Anonymous trading used to be a reserve for high-profile investors. But with the increasing acceptance of crypto in forex trading, anyone can trade anonymously now. There are both advantages and limitations to trading anonymously. If you choose to trade forex anonymously, you could use Bitcoin or any altcoin accepted by your broker.
In this article, we’ll look at what it means to trade anonymously, why you would do it, and, most importantly, how to use Bitcoin in this endeavor.
KYC-Based vs. Anonymous Forex Trading
Unlike crypto trading, forex investment is a highly-regulated industry. For this reason, regulators require forex brokers to conduct extensive know-your-customer (KYC) processes before allowing traders in. Traditionally, exchanges have had no provision for anonymity. However, over time, many have switched to anonymous/hybrid trading practices.
So, what is anonymous trading? Anonymous trading happens when investors choose to conceal their identity, although their trading activity remains visible in the order book. Usually, an investor will choose between trading on an anonymous (national) exchange or opt for the more private dark pools.
Anonymous brokerage firms are still regulated and thus do not provide complete anonymity – regulators can still access personal information about a particular trader and their activity. On the other hand, dark pools are private trading platforms that are generally out of the investing public’s reach. They can be registered and operate legally, like conventional brokerages.
Whether you’re trading in an open brokerage or a dark pool, crypto is particularly useful in keeping transactions identityless.
With that, let’s find out why you would consider trading anonymously.
Why Trade Forex Anonymously?
Motivations for trading anonymously may differ slightly between investors. However, the following are common reasons.
- Protecting identity – For personal reasons, you might opt to remain an unknown investor on the market. Sometimes one just desires privacy – be it to circumvent some restrictions, keep away stalkers, etc.
- Protecting your strategy – If you’re a particularly savvy trader, your tricks will always be at risk of being copied. But if you trade with your identity concealed, you’re making it difficult for them to join the dots that make up your strategy.
- To conceal your intention – Crypto markets are sentimental, and if traders see you buying or selling in large volumes, prices can move, sometimes to your disadvantage. In such a case, buying or selling anonymously allows speculation to shape the course of price movements.
Using Bitcoin to Trade Forex Anonymously
It’s very possible to trade forex using crypto. And while you can use any crypto to trade forex (as long as your broker allows it), Bitcoin has some advantages. Obviously, the main one is its wide acceptability. BTC’s volatility also makes it a suitable currency for investment. That said, this is how you can use Bitcoin to trade forex.
#1. Get Bitcoin – Naturally, the first step is to acquire Bitcoin. For this, you will need to visit an exchange (not a forex exchange, though). Familiarize yourself with the likes of Coinbase, Binance, and Changelly.
#2. Find a good broker – Not all forex brokers accept Bitcoin. Those that do may be referred to as Bitcoin deposit forex brokers.
#3: Deposit Bitcoin with the broker and provide them with the finer details of the trade they should execute.
Of course, this is a high-level overview of the process. There are intricacies involved, such as how to evaluate brokers and the risks and the benefits of using Bitcoin to trade crypto that you need to be aware of. Let’s take a look at these below:
Top 10 Bitcoin Deposit Forex Brokers
The list of Bitcoin deposit forex brokers is growing by the day. Some of the truly tried-and-tested include the following. Links go to a full review of the broker, where available.
#1. IC Markets – This broker is regulated by the Australian Securities and Investments Commission. They accept deposits from $200 in any of the supported currencies, including BTC. With IC Markets, you can get a leverage of up to 500:1. IC Markets allows its customers to trade Forex, Metals, indices, bonds, stocks, and digital currencies.
#2. EagleFX – EagleFX is a beginner-friendly broker with whom you can trade from as low as $10. The platform offers fast account setup and supports over 55 currencies and 32 digital assets. Withdrawals are also pretty fast. With leverage of 1:500, experienced traders can equally benefit from the platform. One of the things making EagleFX stand out is that it appeals to all levels of traders – from beginners to seasoned investors.
