, you can only use the same payment system for withdrawals, unless going through additional verification in the system.

Although SimpleFX supports 160 worldwide, there are still some countries on their restriction list because of local regulation. One such example is the United States, so US residences are unfortunately not allowed to use SimpleFX’s services.

You can trade up to 10x leverage on stocks on US, European and Japanese stocks, but there is no option for margin trading on cryptocurrencies on SimpleFX.

Since you are using SimpleFX through Metartade 4 you can make both market and pending limit order types on the platform including stop and trailing orders as well.

SimpleFX is a commission fee broker, there is no trading fee, deposit or withdrawal fee on the platform. The spreads are starting from 80 pips and they also charge a 3% inactivity fee (minimum $25) if you are not trading on the platform for a while.

 

Avatrade

 

Avatrade – 1:10
If you want to trade on a lot of different assets, including hundreds of US, European, and Asia stocks while having the option to trade with bitcoin on the same account, Avatrade will be your best bet.

Avatrade has launched in 2006 in Ireland and by now has grown into a regulated broker serving 150+ countries worldwide with several offices around the globe. Beyond opening a real account, you can also try your strategies with a demo account if you want to start with paper trading first.

The real trading environment supports 8 different platforms, including MT4, automated trading, and mobile trading as well as different operating systems.

Unfortunately, you cannot deposit bitcoin directly on Avatrade, but after you have funded your account with a credit card, bank wire, PayPal or Skrill you can trade stocks and bitcoin on the same platform using CFDs, it still worth to be added to this list.

There are 11 different altcoins are supported on Avatrade including Bitcoin, Bitcoin Gold, Bitcoin Cash, EOS, Ethereum, IOTA, Dash, Litecoin, Ripple, Neo, and Stellar. Avatrade accepts deposits in USD, EUR, GBP, and AUD.

For the experienced traders, Avatrade offers leverage up to 30x on selected stock, 2x for EU, and 25x for non-EU residents on crypto assets. Avatrade caters order type suitable for newbies and advanced traders. Newbies can start with the market and pending orders, while advanced order types, like One Cancels the Other (OCO) are available for those who would like to execute more complex strategies.

The fee structure on Avatrade is fairly complex, you need to pay attention to the spreads if you do spot trading, in case of margin trading you pay overnight interest and maturity rollover fee. The average spread on stocks on Avatrade is 75 pips. Bear in mind, if you do not use your Avatrade account for 3 months, you will be charged for an inactivity fee of $50.