What is Bitcoin?
Bitcoin is a decentralised cryptocurrency or peer-to-peer digital payment system which is used as a method of investment as well as transaction for other currencies, services or products.
Initially launched in 2009 by an anonymous internet user or group known only as "Satoshi Nakamoto," the virtual currency has grown rapidly since its inception.
The value of early Bitcoin transactions were negotiated by miners on the bitcointalk forums with each Bitcoin at the time worth an estimated $0.06.
As Bitcoin has become more widely used and as greater quantities of Bitcoin have been mined the price has risen sharply since early 2013 to its current 2017 high of $6,386.
Buying Bitcoin vs Bitcoin trading
There are two main ways to invest in Bitcoin online; you can open a virtual wallet and buy Bitcoin through the blockchain at its current market value or you can trade on price movements of Bitcoin by opening a Spread betting or CFD Trading account.
When you buy Bitcoin on an exchange, it is similar to investing in any other physical asset and you will own the underlying instrument which you can then sell at a later date, should the value of the asset rise.
When you trade Bitcoin as a Spread Bet or CFD, you are speculating on the price movement of the underlying Bitcoin market. The price of Bitcoin will be quoted in established currencies, primarily USD, and you will not own the underlying instrument. Additionally you will be trading on leverage which allows you a greater market exposure without tying up large amounts of capital.
- When you trade Bitcoin you can go long as well as short
- Spread Betting and CFD Trading are a tax efficient form of investment. Spread Betting and CFD Trading are exempt from UK Stamp Duty*. Spread betting is also exempt from UK Capital Gains Tax
- You won't own the underlying asset so don't need to set up a virtual wallet
- When you Spread Bet or trade CFDs on Bitcoin you are trading on leverage, this means you have a larger exposure to the market with less upfront capital. Remember leverage can magnify profits as well as losses.
- When you buy Bitcoin you own the underlying asset and will purchase your chosen amount of Bitcoin at full market value
- You will pay capital gains tax on any profits
- You will purchase Bitcoin on an exchange, this will require you to open a virtual wallet to store your Bitcoin
- It can be expensive to withdraw or fund your virtual wallet, some exchanges charge fees for doing so
- Setting up an account and arranging purchase of Bitcoin can be time consuming and overly complicated
What is the Rexor Investments policy on Bitcoin forking?
In the event that the current bitcoin splits into two, new bitcoins are created, this is known as a hard fork. We will generally follow the bitcoin that has the majority consensus of cryptocurrency users and will therefore use this as the basis for our prices. In addition we will also consider the approach adopted by the exchanges we deal with, which will help determine the action we take.
We reserve the right to determine which cryptocurrency unit has the majority consensus behind them.
As the hard fork results in a second cryptocurrency, we reserve the right to create an equivalent position on client accounts to reflect this. However, this action is taken at our absolute discretion, and we have no obligation to do so.
If the second cryptocurrency is tradeable on major exchanges, which may or may not include the exchanges we deal with, we may choose to represent that value, but have no obligation to do so. We may do this by making the product available to close based on the valuation, or by booking a cash adjustment on client accounts.
If, within a reasonable timeframe, the second cryptocurrency does not become tradeable, then we may void positions that had previously been created at no value on client accounts.
Over periods of substantial price volatility around fork events, and we may take any action as we consider necessary in accordance with our terms and conditions including suspending trading throughout if we deem not to have reliable prices from the underlying market.
Bitcoin is a cryptographically protected digital currency, or peer-to-peer electronic cash system, founded using blockchain technology. Bitcoin has eliminated the need for governments and central banks to manage and regulate a currency, instead trust is now placed in corporations with secure blockchain verification for all transactions.
The inventor, or founder of Bitcoin, is widely believed to be a person or persons named Satoshi Nakamoto. The identity of Satoshi Nakamoto has never been revealed and little is known about the anonymous computer programmer.
Because Bitcoin is not regulated in the traditional sense by a central bank or government, it requires a system of distribution. "Bitcoin mining" describes the process of miners who use time, powerful central processing units (CPUs) and large amounts of electricity to solve complex equations which add transaction records to Bitcoinís public, digital ledger or blockchain.
A Bitcoin wallet is essentially a bank account or digital wallet designed to hold Bitcoin.
No - When you trade in Bitcoin you are speculating on price movements in the Bitcoin market rather than owning the underlying asset.
At Rexor Investments you can trade Bitcoin very easily on its spread. For more information, including pricing details, on these please view our Bitcoin Trading page.
When you trade Bitcoin in the market, you are not buying or selling the underlying asset i.e Bitcoin but rather speculating on price movements in Bitcoin. Therefore you are exempt from any Tax.
Like any asset the price of Bitcoin may rise and fall and due to higher volatility in the Bitcoin market prices may surge or drop at greater rates than for more traditional assets. On December 17, 2017 the price of Bitcoin was $19,060.
Bitcoin is traded on multiple independent digital asset exchanges around the world and the diversity of these exchanges can mean that there are different prices for Bitcoin at different times and in different regions.
Rexor Investments offers competitive Bitcoin pricing based on prices models provided by multiple digital asset exchanges. We use industry leading digital asset exchanges to produce a volume weighted average price that is representative of the underlying market. You can view our pricing information on our Bitcoin page or in the Market Information sheet in platform.
Yes. Overnight financing is charged at 0.08219% per day.
Note: Bitcoin financing charges are only applied to live trading accounts at Rexor Investments. Should you wish to calculate what financing charges would be on a relevant demo account position, you can do so using the formula:
Size of position x Bitcoin closing price x financing charge (0.08219%) = Cost of Bitcoin financing
Yes - you can trade Bitcoin on our Web and MT4 trading platforms as well as on our iOS and Android apps.
The margin rates are the following. Tier 1 (25%), Tier 2 (50%) and Tier 3 (100%).