Trade Bitcoin with leverage & as a CFD: It’s possible with these crypto providers

When it comes to trading and trading cryptocurrencies and Bitcoin, you will sooner or later be confronted with the concept of leverage. With this Bitcoin leverage, also called „leverage“, it should be possible to achieve high profits. With which providers this is possible and how it works, you will learn in this article.

At a glance:

  • Where can I trade Bitcoin with leverage?
  • What is Bitcoin leverage?
  • Advantages and disadvantages of Bitcoin leverage?

Explanation of Bitcoin leverage & Bitcoin CFD: Are there differences?

Is not all leverage the same? In either case, Bitcoin is the underlying asset that Bitcoin News Trader is leveraged. Or are there differences in financial products after all? It may not be immediately obvious, which is why it is all the more worthwhile to explain these terms in more detail.

What is Bitcoin leverage?

Levers are known to generate high profits, but also high losses. They are a popular trading tool for professional day traders. That is, the kind of trader who does this full-time or derives part of their income from trading. Another term is „leverage“ or „leverage trading“. Leverage is used especially in forex trading and can be applied to a wide variety of underlyings.

A lever always has an underlying, the product on whose price development it is based. The leverage has the task of multiplying the profits from the price development and thus enabling higher profits than would normally be possible with the investment. Basically, you borrow money from the broker for this purpose.

Leverage has its origins in the financial market. Shares have always been considered a good hedge and a long-term investment, but the fluctuations in share prices were usually too small for short-term speculation. They are rather unsuitable for the kind of trading that is common in day trading.

Imagine you buy a share in the morning with the aim of selling it again in the evening and taking a profit because you expect the share price to rise. If the share price rises by 1% and you have invested 1,000 euros, then you have made a profit of 10 euros. After fees and taxes, there is nothing left to speak of a profit.

The same applies to cryptocurrencies like Bitcoin. Admittedly, the prices of Bitcoin and Co. fluctuate much more than many other tradable products and it is quite possible to make a profit with Bitcoin day trading even without leverage. But with Bitcoin leverage, the possible profits can be increased even more.