Cryptocurrencies can be traded in multiple ways, but there are only two that stand out the most. Regular crypto exchange trading and Crypto CFD trading on various broker platforms.
No matter how you look at it, it becomes very interesting as to what are the key differences between these two trading strategies, and why do so many traders opt for crypto CFDs rather than actual cryptos.
It is also important to determine which one carries the most advantages and benefits for the user. Let’s try to differentiate these strategies and outline the key features traders go for them
Margin trading is one of the key characteristics of any Forex or CFD broker. All of them provide this option not only with currency pairs but with stocks and cryptocurrencies as well. But it’s still very hard to believe that conventional trading platforms would feature anything as controversial as cryptocurrencies.
Cryptos were always being laughed at by traditional financial market traders right? So why are they adopting it now? Well, the main reasons why people avoided cryptos in the past was the risk involved. Most crypto exchanges didn’t have the option to use leverage and increase profits in the long-run, which made them trade with their own money.
In fact, it took quite a long time for brokers to start seeing the profit in cryptocurrencies. According to this IQ Option user review we found, the brokerage was one of the first to quickly add cryptos such as Bitcoin and Ethereum as tradeable CFDs, and the traders found something completely from crypto exchanges different when they first entered the platform.
Overall, leverage quickly became the sole reason why people started transferring to crypto CFDs, which offered them x100 the amount they would trade with on crypto exchanges. Some exchanges are indeed starting to implement it, but they’ll most likely never have it on a level that CFD brokers had it. It was not unheard of to see a 1:100 leverage with a…