Home / Best Cryptocurrency CFD Brokers

Best Cryptocurrency CFD Brokers

By Jeffrey Cammack Published: May 21st, 2018 Updated: June 12th, 2019

Not all CFD brokers offer cryptocurrency CFDs, as there is no single decentralized market for these currencies. These are the best brokers for trading Crypto CFDs.

  • Best ASIC Crypto Broker: IC Markets (10 Crypto Pairs)
  • Best Social Crypto Broker: eToro (16 Crypto Pairs)
  • Most Crypto Pairs Broker: Admiral Markets (32 Crypto Pairs)
  • Best Proprietary Crypto Platform: Plus500 (9 Crypto Pairs)

What is Cryptocurrency CFD Trading?

Cryptocurrency CFD trading is like any other CFD trading except the asset being traded is cryptocurrency, and not Forex, commodities or equities.

Another difference between crypto CFD trading and other CFDs trading is that there is an established international CFD market for all others CFDs.  As these markets exist, it means that traders can find DMA (Direct Market Access) brokers where trades can be opened on the actual market.

However, since there is no market for crypto CFDs the broker must be the market.  This means that the broker needs to be the counterparty to all trades, which opens up a direct conflict of interest between the trader and the brokers.

STP brokers will not offer crypto pairs because they are not able to make the market, as their setup funnels all trades straight through to the market without interference. Because STP brokers can not offer this setup, if you are looking to trade crypto CFDs, you will need to find a broker that either makes the market or can find a market and counterparty for the trade.

Why Trade Cryptocurrency?

Every market or financial instrument has its personality, but the cryptocurrency CFD market is one of the most volatile and unpredictable of the CFD markets.  It is this volatility, that creates the chance for big profits in single trades, and along with it, those traders who don’t mind the risk in exchange for the potentially huge payout.

The high level of volatility available with digital currencies will automatically replace the need to use margin trading. Even though margin trading is a powerful tool, margin trading of cryptocurrencies is a recipe for disaster for the inexperienced trader.

How Cryptocurrency Trading Works

The main aspect of cryptocurrency CFD trading operates in much the same way as you would trade the Forex CFDs. As with any trading, you’re doing so with the expectation that asset value will change in the way you have predicted, so you can close the trade for a profit.

As with Forex trading, cryptocurrencies are also traded in pairs using a two-way quotation system.   It is still rare for brokers to offer cryptocurrency pairs where both currencies in the pairs are cryptocurrencies – an example would be BTC/LTC or Bitcoin and Litecoin. Most brokers offer pairs of one fiat currency and a cryptocurrency.

What makes this asset appealing to Forex traders is that it uses the same chart reading skills and chart pattern recognition skills that are acquired in the Forex market because the supply and demand forces work the same in the cryptocurrency market.

Before You Begin

Before trading crypto CFDs, first, try to answer why you are interested in trading this asset class.  Is it well-published that in previous years, the value of cryptocurrencies has increased considerably, which has compounded a belief that a high reward is possible for considerably low risk.

Before you start trading Bitcoin (BTC) or any other cryptocurrency, you have to understand blockchain technology and how the value of cryptocurrencies change.  Because these currencies are borderless with no oversight by a central bank or government, their behaviour is in no way regulated or controlled.

As with all trading, the more you learn about a specific asset class, the better trading decisions you will be able to make.

Secondly, not all brokers offer cryptocurrency trading.  There is a growing number who do, and there are even fewer that have a wide range of cryptocurrencies to trade.

How to Start

Knowing the does and don’ts these should prevent you from making the similar rookie mistakes that most novice traders are prone to make. Before you start trading cryptocurrencies, find a broker that best suits your needs for trading crypto pairs. A short list is below as reference.

Firstly, find a trusted broker.  The team has FX-Australia has been trading currency and working with brokers for many years, and have shared their experience in creating lists and writing reviews of a shortlisted set of brokers available.

Secondly, find a broker that has the minimum deposit amount that suits you. Some traders will want to add more to their accounts than others, but this is a highly personal choice.

Top Cryptocurrency Brokers

Broker Min. Deposit Min. Spread
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Is It Profitable?

If you’re on the right side of the market, you can make a quick profit. However, if you’re on the wrong side of the market, then you can lose a lot of money in a short period.

The cryptocurrency market is very volatile, and it’s not uncommon to see 20%, 30% and even 50% swings every single day. If you’re day trading, this can translate to some nice profits if you can capitalise on the short-term fluctuations.

Is It Safe?

Trading cryptocurrency is a very high-risk market. In part, this is because we are dealing with a market that doesn’t have a long history where we can refer to the previous market behaviour, but also because it does not have the same oversight and controls as other fiat currencies.  This lack of control makes the market an unpredictable asset to trade.

Cryptocurrency CFD trading is also only as safe as the broker is. The same rules apply when looking for a broker to trade crypto CFDs, as do for fiat currencies.  Looking for a well-regulated broker, with an acceptible account choice, trading conditions and reputation is key to your trading safety.

Cryptocurrency Trading Hours

Because there is no actual cryptocurrency exchanger, and all trades are using the broker as a counterparty, cryptocurrencies can be traded 24/7.  Crypto CFDs are the only assets that trade around the clock, seven days a week, 365 days a year which is pretty unique in the financial world.

In contrast, the stock market operates 8 hours a day; 5 days per week while the Forex market pauses trading over the weekend.

The main advantage of a 24/7 market is that you can buy and sell cryptocurrencies any time of the day, making it very accessible to all traders.

Are Profits Taxable?

Like any other regular income, cryptocurrency trading is taxable. However, the cryptocurrency market remains a relatively new market, and because of that, there is also a lot of ambiguity in the laws. In Australia, Bitcoin is not seen as money, but rather as property, thus being an asset subject to the same capital gains tax (CGT).

If you’re transacting any cryptocurrency, you need to be aware of the tax consequences — no matter where you live and whatever your circumstances are if you have significant money invested in cryptocurrencies when it comes to legal issues and taxes you should always seek help from a financial adviser or an accountant.

Conclusion

Trading cryptocurrency CFD pairs is essentially the same as trading Forex currency pairs, and if you’re already an experienced technical Forex trader the transition into cryptocurrency will be straight forward.  If you already have a trading account, you only need to find out what cryptocurrency pairs are available.

Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.