CFD brokers and crypto exchanges are two of the most popular ways to trade cryptocurrencies. What makes them so different and which one is the most ideal for you?

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Cryptocurrency has been increasingly popular as a trading instrument in the last few years. People tend to buy a cryptocurrency at a low price and sell it at a high price to gain a profit from the price movement. Due to this new understanding, people own cryptocurrencies through a crypto wallet that allows them to use the asset for trading or as digital money for virtual transactions. Some people think that a crypto wallet is wasting time because it takes time to understand the functions. However, that particular belief is not really proven because cryptocurrency wallet is easy to understand in a short time.

You can even acquire a crypto wallet in minutes because the steps and all requirements are processed online. Using wallets for crypto trading is also easy to learn. You don't need to be a professional trader to manage a crypto wallet for trading. Moreover, buying and selling a cryptocurrency is a piece of cake due to the various choices of payment available for use.

broker cryptocurrency

 

Benefits of Cryptocurrency Trading

  1. You can trade for short or long-term strategy.
  2. You get to access massive assets on one platform.
  3. There are no overnight fees for holding long-term positions.
  4. The trading hours are open 24/7, more active than the forex market that only opens 24/5.
  5. It is less risky from the perspective of margin trading since the leverage condition is significantly lower than the provided leverage in forex trading.
  6. The asset can be used for online transactions in merchants that accept cryptocurrencies.
  7. It only takes minutes for creating a crypto wallet and funding it.

The above benefits increase many traders' interest to own and trade cryptocurrency. Most of them think cryptocurrency trading is better in particular situations, especially because it is free from the risk of high leverage, making it good for those who are unfamiliar with margin trading. Moreover, crypto trading allows traders to use the instrument as a digital currency for many forms of online transactions, including deposits and withdrawals from the trading account.

 

Is the Safety Guaranteed?

In 1989, an inter-governmental force was established to regulate the standards for cryptocurrency. Officially labeled as the Financial Action Task Force (FATF), the organization releases compliance standards known as KYC (Know Your Customer). Since its early establishment, FATF has a major goal in setting standards for cryptocurrency including the implementation of legal, regulatory, and operational standard measures to fight financial threats such as money laundering or terrorist financing. In conclusion, no more worries for a novice trader to use cryptocurrency despite its controversy. FATF will protect the crypto holders and the issues dealing with it. 

See Also:  How to Find Out if Your Broker is a Scam

 

Cryptocurrency Exchange and Crypto CFD Brokers

Nowadays, cryptocurrency trading is not limited to the cryptocurrency owners because more CFD brokers have been offering its CFD version as their product. The easiness to trade a cryptocurrency attracts many traders. The fact that they don't have to own a cryptocurrency for trading, allows them to choose which platform they use: via an exchange that requires the use of a crypto wallet or a CFD broker that does not entail any cryptocurrency ownership to trade the asset.

cryptocurrency brokerage

Cryptocurrency exchange platforms and cryptocurrency CFDs can be compared in some ways. They look alike on the trading venues and operations, but they are a bit different in some other aspects. This article will describe the comparisons in detail.

 

The Similarities

First of all, let us take a look at the resemblance between the two ways of cryptocurrency trading. Both cryptocurrency exchange platforms and cryptocurrency CFD brokers are similar in the following aspects:

  • Bi-Directional Trading

Earning money through CFD cryptocurrency can be from buying a certain instrument when the price is on the bottom. It does give you more profit because when you close the position, you will sell it at a higher price. The second option is you sell the cryptocurrency at a high price and buy it at a low price in a process famously known as short-selling.

The rising and falling price in cryptocurrency exchanges will give you profit as well, although it works differently. You need to buy some cryptocurrencies as a deposit, keep them in the exchange's wallet system until their value increases, then use them to buying other prospective coins. The process can happen continuously to optimize your profit from time to time.

optimize profit trading

Let's say, you target some profit from Bitcoin and Binance Coin (BTC/BNB). So, how would you apply the process of the abovementioned procedure? First, you buy a Bitcoin from a crypto exchange and store it in your wallet. If the price of BTC/BNB decreases, you should hold your BTC. But when the price starts to go up, your BTC value will be higher than when you bought it. After that, you can use it to sell your Bitcoin and buy BNB. At the time the BNB rises adequately to a resistance level, you can sell it for the BTC. You can repeat the previous process if the Bitcoin price is the one rising and vice versa. By implementing the strategy, you can earn some gains from the rising and falling price.

