Bitcoin Binary Options

Bitcoin binary options trading has become popular. The value of bitcoin in relation to other currencies (typically USD) varies wildly almost from minute to minute, attracting short-term traders who like the all or nothing nature of binary contracts. Most binary platforms now offer trading on Bitcoin with expiry times from as little as 3 seconds and maximum payouts hitting over 90%, though they are especially high risk.

This guide for beginners explains how Bitcoin binary contracts work, their advantages and risks, plus steps for getting started. Our experts, which includes experienced binary traders and Bitcoin investors, have also rounded up the best binary options platforms for trading Bitcoin.

Top Bitcoin Binary Options Brokers

After opening accounts and confirming they offer Bitcoin, testing their platforms, and recording BTC/USD spreads during peak and off-peak hours, these emerged the best Bitcoin binary brokers:

	Broker	Min Deposit	Expiry Times
	IQCent	$250	5 seconds - 1 month	» Visit
	Videforex	$250	5 seconds - 1 month	» Visit
	Binarium	$5	60 seconds - 3 months	» Visit
	Dukascopy	$100	3 minutes - 1 day	» Visit
	Capitalcore	$10	1 minute - 1 hour	» Visit
	CloseOption	$5	30 seconds - 1 month	» Visit
	World Forex	$1	1 minute - 7 days	» Visit
	BinaryCent	$250	5 seconds - 30 days	» Visit
	RaceOption	$200	5 seconds - 30 days	» Visit
	AZAforex	$1	30 seconds - 1 day	» Visit
	Nadex	$0	5 minutes - 1 week	» Visit

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Best Binary Options Brokers

Top Broker Visit

With rising interest in cryptocurrencies, many brokers now accept Bitcoin, and other cryptocurrencies, as deposit methods. So traders can fund their account, and be paid out, in Bitcoin. See the best broker that accepts Bitcoin deposits.

How Bitcoin Binary Options Work

Bitcoin binary options are essentially straightforward financial contracts that allow you to speculate on the price of the world’s largest digital currency.

There are just two possible outcomes at the contract’s expiry date: win or lose.

• If your prediction is wrong, the trading platform keeps your deposit.
• If your prediction is correct, you get back your initial payment plus a pre-determined pay-out.

Importantly, the price of Bitcoin moves quickly. When we’ve traded it, we’ve seen the price swing a full percentage point in a few minutes on several occasions. That speed is what draws short-term traders in. For binary options, which settle based on precise price levels at exact times, volatility creates opportunity.

But it also amplifies risk. When we traded through news events or crowded market moments, price often jumped through levels faster than expected. Managing this is part discipline, part preparation.

Because most retail traders lose money with binary products, they are best suited to experienced traders with a high risk tolerance and who understand how Bitcoin works and what influences its price.

Contract Types

BTC binary options traders may find several contract options available at the top brokers and exchanges. Importantly, which product is most suitable for you will depend on your investment approach and strategy:

• Up/Down –  Also known as High/Low, this is the most straightforward contract. Investors speculate whether the price of Bitcoin will be higher or lower than the current market price at the expiry. This is the most widely available Bitcoin binary product. You can see an example of an up/down binary trade I took on Bitcoin below.
• Touch/No Touch – Traders predict whether BTC will ‘touch’ one of the pre-determined price levels, set higher and lower than the current price. The option pays out as soon as the ‘touch’ takes place. Not many platforms offer these contracts any more.
• In/Out – Otherwise known as Range or Boundary options, a high and low value is set. Traders then decide whether the price of Bitcoin will finish inside or outside of these ranges when the contract expires. Not many platforms offer these contracts any more.
• Ladder – Not too dissimilar from Up/Down contracts, but instead of using the current market price, pre-determined levels that are staggered up or down are set by the broker. The further your zone is from the closing price, the more you stand to make. This structure can suit assets like Bitcoin that often exhibit significant price action, but the higher potential return usually reflects a lower probability of finishing in-the-money. Not many platforms offer these contracts any more.

