In a binary option, you are betting for or against something by a certain end time. Since Bitcoin has become so popular, it now has its own binary trading markets.
What is a Binary Option for Trading?
Binary options are based on a yes/no question. You are placing a trade on whether an asset will yield above a certain price at a certain time. These bets are all-in. If you are right, you are paid. If you are wrong, you lose your entire trade. These markets are not for the risk-averse. They involve strategy, timing, volatility, prediction, and risk. You can win big, but you can also lose big.
What are the Limitations of Using Bitcoin?
If you have Bitcoins, your limitations are that you can only use them to buy into the Bitcoin markets. You cannot, for example, buy into another platform with your Bitcoins.
Why Use Bitcoin to Invest in Bitcoin Binaries?
One of the main features that make Bitcoin, an attractive option for many, is that it isn’t backed by a centralized bank, nor is it issued by any government entity. This means that it has more freedom both in its use and its ability to remain private. The downside is that it’s worth is determined by the stock market. Making your holding’s worth subject to the volatile winds of the sea of speculation.
At the point where you become a Bitcoin binary trader, you become an investor. You are protecting your assets against other players who are plotting its demise. You are controlling your own hedge fund.
Bitcoin binary trading allows you to take some control over the value of your holdings.
Who Sells Bitcoin Binary Options?
Binary options brokers who accept Bitcoin for trading are the ones who sell Bitcoin binary options. However, some brokers accept Bitcoin but don’t have Bitcoin binary option so make sure you have a broker that both accepts Bitcoin and allows Bitcoin binary option.
Brokers can pay out your binary option in two different ways: Bitcoin, or US dollars. The benefit of having your payout in Bitcoin is that you maintain your privacy. If you have a small amount of Bitcoin and are not worried about your privacy, you can choose the broker that pays US dollars. Make sure you know which way your account will be settled before choosing a broker.
What’s Important to Know?
- Bitcoin options are based on a yes/no option and can be paid in US dollars or Bitcoin.
- To keep your privacy, trade solely in Bitcoin and find a broker who settles your binary options in Bitcoin.
- Binary options are an all or nothing bet – you can either win or lose—nothing in between.
- Just like any business, there are some unscrupulous brokers out there, do your research and don’t commit a lot of your assets to the broker until you have tried them out.
- Bitcoin options trading has been labeled as gambling by some countries, so you should check with your municipality before proceeding.