 

  • The Price Analysis

Regardless of what to trade, whether it is a cryptocurrency on an exchange or a CFD contract on a CFD broker, the analysis methods remain the same. For instance, the news lifting the Bitcoin price is the same as the news increasing the Bitcoin CFD's price. The pattern of a morning star on a crypto exchange chart eventually has the same result on its CFD chart. The basic principle is that both technical and fundamental analyses can be applied to predict the price movement of an asset, no matter what platform you use to trade it.

 

The Differences

Now, let's discuss the differences. In some points, the crypto exchange platforms are different from the CFD brokers. What are they?

the difference of cryptocurrency

 

  • Authorities Restrictions

Most government worldwide generally still acts in a negative way against cryptocurrency exchanges. Take a look at Facebook's Libra and all trash talks made toward it by several world leaders.

To put pressure on the exchanges, many central banks regulate the financial institutions to block their services to crypto exchanges. Therefore, many of them have limited conventional deposit and withdrawal methods.

On the other hand, the cryptocurrency CFD brokers mainly offer forex and other CFD assets as trading instruments. It is an entity that applies an integrated payment gateway including a bank transfer and other payment methods that connect to the banks. Their establishments have been regulated by many top jurisdictions so their operations are acknowledged legally in many countries. Therefore, there have been fewer restrictions put upon CFD brokers especially in terms of deposit and withdrawal.

See Also:  Most Popular Assets Traded in Forex and CFD Brokers

 

  • Trading on Margin

Mostly, the cryptocurrency exchanges skip the leveraged trading and never offer it, leading to the avoidance of any use of margin. So, traders should deposit some capital in the actual amount that they want to trade. As a side note, some platforms have been initiating to change this policy, such as PrimXBT and Binance.

On the other hand, CFD brokers are famously known as the hosts of high leverage. The rate offered can be from 1:2 up to 1:1000 or even 1:2000 and higher. This allows traders to deposit with less amount of funds, but the risk of losing everything when the market goes against your trade is of course higher.

 

  • The Assets

On the cryptocurrency CFD platforms, the assets traded are based on the contracts. They trade the price differences between the entry and exit positions. They trade based on the contracts in crypto, not the crypto itself. So, a trader does not have to own the actual cryptocurrency because this is not the asset traded. Meanwhile, on a cryptocurrency exchange, the traders must have the actual cryptocurrency. Hence, the deposit, trading (buy or sell), and withdrawal still need the exchange of an actual cryptocurrency.

 

  • The Ownership of Wallet

Crypto exchanges require actual coins to be traded through their provided e-wallets. It is because the company functions as a virtual place for traders to exchange their coins at a real-time price. Conversely, the traders who choose CFD brokers are not required to have the actual coins to trade it, since the nature of the CFD asset itself is to reflect the price movement on the underlying asset. Furthermore, CFD brokers don't have any wallet system to store their clients' balances. Instead, they provide trading accounts that can be funded with some money denominated in one type of currency (usually the US Dollar) that traders can choose freely and later can be used as a margin to trade different assets (be it cryptocurrency, forex, commodity, indices, or stock CFDs).

 

Cryptocurrency Exchanges

The comparisons above are provided to give you clear insights on which platform to choose if you are looking for a way to trade cryptocurrencies. Here are a few examples should you choose a crypto exchange as your ideal platform:

Cryptocurrency Exchanges

 

  • CoinEgg

CoinEgg is an Over-the-Counter (OTC) exchange that allows trading between fiat and regular cryptocurrency. It is a cryptocurrency exchange that works on eUSD, BTC, ETH, and USDT. The base currency for deposit is BTC and its margin is a hundred times the traders' capital. You can trade on the BTC/USD pair, which is one of the most conventional pairs among other fiat/cryptocurrency pairs. CoinEgg also allows you to trade cryptocurrency as a future asset. The future assets can be traded similarly to those traded on OKEx.

