I have a couple of friends who trade Bitcoin CFDs, and I learned about it from them about a month ago.
All this while have been digging and researching on my own to find out more about this. The findings have been startling, and I felt like sharing with you !!
Bitcoin and crypto CFD trading is a new way of trading cryptocurrencies. Of course, the concept of CFD, i.e. Contracts For Difference, has existed for long in the traditional financial markets.
Now applied to the realm of cryptocurrencies, you get Crypto CFDs. It is an easy way of trading, speculating, and benefiting cryptocurrencies without the extra hassle of keeping them in your wallets with private keys.
One such Bitcoin CFD broker, I have also tested in recent days. It is called eToro.
Now, I am playing with some more Crypto CFD brokers that I think are decent enough to be talked about. Here is a comprehensive list of the same for your reference:
Best Bitcoin & Crypto CFD Brokers 2020
Plus500 is a leading provider of forex, commodities, stocks, indexes, and cryptocurrency CFDs. They have a very prominent position in Europe with the most amount of CFD traders.
The company is based out of Isreal and is serving the CFD needs of customers around the world since 2009. Also, it is an FCA approved company listed on the London Stock Exchange.
Professional traders can trust this platform to trade CFDs of any kind, especially cryptos, and expect to get decent liquidity. Furthermore, you can fund your Plus500 account with a credit card or Skrill account and expect it to not go to zero because of the negative balance protection in place.
For now, you can trade CFDs of these cryptos on Plus500 Bitcoin, Ethereum, Bitcoin, Crypto 10 Index, Litecoin, NEO, Ripple XRP, IOTA, Stellar, EOS, Bitcoin Cash, Cardano, Tron, Monero, etc.
eToro is another Isreal based company operating in this space for more than a decade. They very well know the nuts and bolts of this game boasts of having 5 million-plus customers.
However, it doesn’t serve US customers due to regulatory barriers, but if you are from any other country who wants to get started with CFD trading, eToro is the way to go!!
You can trade here using your cash, which can be quickly deposited using your credit card, PayPal, ACH, or wire transfers.
As of now, for Crypto CFD traders, it the best platform to trade because it has 10+ popular cryptoassets on its platform with an option to go 100x in leverage.
It is also an award-winning CFD trading platform which is regulated by FCA and Cysec authorities. Lastly, if you want to copy successful Bitcoin or crypto CFD traders, eToro facilitates that too by being a social trading platform for CFDs.
AvaTrade is serving the markets since 2006 with its innovative online trading instruments, and it is no surprise that they are one of the leaders in CFDs too.
It is based out of Ireland and regulated by the Irish law, specifically the central bank of Ireland, which regulates CFD and forex brokers.
AvaTrade offers unique options and CFD products on a range of assets, including cryptocurrencies. The range of cryptocurrencies include BTC, BTG, BCH, XLM, LTC, ETH, XRP, IOTA, EOS, etc
Furthermore, there are various funding options available to deposit funds in AvaTrade. You can use credit cards, wire transfers, e-wallets, Neteller, etc. to funds your crypto CFD trades.
PrineXBT is a new and upcoming Bitcoin CFD exchange where you will not be required to worry about the liquidity.
This crypto CFD exchange has rapidly started scaling in 2019, and for many serious derivative traders have become a go-to platform.
I have also placed a couple of trades on PrimeXBT, and I found their UI to be intuitive.
Furthermore, it is also a Bitcoin-based CFD exchange that allows you to trade over 30+ assets, including Crypto (Bitcoin, Ethereum, Litecoin, Ripple, EOS), and much more.
To start with, you only need your email ID, and there are no KYC requirements as such.
You can execute five types of advanced orders to long or short different cryptocurrencies, including stock indexes (S&P500, FTSE100), commodities, and forex all in one place.
What Is Bitcoin & Cryptocurrency CFD Trading?
CFD (contracts for difference) trading is a derivatives trading where you speculate on the price of underlying assets without actually owning the asset. The underlying asset can be stocks, bonds, forex, indexes, or commodities of any kind.
Similarly, when one wants to speculate and benefit from the price movements of Bitcoin or other cryptos without actually owning it, one can opt for cryptocurrency CFD trading.
Using Crypto CFDs, you can go long or short on an asset without the headache of managing its private keys or wallets.
Furthermore, most of the CFD trading happens using margin and leverage. Buy keeping a reasonable margin; one can get leverage of up to 100x to increase their exposure.
Look at this example to understand more:
Also, CFD trading is sometimes confused with futures trading of Bitcoin; of course, on the first look, they might look similar, but in reality, they aren’t.
Crypto CFD trading is an over-the-counter affair where contacts are bought and sold between through a broker. Whereas in futures, the long-short contracts are traded through an order-book in a peer to peer manner.
So, in short, in the case of CFDs, the brokers themselves are market makers because all the time, they are buying/selling the contracts.
But in general, CFDs are preferred over futures when you want to go long or short because there are less regulatory barriers to open a CFD broker and a CFD broker provides the same benefit as futures
Ethereum (ETH) CFDs & Ripple (XRP) CFDs?
Most of the CFD brokers provide a range of assets that you can trade.
But if you are looking for a single recommendation and are interested mainly in Ethereum & Ripple CFDs, you should look no further than eToro.
eToro has been into the business of CFDs for more than a decade, and they know what it takes to handle huge volumes.
Along with that, eToro is a social trading platform where you can engage with successful Crypto CFD traders and even copy their trading strategies to replicate their success.
Now you tell us: What do you think about Crypto CFD trading? Do you think it is the future? Have you ever tried Crypto CFDs? Tell us in the comments below 🙂
Hey there! I am Sudhir Khatwani, an IT bank professional turned into a cryptocurrency and blockchain proponent from Pune, India. Cryptocurrencies and blockchain will change human life in inconceivable ways and I am here to empower people to understand this new ecosystem so that they can use it for their benefit. You will find me reading about cryptonomics and eating if I am not doing anything else.