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      Choose from two account types depending on your strategy

    • 24-hour trading

      Trade CFDs on key US shares 24/5.

    • Pricing

      Discover our tight spreads, plus all other possble fees

    • Trading hours
    • Maintenance schedule
    • Risk management
    • Funding and withdrawals
    • Forex

      Get great rates on majors like EUR/USD, plus minors and exotics

    • Commodities

      Trade on metals, energies & softs, with oil spreads from 2 cents

    • Cryptocurrencies

      Speculate on Bitcoin, Ether and more, with a trusted broker

    • Shares
    • ETF
    • Indices
    • Currency indices
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
    • TradingView

      Trade through supercharts with tight spreads

    • MetaTrader 5

      Explore the apex in trading automation with our execution tech

    • The Pepperstone platform
    • MetaTrader 4
    • cTrader
    • Trading tools
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

    • Who we are

      Pepperstone was born from the dream of making trading better

    • Company news
    • Company awards
    • Protecting clients online
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Beginner

CFD explainer: Crypto CFDs vs Crypto exchange

When it comes to Cryptocurrencies, traders have the option to buy and hold physical coins via a Crypto exchange and store the coins using a digital or physical hardware wallet. Alternatively, they can trade Cryptocurrencies using CFDs. Both ways have their own unique advantages, however it’s important to note that only CFDs allow traders to enter both long and short positions when it comes to Cryptocurrencies, and allow the flexibility to use leverage, while never having to own the actual coins in a wallet. Understanding these differences will help you make more informed trading decisions.

Here’s a snapshot of the differences between Cryptocurrency CFDs vs Cryptocurrency Exchange.


What is Crypto CFDs

  • Increased flexibility – traders can trade long or short, meaning they can express a view on cryptocurrency if the price is rising or falling
  • Timeframe – the duration of hold times of crypto CFDs are typically shorter-term and traders are often more active in taking positions
  • Leverage - Crypto CFDs offer leverage, meaning you put down a percentage of notional value as ‘margin’ for the full notional value
  • Overnight funding costs – traders will pay or receive a holding/funding cost for each day the position is held past a rollover point
  • Efficiency – with Crypto CFDs the trader’s capital is held with the broker, so there is no need to have money in a cryptocurrency wallet – it’s impossible to hack a crypto CFD position.
  • Smooth transactions - Traders can trade crypto CFDs with their capital in the account and without having to first exchange for stable coins
  • Regulation - CFD Brokers like Pepperstone are regulated in multiple jurisdictions, meaning that traders enjoy a series of investor protection rights, under the local regulatory framework
  • Longevity – Many CFD brokers such as Pepperstone have been in business for well over 10 years, meaning they are true specialists in retail trading products

Crypto Exchange

Now let’s look at crypto exchanges

  • Complete product range – with over 18,000 coins many of these are available at various crypto exchanges. By comparison, Pepperstone’s CFD range is less extensive although we offer the major coins traders gravitate to that are liquid.
  • Duration of hold time - Participants often hold for longer periods or “HODL” as they say.
  • Leverage- Crypto is offered without leverage and investors can only buy to open meaning no short selling
  • Limited regulation - This is an evolving situation but many expect increased levels of investor protections and higher barriers to tax aversion and money laundering. Access to the evolving
  • Defi space – this includes yield farming, Web 3 protocols, NFT and decentralised Apps known as DAPPS
  • Lower fees - Transaction fees on a centralised exchange to purchase crypto can often be lower however there can be additional costs such as gas fees, slippage and spread when transacting on a decentralised exchange.

To see if trading Crypto CFDs works for you, visit the Pepperstone website for more information on making the right choice for your circumstances or try our demo.

Learn more about trading CFDS

Here at Pepperstone, our customers love the product range along with the low cost to trade and the fact so many markets are open around the clock. Interested? Watch the more videos to learn or speak to our team about whether CFDs are right for you.

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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Trading derivatives is risky. It isn't suitable for everyone and, in the case of Professional clients, you could lose substantially more than your initial investment. You don't own or have rights in the underlying assets. Past performance is no indication of future performance and tax laws are subject to change. The information on this website is general in nature and doesn't take into account your or your client's personal objectives, financial circumstances, or needs. Please read our legal documents and ensure you fully understand the risks before you make any trading decisions. We encourage you to seek independent advice.

Pepperstone EU Limited is a limited company registered in Cyprus under Company Number ΗΕ 398429 and is authorised and regulated by the Cyprus Securities and Exchange Commission (Licence Number 388/20). Registered office: 195, Makarios III Avenue, Neocleous House, 3030, Limassol Cyprus.

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