 

  • OKEx

It is a strategic place for cryptocurrency trading established by Star Xu. It is built in Malta and becomes a cryptocurrency exchange that is simplified in an all-in-one trade portal. Overall, the platform has 3 basic cryptocurrencies trading: Stablecoins (Tether/USDT and USDK), BTC, and OKN (the native crypto's platform). You should deposit in one of those cryptocurrencies to trade and choose the trading asset based on your chosen coin. Don't worry, there are hundreds of coins that can be paired with those three cryptocurrencies.

okex exchange

The margin trading on OKEx allows the trader to trade 3 or 5 times bigger than your capital. It makes OKEx more flexible than Binance.  Dealing with the contracts, OKEx offers two types: perpetual and future contracts on various cryptocurrencies. The cryptocurrencies are not paired here, but they are traded individually based on the assets you want to trade.

 

  • BW.com

BW is also an OTC exchange. It adds a token Launchpad platform that includes its native token, BWB. Besides BWB, clients can use other base cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash, QC, or Tron that can be traded with any other altcoins.

The fiat currencies used in BW are Euro, US Dollar, British Pound, South Korean Won, Thai Baht, Japanese Yen, Chinese Yuan, and Hong Kong Dollar. On this exchange, you will be provided with a price chart, order sections, and an order book on the interface. Similar to OKEx and Binance, clients must have a wallet to store their base cryptocurrencies.

 

  • Binance

It is the most popular cryptocurrency exchange in the world based on the daily trading volume. Binance was initially established in Hong Kong and later moved to Malta due to the authorities' pressure. The crypto exchange offers hundreds of cryptocurrencies with five main cryptos for transactions: Bitcoin, Ripple, Ethereum, PAX, and Tether.

binance exchange

To trade in Binance, you must select a coin for your base cryptocurrency. Your deposit in crypto will be used for trading with other cryptos. Usually, the traders use Bitcoin for the base cryptocurrency so having a Bitcoin wallet is a must. You can buy a bitcoin wallet from a third party and send the bitcoin to the Binance exchange.

Other notable cryptocurrency exchanges are Sistemkoin, Kucoin, Poloniex, BitMEX, Huobi, and so on. They have most of the features mentioned above. However, Kucoin has something special on the giveaways, token airdrops, and trading contests.

 

Crypto CFD Brokers

If you prefer to trade with leverage and a condition that does not require any wallet, here are some CFD brokers offering cryptocurrencies:

  • Crypto Rocket

It is a CFD broker providing trading access on mobile, desktop, and web platforms. It allows traders to use them without identity verification. Crypto Rocket comes with various crypto pairs including BTC/USD, DSH/USD, ETH/USD, LTC/USD, and many more under the MT4 platform. It is also simple to use; just open an account, deposit using Bitcoin or other accepted cryptos, and start trading with leverage up to 1:500.

crypto rocket

Another interesting feature in this broker is called a Bitcoin Whale Alert. It shares information about Bitcoin movement between exchanges and any huge transactions involving the coin. This feature benefits the traders who base their cryptoanalysis on Bitcoin's supply and demand.

 

  • RoboForex

It is a CFD broker that offers a RAMM account for passive investments. RoboForex traders may trade lots of various assets including cryptocurrencies. It has a new feature that is introduced recently, CryptoIndexes. It is actually an artificial market that consists of a bunch of cryptos in an index. The index can be traded in the long or short term.

Rating


Spread
Variable and Fixed
Regulation
IFSC (Belize), 000138/210
Min Deposit
$10
Established
2009


Interest rate on funds

Bonus offers

Trading contests

MAM accounts

Affiliate program

Islamic accounts available

Payment

Boleto Bancário
CashU
Credit/debit cards
ecoPayz
giropay
iDEAL
Liqpay
Neteller
Perfect Money
Skrill
SOFORT
UnionPay

Well-known as one of the most committed brokers in trading technology advancements, RoboForex reaches out to a wide range of traders, from beginners to the more experienced ones who seek sophisticated trading environments with ECN-like spread and execution. The company is established in 2009 and holds a head office in Belize. Registered under the IFSC Belize, RoboForex manages to attract clients with fantastic leverage as high as 1:2000.

As for the service for European-based traders, RoboForex specifically operates a different brand called RoboMarkets that is still a member of the head company (Robo Holding Company) and has an office in Cyprus. The operation is licensed under Cyprus Securities and Exchange Commission (CySEC).

Following its commitment to be the forefront in terms of a high technology forex broker, RoboForex provides various trading platform choices including MetaTrader 4, MetaTrader 5, cTrader, Social Platform, and its proprietary platform.

