Summary: One of the most convenient ways to buy Bitcoin in New Zealand is with a reputable and regulated trading platform like Plus500, which allows investors to engage in speculative trading on the price fluctuations of cryptocurrencies using crypto Contracts for Difference (CFDs).
Recommended Multi-asset Broker for Online CFD Trading
-
Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange
-
Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more
-
Low cost investing - No commissions and tight spreads.
-
Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.
-
Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals
What is Bitcoin?
How to trade Bitcoin in New Zealand: A Step-by-step guide
Let’s explore the three-step process for trading Bitcoin in New Zealand:
Step 1: Create a trading account
The first step of trading Bitcoin in New Zealand is to create an account on a cryptocurrency exchange or trading platform. Our recommended choice for trading BTC in New Zealand is Plus500, a well-established and reputable platform licensed by the Financial Markets Authority (FMA). It boasts a user-friendly interface, catering to both novices and experienced traders. On Plus500, you can engage in Bitcoin Contracts for Differences (CFDs), derivative instruments that enable traders to speculate on the price movements of an underlying asset without owning the asset itself.
Other notable features of Plus500 include:
- Variety of cryptocurrency CFDs;
- Fast and reliable order execution;
- No commissions and tight spreads;
- Advanced analytical tools and chart patterns;
- Leverage of up to 1:30;
- Real-time quotes;
- Convenient deposit options via PayPal, Visa, Mastercard, etc.
- Fast and secure withdrawals.
Recommended Multi-asset Broker for Online CFD Trading
-
Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange
-
Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more
-
Low cost investing - No commissions and tight spreads.
-
Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.
-
Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals
Here’s a brief overview of how to set up an account:
- Choose a cryptocurrency exchange: Research and select a reputable cryptocurrency exchange or trading platform that suits your needs. Consider factors like security, supported cryptocurrencies, fees, and user interface;
- Sign up: Visit the chosen exchange’s website and sign up for an account. You’ll typically need to provide personal information, including your name and email address, and create a secure password;
- Verification: Most exchanges require you to complete a Know Your Customer (KYC) verification process. This involves submitting government-issued identification documents (e.g., passport, driver’s license) to verify your identity. This step is crucial for complying with anti-money laundering (AML) regulations;
- Secure your account: Enable two-factor authentication (2FA) to add an extra layer of security to your account;
- Deposit funds: Once your account is set up and verified, you’ll need to deposit funds into your exchange wallet. The available deposit methods may include bank transfers, credit/debit cards, or other payment options, depending on the exchange;
- Start trading: With funds in your exchange wallet, you can now start trading Bitcoin. Continue to the next step, to see exactly how!
Step 2: Trade BTC
After setting up your account and depositing funds, you are ready to trade Bitcoin CFDs. With CFDs, you speculate on the price movements of Bitcoin without owning the actual cryptocurrency. You can choose to go long (buy) if you anticipate Bitcoin’s price will rise or go short (sell) if you expect it to fall.
Follow these steps to initiate your trade:
- Open position: Select your preferred Bitcoin CFD trading pair, such as BTC/USD or Bitcoin against another crypto, and choose the size of your position, which represents the amount you want to trade;
- Leverage: Decide on the right leverage, a tool that allows you to amplify your exposure to Bitcoin with borrowed funds, increasing both potential gains and losses;
- Take precautions: Consider setting stop loss, guaranteed stop, or trailing stop orders to manage your risk. These order types can automatically close your position if Bitcoin’s price moves against your trade beyond a certain point, limiting potential losses.
Step 3: Monitor your position
Once your Bitcoin CFD position is open:
- Monitor the trade: Closely monitor the market’s price movements and your trade’s performance. Be ready to adjust your strategy based on market developments;
- Closing the position: When you achieve your desired outcome or decide to exit the trade, close your Bitcoin CFD position. The difference between the opening and closing prices determines your profit or loss, which is settled in cash;
- Risk management: Always trade responsibly and consider risk management strategies to protect your capital. Bitcoin CFD trading can be highly volatile, so it’s essential to have a clear plan and risk tolerance in mind.
