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Bitcoin CFDs price is dependent on the Bitcoin market price.
CFD products are designed to give market exposure without ever owning the underlying. A Bitcoin CFD enables you to trade a contract based on prices in the underlying market.
It is margin product, meaning you can put down an initial deposit and still gain exposure of a much larger position. This can magnify profits as well as losses.
What factors influence Bitcoin's price?
Bitcoin's volatility makes the cryptocurrency an attractive opportunity as well as a risky market to speculate on.
Its price can shift significantly and suddenly.
Volatility in Bitcoin's price is driven by several external factors:
- Market Cap
- Advance in blockchain technology
- Key events
- Bad Press
Bitcoin CFD example
- You're interested in trading a Bitcoin via a CFD. Our current price is 10,000 to sell Bitcoin, or 10,020 to buy it.
- You believe that Bitcoin's price will fall against the dollar, so you sell 1 contract at 10,000 (equivalent to selling 5 Bitcoins at 10,000 USD).
- The Bitcoin price falls and now price is 9,880/9,900.
- You decide to take profit and close your position by buying at 9,900.
- $10,000 – $9,900 = $100 move or 100 points. Your profit is $500.
- If the Bitcoin price moved higher by 100 points instead (10'100), your loss would be $500.