Now you are reading
Bitcoin Trading - is it actually profitable?

Bitcoin Trading - is it actually profitable?

created Paweł Mosionek2 February 2020

Bitcoin Trading - is it actually profitable? Let the numbers speak for themselves!

There is no day that portals related to trading, forex and even broadly understood finances do not inform about further news from the cryptocurrency market. In 2017, 90% of news articles were related to Bitcoinwhich quickly became synonymous with "virtual currency". A new fashion, powerful volatility, something completely new and different that not everyone has figured out yet ... There is no shortage of arguments and deliberations about whether cryptocurrencies are a bubble or the future. There were also some spectacular stories of "gray" people about how quickly they made a fortune investing in cryptocurrencies. This is what makes us become interested in the subject, whether we like it or not, and we subconsciously want to try our hand at it.

The cryptocurrency world seems to be interesting and intriguing. But is this, from a trader's perspective, a good speculative instrument? Let the numbers decide this.

Cryptocurrency exchanges - List of offers

zonda global cryptocurrencies cryptocurrency exchange binance logo
Country of Registration Estonia, from 11.2019
(formerly Malta)
Malta Hong Kong
Foundation year 2014 2017 2016
FIAT currencies YES YES YES
Stable coins NEVER YES YES
Number of instruments approx. 50 approx. 700 approx. 85
Commission from 0,1% 0,1% (or less) 0,036% - 0,144%
Financial leverage - 1:1 - 1: 125 (futures)
1: 3 (margin)
1:50 (futures)
1: 3 (margin)
Own token - Binance Coin (NBB) CryptoCoins (CRO)
Extras immediate transfers, card to account API, Lending, Staking, NFT, Auto Invest, Farming, P2P, account card, Lending, Staking, NFT

Bitcoin Trading in numbers

Forex brokers They started introducing BTC to the USD in 2017, when the "market" valued it below $ 1000. It took a few months for the price to soar to nearly $ 20, then plummeted with the same grace. You can quickly come to the conclusion that this is an instrument with a lot going on :-).

On the one hand, we are dealing with spectacular volatility, i.e. high profit potential in a short time. On the other hand, with a relatively young and immature market and a number of concerns. There are doubts about the liquidity, continuity of trading (and access to it), the way of executing orders, and above all - who is dealing here with the cards, i.e. who are the big players who generate trends.

But assuming that a real risk speculator is not afraid, it's enough to make some calculations to know whether it is worth to get interested in it at all. At least from a mathematical point of view.

The following calculations are based solely on the offers of Forex brokers who are subject to financial supervision and their clients' deposits are covered by guarantee funds.

Leverage on cryptocurrencies

The accepted standard is that Forex brokers offer leverage on currencies at a level of 1:30 in the European Union, but outside of it you can find more leverage. On indexes, CFD per share or goods, it is different and you have to accept a lever of 1: 5 - 1:20. But what about cryptocurrencies?

In the EU, the standard leverage for cryptocurrencies is 1: 2, but there are also 1: 1 bids. This means that for a transaction worth 1 BTC at a rate of $ 7800 and a leverage of 1: 2 you need to allocate half of this amount as a margin.

On July 1, 2018, due to the entry into force of the ESMA regulations on the European market, the leverage was reduced for retail customers to a maximum value of 1:30. In the case of cryptocurrency instruments, the reduction reached 1: 2. For clients with professional status it is possible to achieve a higher leverage level

Bitcoin and fees and commissions

This is where it gets quite a problem. While brokers boast about the minimum spread in their offers, in the current conditions, during high volatility, it significantly deviates from this level. It is worth adding that no one was brave enough to indicate the maximum spread. But we must adopt some values. Median min. spread oscillates around $ 7-10. But at the moment we are seeing real spreads in the $ 10-40 split. Considering that there are jumps to $ 50-60, and in extreme cases even above $ 100, I think that a sufficiently optimistic assumption will be to adopt the average spread at the level of 30$.


Negative in both directions. Discrepancies between brokers are symbolic. For short positions minus approx. 8 $ per day, for long over 2 times more, ie minus 15-16 $ (case?).


The average daily range of movements is often distorted by corrections, which are usually very spectacular and cause a considerable avalanche of pips. But here we must also take some values. At the moment, 30-periodic ATR on day candles is the result of around 475 $ having Saturday and Sunday candles.

Bitcoin trading - Calculations

The ratio of average costs to average daily variability is 30: 475. This means that the average spread is 6,3% average daily range of motion.

This is an optimistic assumptionbecause we can hit the value 2 times higher + slippage during the transaction, which is highly probable in the market with high volatility and very limited liquidity.