Consider the fees
Bitcoin price today
Pros and cons of trading Bitcoin CFDs
Pros
- Leverage: CFDs allow traders to leverage their positions, potentially amplifying profits if the market moves in their favor:
- Short selling: CFDs enable traders to profit from both rising and falling Bitcoin prices by taking long or short positions;
- Diversification: CFD platforms often offer a wide range of trading assets, allowing for portfolio diversification beyond cryptocurrencies;
- Liquidity: CFD markets are typically relatively liquid, ensuring ease of entry and exit from trades;
- Risk management: CFD trading platforms provide tools like stop-loss and take-profit orders to help manage risk:
Cons
- Leverage risks: While leverage can magnify profits, it also increases potential losses, leading to the risk of losing more than your initial investment;
- Fees: CFD trading often involves spreads, overnight financing costs, and sometimes commissions, which can reduce overall profitability;
- Market complexity: CFDs are complex financial instruments, and traders must thoroughly understand them to trade effectively;
- Short-term focus: CFD trading is often short-term in nature, making it less suitable for long-term investors;
- Psychological stress: The leveraged and volatile nature of CFDs can lead to emotional stress and impulsive trading decisions.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about how to trade Bitcoin in New Zealand
What are Bitcoin CFDs?
Bitcoin CFDs, or Contracts for Difference, are financial derivatives that enable traders to speculate on the price movements of Bitcoin without owning the underlying cryptocurrency. Instead of buying or selling Bitcoin directly, you enter into a contract with a CFD provider to exchange the difference in Bitcoin’s price from the time you open the contract to when you close it.
How do I trade Bitcoin CFDs?
To trade Bitcoin CFDs, you need to open an account with a CFD broker or trading platform like Plus500. Once your account is set up and funded, you can choose whether to go long (buy) or short (sell) on Bitcoin. If the market moves in your favor, you profit; if it moves against you, you incur a loss.
What is leverage in Bitcoin CFD trading?
Leverage enables traders to control a larger position with a relatively small amount of capital. For example, with 10x leverage, you can control $10,000 worth of Bitcoin with $1,000 of your own capital. While leverage can amplify profits, it also increases potential losses.
What is the role of margin in Bitcoin CFDs?
Margin is the deposit needed to open a Bitcoin CFD position. It acts as collateral to cover potential losses. The required margin amount is typically a fraction of the total position size, thanks to leverage.
How do I profit from Bitcoin CFDs?
You profit from Bitcoin CFDs when the price moves in the direction you anticipated. If you go long and the price rises, you make a profit. Conversely, if you go short and the price falls, you profit. Your profit or loss is calculated based on the price difference at the time you close your CFD position.
What are the risks of Bitcoin CFD trading?
Bitcoin CFD trading carries several risks, including the potential for significant losses due to leverage, overnight financing costs, and the inherent volatility of cryptocurrency markets. It’s essential to have a clear trading strategy, risk management plan, and understanding of the risks involved.
Can I hold Bitcoin CFD positions overnight?
Yes, you can hold Bitcoin CFD positions overnight. However, doing so may incur overnight financing costs, also known as swap rates, which can affect your overall trading costs and profitability.
Are Bitcoin CFDs suitable for long-term investment?
Bitcoin CFDs are primarily designed for short to medium-term trading and may not be suitable for long-term investment strategies. They are better suited for traders looking to capitalize on price fluctuations over shorter timeframes.
Where to trade Bitcoin in New Zealand?
You can access CFD trading via trading platforms like Plus500.
Recommended Multi-asset Broker for Online CFD Trading
-
Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange
-
Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more
-
Low cost investing - No commissions and tight spreads.
-
Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.
-
Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals
