A look at how it works

Bitcoins have no physical form; instead, they rely on balances recorded on a public ledger encrypted with public and private keys.

With bitcoin binary options trading, you can predict whether the price of bitcoin will increase or decrease over a certain period of time. If you are right, you will receive the option’s payout; if you get it wrong, your investment will be lost.

Every bitcoin binary option has a set expiration date that determines whether it is “in the money” (you were right) or “out of the money” (you were wrong). Additionally, every Bitcoin binary option has a defined payout that you can achieve because there is only one possible outcome, win or loss.

Type of contracts

The best brokers and exchanges often have various contract options available to bitcoin binary options traders. Importantly, your investment approach and strategy will determine which product is best for you.

Up/down contracts

The most simple contract is upside-down, often referred to as high-low. Investors are only guessing whether bitcoin will cost more or less than the current market price when the contract expires.

Ladder

Similar to up/down contracts, except the broker sets predetermined levels shifted up or down instead of using the actual market price. You will make more money the further your zone is from the closing price. For Bitcoin traders, this is a particularly exciting product because it works well with assets that show strong price movement, with returns often exceeding 100%.

In out

Also known as “Range” or “Boundary Choices,” this option allows you to specify a high and low number. When the contract expires, traders decide whether the bitcoin price should close within or outside of these ranges.

Touch/No touch

Traders are betting on whether BTC will “touch” one of the previously specified price levels, which are set higher and lower than the current price. As soon as the “touch” occurs, the option pays out.

How to start trading Bitcoin binary options

1. Choose a broker

There are many factors that need to be considered when trading, as outlined below.

Unfortunately, there are many scammers in the bitcoin binary options market. While some fraudulent platforms manipulate trading conditions, others steal traders’ deposits. As a result, before creating an account, it is crucial to check platform evaluations. In addition, brokers who promise huge profits with little risk should be avoided.

The best bitcoin binary options companies offer easy, affordable deposit and withdrawal options. Some brokers require a minimum deposit, which is normally between $0 and $100. On the other hand, cryptocurrency fans may favor a platform that supports bitcoin. That said, be aware if a platform only accepts deposits in BTC because some shady brokers use this strategy to avoid detection.

Demo accounts can be a useful tool for learning how to trade bitcoin binary options. Using these accounts, traders can practice with a modest amount of virtual money. Many bitcoin binary options firms offer free demo accounts to brand new customers.

Brokers often provide new BTC binary options traders with enticing deposit bonuses, but it is important to compare the different offers. Only accept promotional offers from trusted companies if a bonus seems too good to be true. It is important to read the terms and conditions as dishonest brokers can use deposit bonuses to prevent customers from withdrawing money.

2. Have a winning strategy

Traders can choose from the various trading contracts outlined above. Each of these contracts is a technique that can be used for a winning trade. They include over and under contracts, ladder, in and out, and touch and no touch.

3. Time of entry

Before the option expires, will the price of bitcoin increase or decrease? You will choose the type of binary option to buy based on this call. The final step is to choose the right time to enter the market after deciding whether to take a bullish or bearish position. Your approach will determine when to buy, and technical analysis should help you make the best decision.

The use of bitcoins in binary options trading has many wonderful advantages. The fact that the transaction will be much cheaper than any other form of online payment is undoubtedly one of the main advantages. You can also increase your investment by earning more bitcoins. Bitcoins are exchanged and because of this their value fluctuates according to demand. A trader can protect himself against these fluctuations by increasing his trading income.

Because of their simplicity and clarity, bitcoin binary options can be a profitable instrument in a trader’s toolkit. Some bitcoin binary options traders can leverage their technical expertise to make money using a well-crafted strategy.