Concept Of Binary Options
Binary Options are structurally the financial tool that generally allows the individual or investor to bet on the contract of an underlying asset. They are totally based on an all-or-nothing proposition.
A prediction-based game according to which if you are correct in guessing, you will receive a financial payoff, but if you predict wrong, you’ll lose the entire amount that was invested in Binary Trading Tool.
In Binary Options, the payouts are always remained fixed. And in this, the average payout varies between 60%-90% or even 100% in some cases. These payouts are known to the trader before placing the trade.
They are considered as a relatively simple way of betting, but the scam rates are high too. Also, the most common type of option in the Binary Option is the digital option. Here profit depends totally on your luck and strategies.
Concept Of Cryptocurrency
Cryptocurrency is a type of digital currency which is often called ‘crypto’. It is the internet web-based medium of exchange created to be more advanced, secure, and anonymous.
Cryptocurrencies are operated on a technology termed Blockchain. They are digital assets. They are essentially used to buy or sell goods and services or trade against each other in the crypto ecosystem. Besides, this can be sent directly between the two official parties via private and public keys.
The most crucial viable factor related to cryptocurrencies is that any central authority does not control them. They are a decentralized idea of Blockchain.
And Blockchain is the technology that controls and regulates cryptocurrencies.
How Many Cryptocurrencies Are There?
After the formation of Bitcoin, the number of cryptocurrencies has risen rapidly.
According to a financial market research website, there are around 10,000 cryptos that are traded publicly.
Seeing the case of both binary options and cryptocurrencies, both have their speculative features and public demand.
Before beginning trade in any type of Binary market, have an accessible approach to every perspective. This enables you to select a reliable platform in the financial market; furthermore, it also allows profitability.
Let us discuss the main differences and similarities lying between them.
In this option, the usual trader takes to profit from price fluctuation in the global market. They are relatively simple to understand, and the trade under this is highly risky, but profit returns are also very high.
While in Cryptocurrencies are a type of virtual currencies that are secured by cryptography. They are allowed for secure payments, denoted as ‘tokens’ which are the ledger entries.
Despite some fake criticism, they are praised for their division, resistance in terms of inflation, and transparency.
Types Of Binary Option and Cryptocurrencies
Types of Binary Trading Options-
- High/Low Options or Call/Put Options – These are the most basic and widely accepted type of Binary Options offered by brokers. Also, it is one of the most popular among its types.
- Touch Options- Touch Options are often question formulated. And in this, you cannot set up the price level like upper and below in the trade. And the price level is always created by brokers.
- Boundary (Range) Options- In this, the trader hypotheses that whether the price of an underlying asset will stay ‘in’ or ‘out in a predetermined range during the trade period.
These options usually have higher returns and sometimes have 100% of returns too.
Types Of Cryptocurrencies
There are thousands of cryptos in the digital market, but most of them have little unclear potential.
Here is the list of the most popular types of cryptocurrencies which are the highest ranked in the financial market-
- Bitcoin (most popular and highly valued)
- USD Coin (USDC)
Risks And Rewards
Associated With Binary Options
Binary options, as stated, have two possible outcomes, and generally, there are no fees.
- Here there are no liquidity concerns as traders in Binary Option don’t own the underlying asset.
- Brokers can charge or offer an innumerable amount of strike price, and expiration dates too.
- In the case of payout, it differs from broker to broker, and risk fluctuates.
- In binary options, the rewards are always less than the risk.
Associated With Cryptocurrencies
The growth of cryptocurrencies in recent years has taken an exponential form and is now attracted by many traders.
But there is no definite clarity on the status of crypto. But the main reason that this currency is becoming an attractive destination to deposit or invest money as it can give amazing results and profitability during the bull market.
In 2018, RBI banned some entities and trading in crypto coins.
So, another major risk in Crypto trades is the chances of the ban.
Advantages And Disadvantages
Binary Options Trading is becoming more popular day by day, and most traders prefer this for high profits.
Binary Options Advantages
- This or That Proposition- They are simply based on the outcome. In Binary Options, we make bets in a trade about whether the price of an asset will rise or will fall. Before going deep into the trading system, we already know how much money we stand to lose. It is just like a prediction game.
- High Returns- This is the main reason by which these options have become quite popular. If during trade the money expires still the trader earns at least 70% of the return. And this feature is rarely seen in any other trading instruments.
Binary Options Disadvantages
- Market Regulation- Binary Brokers are a little unregulated; there are very few regulatory binary brokers in the market.
- When you Lose, you Lose- this point is a little drag for Binary terms. Usually, during the purchase of any stock, the price goes down, and you can sell the contract and recover the investment you put in. But in Binaries, the prediction is solely based on yes or no. If the prediction is right, you won. Otherwise, you’ll lose all your money on the underlying asset.
Cryptocurrency has a track record of holding and growing or increasing in value over time. As a result, it is a very attractive tool to online traders and investors.
- Self-governed- About management and self-governance, the development of the currency is based. And in Cryptos, the transactions, funds are stored by professional developers on their hardware, and they get paid for doing this. So, they keep all the transactions accurate and up to date.
- Secure and Private– Safety and Privacy have always been a significant concern in the financial market, especially in cryptocurrencies. The security is far more advanced than Binary Options here for better security; they use pseudonyms originally connected to the user or investor. Also, the most powerful factor here is that a blockchain ledger is involved, which is based on typical mathematical puzzles which are hard to decode.
- Decentralized– As stated above that cryptocurrencies are decentralized. Means financial activities conducted under this instrument are without the involvement of transaction banks. And it is because it helps keep the cryptocurrency monopoly free so that no other centralized authority can determine its financial statement.
- Protection from Inflation- Cryptocurrency is like a good hedge against inflation. Every type of digital currency at the time of launch has a fixed amount. Likewise, as the demand increases similarly, the currency’s value also increases, which helps the currency run long in the trading market and prevents inflation.
- Illegal Transactions – No doubt, in cryptos, the privacy and security of the transaction are high. But they also have been used to exchange money in a lot of illegal and unlawful deals in the past.
- Some organizations still Operate it – They are known for their decentralized power. But also due to some factors, the amount of money of these digital currencies is still owned or controlled by some organizations or creators, and they manipulate the coins. Even Bitcoin, too, has faced this kind of manipulation.
Both the trading platforms are good instruments used by traders globally, and in recent times, their value has been hype showing drastic exponential growth in terms of development and acceptance.
However, it is essential to consider both the advantages and disadvantages.
Look out for risks, large losses, regulations, payouts. But like in Binary Options, it comes up with almost 70% returns. Tests all the aspects, pros, and cons of both and then build the trading empire.