A 1-minute Bitcoin binary trade we placed on IQCent, which on this occassion, finished out of the money and lost $220

How to Trade Bitcoin Binary Options

1. Brokers

Not all brokers and exchanges that offer Bitcoin binary options are created equal. With that in mind, there are several factors to consider…

Firstly, which platform offers the best pay-outs and potential winnings on BTC contracts? We specifically tested this across 20 binary brokers and found that despite some advertising payouts over 90%, most Bitcoin payments fell in the 80s during peak sessions and 70s or lower during low volume periods like weekends. Quotex was among the best for Bitcoin payouts, at 92-94% in peak sessions and 82-86% in off-peak.

Also, what is the minimum deposit requirement? Beginners may prefer a brand that offers accounts with just a $10 starting payment. World Forex stands out for their ultra-low deposit requirements of $1.

It’s also worth checking the platform offers a good range of deposit and withdrawal options. Some even accept Bitcoin payments. Deriv is the most trusted binary broker we’ve used that accepts Bitcoin deposits.

Other elements to consider are whether the online broker is regulated. The marketing and distribution of binary options, including Bitcoin binaries, have been banned or heavily restricted for retail traders in many regions, including the EU and UK. If a broker is unregulated or only registered offshore, which is common these days, treat it as high risk. Also be wary as there are multiple scams operating in the binary options and crypto space especially.

Technical traders may also want to check how intuitive and user-friendly the mobile and desktop trading platform is. Deriv has a particularly good mobile from our hands-on tests, allowing you to trade Bitcoin on the go.

Finally, some brands offer enticing sign-up bonuses. These welcome deals can include free trading capital and cash rebates. However, always check withdrawal terms and conditions before signing up for an account. We don’t generally recommend using bonuses as they can encourage overtrading and bad habits, something that’s particularly important to avoid given that Bitcoin is already a volatile, high-risk asset.

2. Strategy

To trade Bitcoin binary options successfully, you need a strategy.

For fundamental investors, this will mean keeping abreast of market developments, such as new regulatory restrictions on the use of cryptos, or announcements that a company plans to offer Bitcoin payments.

This will help you take out the right contract to capitalize on the expected rise or fall in the value of BTC.

Technical traders may prefer to rely on charts and indicators. The best Bitcoin binary options brokers offer interactive charting with a host of drawing and analysis tools. This can help you identify patterns and trends, allowing you to choose a suitable binary options contract.

Tip: Bitcoin binaries are unlikely to be suitable as a first trading product for most. Consider practicing on less complex markets and using demo accounts before committing any real money.

3. Strike Price & Expiry

One of the key advantages of Bitcoin binary options contracts is that you know expected winnings and losses before taking a position.

However, for newbies, selecting the right strike price and expiration can prove challenging. Select targets that maximize your chances of profit while minimizing your risk exposure. This evaluation should be based on the plan you define in step two.

Tip for beginners: start with a straightforward Up/Down Bitcoin binary options contract. Then once you are familiar with how binary options and pay-outs work, you can try more advanced contract options.

4. Monitor & Close

Most contracts you must leave until expiry to see whether you win or lose, however some platforms may allow you to close your trade early if the market moves against you.

Similarly, if the market is trending in your favor, you may want to consider features like ‘double up’ or ‘rollover’ to increase or extend positions, though this carries risk, as you may then lose winnings.

Importantly, check contract terms and conditions first because options may have rules and stipulations that prevent early exits.

5. Risk Management

Risk management is vital – here are some practical tips drawing on our time placing Bitcoin binary trades to produce this guide:

6. Practice

Trading Bitcoin binary options successfully takes practice. So look for ways to sharpen your skills and learn from your past mistakes. Seek the knowledge of experienced investors by joining binary trading forums or look for a provider that offers social trading capabilities.

Free paper trading accounts are another opportunity to improve your skills in a risk-free environment before investing money.

Final Thoughts on Trading Bitcoin Binaries

BTC binary options have simple pay-outs but are still high-risk products. Although the maximum gain and loss are known upfront, most retail traders lose money with these contracts and the sale and distribution of them is heavily restricted in many jurisdictions.

The volatility of Bitcoin ultimately means returns can be highly variable from trade to trade. If you decide to trade Bitcoin binaries, use only money you can afford to lose, and choose a reliable broker.

Bitcoin Basics

Bitcoins are a worldwide phenomena and a growing interest in binary options. The digital currency has a wickedly volatile exchange rate making it attractive to the short-term expiries associated with binaries.