The ratio of swap to average daily volatility is:

  • for the short position 8: 475, i.e. 1,68%
  • for long position 15: 475, i.e. 3,16%

In the table below, we present a comparative comparison to EUR / USD.

BTC / USD EUR / USD Difference: BTC / USD - EUR / USD
Leverage 1: 20 * 1: 100 * -1: 80
Security deposit for 1.0 lot 1600$ 1180$ -420 $
Average spread 30,00 pips 0,2 pips + commission 0,5 pips -29,3 pips
Average daily variability (30 days) 475,00 pips 68,6 pips + 406,4 pips
Share of costs in volatility 6,3% 1,02% -5,28%
Swap - Short / Long -8,00 pips / -15,00 pips + 0,5 pips / -0,7 pips -8,5 pips / -14,3 pips
  • * From 1 on July, 2018 leverage this amount available to professional clients or residents of non-EU countries.
  • ** The leverage on cryptocurrency instruments for retail clients in the EU is 1: 2 - details.

From a mathematical point of view, Bitcoin supports only volatility, which is really powerful. However, the profitability of speculation in the day-trading model is significantly offset by high (and unstable) transaction costs. Long-term investing is also a problem. Looking at the fact that Bitcoin has been in a very strong upward trend for years, and possible downward adjustments last up to a few days, keeping a long position with a volume of 1.0 lots for 30 days we have to reckon with a -450 $ swap. In the case of EUR / USD it is -210 $, which is over 2 times less. Opening a position on BTC also requires the involvement of Fr. 35% more capital than in the case of eurodollar.

The situation of long-term traders saves long-term volatility, i.e. an increase in Bitcoin's value by 800% in just one year. Even with a small lever, correct mid-term direction can turn out to be a hit.

Bitcoin Trading and additional risks

Trading on BTC involves some additional risks that you need to be aware of.

Trading takes place 24 hours a day, 7 days a week, i.e. without interruption on weekends. Relatively few Forex brokers allow you to trade at this time, so we have to take into account regular weekend gaps. Yes, you can choose a broker that offers trading throughout the week. But here comes the liquidity problem - few ticks and even bigger spikes in spreads. Interestingly, however, Bitcoin's volatility during the weekends is increasingly beating the range of moves generated on weekdays. Could it be the effect of addicted to trading? 🙂

bitcoin trading chart

Fall in Bitcoin's price by 3,5% in just 3 minutes. Sunday, 30 June 2019

 The chances of price slippage in the implementation of SL or the opening of the waiting position are definitely higher than in the case of currencies, but this of course results from the very liquidity.

Technical analysis on cryptocurrencies

Some believe that AT on instruments from the "crypto-" category works much better, and the virtual currencies themselves are more predictable. Undoubtedly, this can be felt when there is a long-term, strong uptrend in the chart. Each market has its own characteristics, but with such a specific and relatively young instrument with low (compared to currencies) liquidity, our caution should be increased.

Is AT actually doing better there? Do not judge me. Ultimately, this will be determined by the trader and his skills.

Cryptocurrency exchanges as an alternative

Forex brokers have offered a very interesting novelty. But we are not doomed to them - there are also cryptocurrency exchanges that have just surfaced thanks to Bitcoin's volatility. The offered transaction costs are lower, although the leverage is less common (incl. BINANCE offers jackpot 1:25). On the other hand, it is a treat for long-term people and people using strategy "Buy and hold" - cryptocurrency exchanges do not have swap points.

However, it should be remembered that these institutions are often unregulated. Deposits made are not covered by any guarantee funds. Therefore, it is necessary to rationally estimate the "profitability" of saving on transaction fees at the expense of security.

However, there are more and more entities, also originating from Poland, which have appropriate regulations, meet certain safety requirements and it is difficult to call them "bush companies". More and more often they offer advanced trading platforms and expand their offers so dynamically that the Forex industry is slowly becoming ashamed.

Just look at platforms like Zonda or Binance.


Was this article to discourage you from speculating on BTC? None of these things! Bitcoin Trading sounds great! This text is just a collision of cool mathematics with emotional marketing and new trends. It also helps in developing or choosing the optimal type of transaction strategy.

Is the cryptocurrency market mature at the moment? No, but it ripens day by day. Is it burdened with many risks? Yes. Is bitcoin trading worth the interest? Rate it yourself.

What do you think?
I like it
Heh ...
I do not like
About the Author
Paweł Mosionek
An active trader on the Forex market since 2006. Editor of the Forex Nawigator portal and editor-in-chief and co-creator of the website. Speaker at the "Focus on Forex" conference at the Warsaw School of Economics, "NetVision" at the Gdańsk University of Technology and "Financial Intelligence" at the University of Gdańsk. Twice winner of "Junior Trader" - investment game for students organized by DM XTB. Addicted to travel, motorbikes and parachuting.