Trading instruments range from Currencies to Metals, Indices, Energies, Stocks, ETFs, and Cryptocurrencies. Aside from basic service, trading in RoboForex also presents a collection of distinctive features such as the PAMM system and Social Trading network developed with their own brand of CopyFX, ETFs, and stocks that reaches up to thousands as the available trading assets, tight spreads, and payment method via Bitcoin and Ethereum.

RoboForex also accepts payment through a surprising online gateway besides wire transfer and credit card. The alternative methods are Skrill, Neteller, FasaPay, UnionPay, WebMoney, Perfect Money, Qiwi, and other similar online payments.

After opening an account , traders can start with a minimum deposit as low as $10 in Pro Accounts. To specify, here is a short description of each type of accounts that traders can choose from in RoboForex:

Pro-Standard

  • Minimum Deposit: $10
  • Spread: from 1.3 points
  • Minimum order volume: 0.01
  • Leverage: up to 1:2000

ECN-Pro

  • Minimum Deposit: $10
  • Spread: from 0 points
  • Minimum order volume: 0.01
  • Leverage: up to 1:300

Prime

  • Minimum Deposit: $5,000
  • Spread: from 0 points
  • Minimum order volume: 0.01
  • Leverage: up to 1:100

Pro-Cent

  • Minimum Deposit: $10
  • Spread: from 1.3 points
  • Minimum order volume: 0.1
  • Leverage: up to 1:2000

R Trader

  • Minimum Deposit: $100
  • Spread: from $0.01
  • Minimum order volume: 1 stock
  • Leverage: up to 1:200 (during the trading session) and up to 1:4 (after the trading session)

The R Trader account signifies RoboForex's attempt to distinguish forex and stock trading condition. It appears that the platform used in that particular account is RoboForex's in-house product that is specifically designed for stock online trading.

The overall description above depicts RoboForex as a distinguished broker despite its status as an offshore-regulated entity. Not only successful in providing various trading technology, but RoboForex also focuses on stock trading for more conservative traders. However, it is also important to note that RoboForex is one of the few brokers that boldly offer an extremely high perimeter of leverage at 1:2000.

 

 

  • FreshForex

This broker allows trading in some cryptocurrency CFD products. The cryptocurrencies traded here are Leviarcoin, Bitcoin, Litecoin, Ripple, Ethereum, and Bitcoin Cash. All of the cryptos are paired with the US Dollar. Leverage up to 1:100 is provided and the trading commission is around $5.29 per Standard Lot for BTC/USD.

Rating


Spread
Fixed and Variable
Regulation
FSA (St. Vincent & the Grenadines), 20623 IBC 2012
Min Deposit
$200
Established
2004


Interest rate on funds

Bonus offers

Trading contests

Free education

Personal manager

Trading by telephone

PAMM accounts

Affiliate program

Islamic accounts available

Payment

AdvCash
Bitcoin
Credit/debit cards
EasyPay
FasaPay
Mobile network operators
Neteller
Perfect Money
QIWI
RBK Money
Skrill
WebMoney
Wire transfer
Yandex.Money

 

  • PrimeXBT

PrimeXBT is a platform that provides fiat currency pairs with cryptos, such as BTC/USD, EOS/USD, ETH/USD, and LTC/USD. Their leverage allows clients to trade 100x bigger than the capital. PrimeXBT offers an interactive chart that shows a simplified list of assets. Here you must deposit in Bitcoin, so you need a Bitcoin wallet and an address. Buy the deposit from an external party and it will send the deposit to your account on PrimeXBT.

 

  • SPEDN by Flexa

SPEDN is a promising app that is famous among crypto traders and techno lovers. It grows due to their new methods that are easy to use. You can shop in your favorite stores in the app with the cryptos as easily as shopping with a fiat currency.

SPEDN by Flexa

Supported by Flexa, SPEDN provides some new payment networks that are compatible with the mobile phone. Mobile payment is very practical since it is built-in for cryptocurrency. This payment is to ease traders regarding deposit and withdrawal, to avoid fraud and scams, to enhance traders' privacy, and to save cost.

 

Other CFD brokers to trade cryptocurrencies have been reviewed more thoroughly in Top 7 Brokers to Buy Bitcoin .