You Can Now Margin Trade Bitcoins At Kraken

The Bitcoin has been gaining a lot of mainstream ground in the past years time, with many big companies embracing the cryptocurrency, as well as Bitcoin ATM’s popping up all over the world in large numbers.

The Bitcoin has always been a commodity that you would have to buy or mine to obtain, which has led to a decent amount of price swings in the past. While regular trading can be good and bad, it can be really good when it’s done by professionals trading large quantities at a time.

With large trading amounts, there’s a bigger need for Bitcoins to actually trade, which again in an ideal scenario will boost the Bitcoin value over time and make it more attractive for the mainstream public once again, as well as more companies.

Up until now there hasn’t been a lot of places where you could margin trade the Bitcoin against a fiat-currency, but there is now. The San Fransisco-based Bitcoin exchange company Kraken announced earlier this week that they have launched Bitcoin margin trading against the Euro.

Kraken is one of the leading Bitcoin exchange sites in the world, having massive volumes of Bitcoin trades done on a daily basis and they are even helping out in the Mt. Gox case.

Margin trading is basically where you place money on the value of the currency going up or down and you then sell your trade when you feel like it has hit the highest it can or when you have lost too much value on it.

It is very much like Forex trading, except from that you will be trading a virtual currency against a fiat-currency instead of a fiat-currency against a fiat-currency. With the swings that the Bitcoin encounters in value, it may just become the go-to currency for forex traders, as it is very good for making money.

To make things more like forex, Kraken has enabled the possibility for users to get leverage. Leverage is basically the option to trade with more money than you actually have, making your profits larger or in the worst case, losing your money faster.

Initially Kraken will offer customers the option to trade with 3x leverage, which means that if you gain 4%, you actually gained 12% and vice versa for losing. Within a short period of time, Kraken will even offer up to 20x leverage for those who wants it, making it possible to make 20x as much more as you otherwise would have done.

Margin trading will not be available to everyone from the start, as they have strict requirements in terms of verification to be able to do margin trading. It is quite simple to get enabled however, as you simply have to send in some personal documents if you wish to trade BTC/EUR on the market.

Kraken will not be charging any additional fees towards any margin trading done in their platform, charging only their standard Bitcoin exchange fee, which averages at around 0.10%. Positions open for more than 24 hours will be subject to an additional 0.05% fee however.

New York Stock Exchange Launching Bitcoin Index

Great news surfaced this week for all the Bitcoin lovers and enthusiasts this week, as the New York Stock Exchange (NYSE) announced that they are planning to launch a Bitcoin index. The Bitcoin index will be the first exchange-calculated and disseminated Bitcoin index in the world.

The Bitcoin index will be launching today and will be representing the USD value of a Bitcoin based upon the value it actually trades at on selected Bitcoin exchanges, which has been evaluated and approved to the high standards of the NYSE.

“Bitcoin values are quickly becoming a data point that our customers want to follow as they consider transacting, trading or investing with this emerging asset class,” said NYSE Group President Thomas Farley. “As a global index leader and administrator of ICE LIBOR, ICE Futures U.S. Dollar Index and many other notable benchmarks, we are pleased to bring transparency to this market. By combining our technology infrastructure with our expertise in index calculation and data management, we will continue to launch complementary products based on our rigorous standards and proprietary index methodology.”

The NYSE Bitcoin index will initially receive its data from Coinbase, one of the leading online Bitcoin exchanges in the US and the world, where NYSE made an investment earlier this year in a public funding round.

The NYSE Index Committee will be overseeing the rules and methodology behind the index to ensure that it actually reflects the value and the nature of the Bitcoin market. They will also be reviewing the data sources for the index calculation process when new exchanges that lives up to the high standards, rules, liquidity, transparency and governance are found and accepted as a “provider”.

The NYSE Bitcoin index is expected to grow significantly within a short period of time, being a product that many investors has been asking for. New features and indices will be introduced to the Bitcoin index over time, showing that they believe in the future of the Bitcoin.

The index has been dubbed “NYXBT” and will be the first of many indexes to be created, but no further information was given about the later indexes that will be launched.

This is huge news for the Bitcoin and for everyone who uses it for trading, purchasing or simply as a money transfer service. This gives a huge push in the right direction for mainstream adaption and with it being as secure as possible, it will show people the true value of the Bitcoin and give an incentive towards investing, buying or trading Bitcoins in the future.

“NYXBT utilizes a unique methodology that relies on rules-based logic to analyze a dataset of matched transactions and verify the integrity of the data to ultimately produce an objective and fair daily value for one bitcoin in U.S. Dollars as of 16:00 London time.” A press release from the NYSE reads.

Perhaps more stock exchanges around the world will integrate a similar index in the future, spreading the Bitcoin to more markets and thus increase the overall need for Bitcoins and push the value back to where it should be.