#3. CedarFX – CedarFX is a rather interesting option, as it offers zero commission trading with very tight spreads. This broker offers traders six asset classes: digital assets, stocks, indices, metals, futures, and commodities. When trading with CedarFX, the best part is that investors get to choose from a wide array of options. CedarFX’s leverage goes up to 1:500 and also accepts a minimum $10 deposit.
#4. FX Choice – Just like IC Markets, FX Choice is an electronic communication network (ECN). They accept deposits from $100 in a range of crypto and fiat currencies. The broker offers maximum leverage of 200:1 and a variety of Forex pairs, metals, indices, and digital assets.
#5. Longhorn FX – This broker seeks to attract beginner investors with low minimum deposits starting from $10. You can get leverage up to 1:500 to trade with over 55 currency pairs. Withdrawals are fast and easy, which increases its appeal.
#6. Cryptorocket – This broker allows investors to trade various instruments that include crypto, commodities, stocks, and forex. Leverage of up to 1:500 is possible, and it can be applied to trade some 35 crypto pairs, 55 fiat currency pairs, among other asset classes. The broker features institutional-grade liquidity that guarantees investors competitive pricing. Also, Cryptorocket uses straight-through processing – so you can be sure there will be no price manipulation.
#7. Think Markets – Think Markets is a market maker non-dealing desk kind of broker. You can start with any amount for your deposit, which is encouraging for new users. It is regulated by the Australian Securities and Investments Commission (AU), the Financial Conduct Authority (UK), and the Financial Sector Conduct Authority (ZA).
#8. FXTM – FXTM is an ECN market maker regulated by the Financial Services Commission of Mauritius. You can start trading from a minimum of $5 (or its equivalent in any of the supported currencies). The broker offers maximum leverage of 1:1000.
#9. HotForex – HotForex is also a market maker that accepts deposits from $5. It is regulated by the Dubai Financial Services Authority and accepts several base currencies. The maximum leverage you can get is 1:1000.
#10 Hugosway – Hugosway is a well-established broker with offices in Kingstown, St. Vincent and the Grenadines. The broker accepts bank transfers as well as crypto funding while offering its customers fast times on deposits and withdrawals. It allows trading in digital assets, forex, indices, and metals. The minimum deposit is $50 using credit card and bitcoin, and $10 using Vload.
Benefits of Trading Forex with Bitcoin
- Increased privacy – When you trade forex using Bitcoin, you don’t need to share your personal financial info.
- Increased leverage – Many brokerage firms offer leverage to Bitcoin traders. If you know how to use leverage, this can be hugely beneficial.
- Potentially lower costs – Bitcoin deposit forex brokers are reportedly lowering brokerage fees to attract the new breed of BTC-forex investors.
- Lower deposits allowed – Again, it appears like Bitcoin deposit forex brokers are using this strategy to attract new investors.
- Easier cross-border trading – Thanks to Bitcoin being a global currency, you can trade with any broker from anywhere.
Risks of Trading Forex with Crypto
- Volatility – Since Bitcoin’s prices change continuously, a broker may take advantage of traders by receiving their Bitcoin using the day’s lowest rate and exchanging it at the day’s highest rates.
- The leverage temptation – The special leverage used to entice BTC-forex brokers is a great risk to novice investors.
- Mixing of asset classes – Bitcoin and forex are different asset classes. This use of an ‘intermediary’ currency increases trading complexity and risks.
- Bitcoin’s inherent risks – Bitcoin, like all cryptos, can be easily stolen if not properly secured. A broker that is licensed and reputable ensures the safety of your funds.
Final Thoughts
Using Bitcoin to trade anonymously offers several benefits. You can take advantage of the higher leverage, lower deposits, lower costs, easier cross-border trading, and so on. There is also an ever-increasing number of Bitcoin deposit forex brokers you can experiment with. However, ensure to employ plenty of caution and thoroughly research brokers so you don’t lose money, and start slow, testing it with minimum deposits and thin trades. Overall, anonymous forex trading with Bitcoin is an exciting endeavor that you can explore – whether you’re a veteran or new to the game.