Why Is Binary Options Trading Popularity Declining?

It wasn’t all that long ago that binary options were all the rage. If you had any interest in investing, chances were good that binary options ads showed up left and right as you browsed the web.

But now, hardly anyone talks about binary options anymore, and the industry has largely crumbled into oblivion.

If you were a binary options trader yourself, you already know what happened. But if you have only a passing familiarity with binary options, you may be wondering why binary trading is no longer as popular as it was before.

There are a number of interrelated factors which played into the downfall of the binary options industry. Let’s go over them now.

1. Scams were prevalent

The big problem with the binary options industry was that it was rife with scams. In fact, it was dominated by scams and scammers, which comprised the bulk of services available. Binary options scams included disreputable brokers, signal services, software providers, and more.

Binary options brokers lured in customers with big bonuses with even bigger strings attached. The majority of traders would blow their accounts just trying to meet the turnover requirements. Those who were lucky enough to win would get denied withdrawals of their profits or even their initial deposits.

While I am referring to the binary options industry in the past tense, you should note that the industry does still exist. It is just vastly downsized. Its heyday is well and truly over, and regulators have shut down numerous scammers over the past few years.

2. Trustworthy brokers were rare

In this sea of scammers, there were (and are) only a smattering of reputable brokers.

Indeed, many of the “better” brokers were still pretty shady. Those which were regulated would go through government bodies which set the loosest possible restrictions — in offshore jurisdictions.

BO brokers like Nadex, Binary.com, or IQ Option were in the minority among hundreds of companies that didn’t care much about their reputation.

With reputable brokers so vastly overwhelmed by mountains of scammers, many customers during the heyday of binary options simply failed to find them, and wound up trading through untrustworthy brokers instead.

3. Consumers weren’t protecting themselves

Binary options as the industry targeted newbie traders with minimal financial knowledge and vast dreams of wealth. Hoping to turn a few hundred or thousand dollars into millions overnight, these traders did not take realistic actions to protect themselves. They would skim through (maybe!) the sparse educational resources binary options brokers provided on their sites, and then jump right into trading.

In short, they didn’t know the difference between investing and gambling, and paid the price.

4. Regulators took action

When regulators realized that the situation was out of control and that consumers were not protecting themselves, they knew they needed to step in.

What followed was a dramatic regulatory crackdown around the globe. Arrests were made. Fines to the tune of hundreds of thousands of dollars were issued. Companies shut down. Binary options trading was banned in one country after another.

5. Binary options ads were banned

During the regulatory crackdown, major platforms like Facebook and Google banned advertisements for binary options sites and services. That meant that surviving binary options businesses had a progressively harder time reaching potential customers.

Between the advertising bans and the regulatory bans, it has become much more challenging to thrive as a binary options broker.

So, it is no wonder the industry shrank dramatically. Get-rich-quick companies could no longer afford to prey on get-rich-quick investors.

6. Many people think binary options is a scam

It is possible to trade binary options using a tested, reliable method and smart money management. By doing so, a skilled trader can pull in long-term profits or even trade for a living.

Nevertheless, this outcome is so rare that many people assume it doesn’t exist.

Whether or not binary options trading is gambling depends on whether you’re using a reputable broker or not, and whether you are trading wisely with a working system or not. But because the bulk of binary options traders during peak popularity were essentially gambling, binary options trading has become synonymous with “gambling” or “scam” in many people’s minds.

This has further eroded the reputation of the industry.

7. Binary options was a pretty restrictive form of trading to begin with

Another reason binary options trading has declined is probably because the opportunities it presents are limited, as is the trader’s level of control.

Basically, why trade binary options when you can simply trade Forex? You can enter or exit anywhere and anytime you like and make use of much more advanced trading tools.

A lot of the smarter binary options traders have moved on to FX and other forms of trading where they can increase their control over their investments.

8. Cryptocurrencies are now the get-rich-quick scheme du jour

Finally, what about all of the get-rich-quick customers? What has become of them?

After realizing that they were not going to get rich trading binary options or after losing access to their trading platforms, many of these same casual traders have flocked to the next big thing.

At the moment, that happens to be cryptocurrencies. So instead of trading options, they are now buying up bitcoin and other virtual currencies.

As with binary options trading, it is possible to make money trading cryptocurrencies. Suffice to say, however, most people will lose in such a volatile market, especially if they think making bank is going to be easy.

The binary options downfall was inevitable, but gambling is eternal

Once regulators began taking an interest in protecting consumers from binary options scams, it was only a matter of time before the industry fell apart.

Nevertheless, the get-rich-quick mindset is one which will never go away, and there is always another scheme on the horizon.

Yesterday, it was binary options. Today, it is cryptocurrencies. Tomorrow, it will be something else. One thing is certain: people will never stop trying to achieve a jackpot without doing the work.

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