The popularity, and notoriety, of the currency also makes it a prime target of potential scams and the like, so be aware and only trade with trusted brokers such as the ones we list here on BinaryOptions.Net.

To begin trading Bitcoin binary options you should have at least a marginal understanding of what they are. Basically, Bitcoins are digitally created currency units that can be spent anywhere Bitcoins are accepted. They are meant to be a free and easy system for international trade that is not reliant on central banks or charges outrageous fees.

The coins are based on a very complex cryptographic algorithm that produces value in a process referred to as “mining”. Miners, usually tech savvy computer operators, create the coins by running the program, which strictly limits the number and pace of coins that are “mined” ensuring they are not devalued. As coins are mined they become available for sale, trade or exchange.

Bitcoins are now used to exchange currencies around the world and for international trade but have yet to be embraced by many world powers.

Years ago, the number of brokers offering Bitcoin as an asset to trade was very low. Now, the opposite is true. Most brokers we’ve tested now offer trading on Bitcoin and also some of the lesser-known crypto currencies such as Ethereum. So traders now have a range of choices when it comes to finding a broker that offers cryptocurrency trading.

Bitcoin Wallet

To buy and sell bitcoin (rather than simply speculate on the price), you have several options, one of which is a cryptocurrency ‘wallet’.

This is where security and transparency are crucial – these wallets hold your virtual currency, so you are absolutely reliant on them. Enable all available security features, such as two-factor authentication.

We recommend a service called Bitmex.

How Bitcoin Trading Works

Sensing a new opportunity with Bitcoin and binary options, innovative brokers came up with ways to trade binary options and Bitcoin together. There are essentially two ways to trade Bitcoin binary options. The first method is by using Bitcoin as a medium of Exchange. The second method is by using Bitcoin as an underlying asset.

Bitcoin as a Medium of Exchange

When it comes to using Bitcoin as a medium of exchange, traders will be trading the various underlying assets in financial markets with Bitcoin. For example, they may be trading the EUR/USD currency pair and call upon a rise or fall upon the expiry of the binary option. So if their trade is successful, they will be paid in Bitcoin instead of fiat currencies like the U.S dollar or Euro.

You might be wondering why anyone would just want to accept Bitcoin when getting paid in U.S dollar as always been fine before. The first benefit of transacting in Bitcoin is the fact that the cost of transaction is the lowest among all forms of online payment, though your broker or platform may charge a fee.

This is the very reason why Bitcoin was created in the first place, to lower the cost of online transaction. Since there is no central authority managing Bitcoin, no service fee is paid when receiving or transmitting payment.

Bitcoin Trading

Another key reason for traders to use Bitcoin in binary options trading is to earn extra Bitcoin.

Bitcoin itself is traded and its value versus the US dollar varies with supply and demand. However, denominating your trading account in Bitcoin does not shield you from Bitcoin’s price fluctuations – it actually exposes your overall account value to BTC/USD moves as well as to your trading results.

It should be noted that this form of trading is however confined to binary brokers who will accept Bitcoin as a medium of exchange. In other words, there are only a limited number of binary options brokers which fall into this category.

Bitcoin as an Underlying Asset

Another method of trading Bitcoin with binary options is to regard Bitcoin as an underlying asset. As mentioned earlier, Bitcoin itself is traded on specialized Bitcoin Exchanges. Its exchange rate in relation to the U.S dollar rises and falls in accordance to the demand for it.

For example, during the Cyprus banking crisis in 2013, loss of confidence in Euro led to investors switching their safe haven of wealth from the Euro to Bitcoin. This sudden surge in demand for Bitcoin helped to push its value up to almost on par with the value of gold prices.

Because of this volatility, some binary brokers began introducing binary options contracts which tied to the value of Bitcoin. In other words, Bitcoin is traded just like any underlying assets that we find listed on most binary brokers’ platforms.

Deposit And Trade Using Bitcoin

Some brokers now accept bitcoin as an account funding method. This allows traders to deposit, trade with, and be paid out in Bitcoin. The leading broker offering such a service is BinaryCent. They will accept 15 different cryptocurrencies as deposit methods, including Bitcoin, Ethereum and DASH.

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