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Best Cryptocurrency Spread Betting Brokers and Platforms in 2024
There are numerous ways to invest in cryptocurrency outside of buying and holding long-term. One of the lesser-explored options is cryptocurrency spread betting, which is a little more complex than traditional cryptocurrency buying and selling.
Cryptocurrency spread betting is a popular strategy amongst active traders who want to take advantage of small price fluctuations and short-term profits. In this guide, you’ll learn about what cryptocurrency spread betting is and how it works. You’ll also discover the best cryptocurrency spread betting platforms to use in 2024.
Best Cryptocurrency Spread Betting Platforms in 2024
As a complex trading strategy, spread betting is not offered by all crypto brokers. Therefore, finding a reputable platform to use can be challenging. We researched the market and found two crypto spread betting platforms that are worth considering in 2024.
- FXPro Edge: Market-leading CFD broker that provides excellent liquidity and is highly-rated in the market. FXPro Edge supports an execution speed of 50,000 transactions per second.
- Spreadex: The top spread betting platform for beginners who want to access educational resources and tutorials.
It is important to understand that, although there are other platforms available, not all spread betting providers offer optimal conditions for safe spread betting. The two platforms mentioned above stand out for having strong liquidity, good customer service and positive user reviews.
What is Cryptocurrency Spread Betting?
Cryptocurrency spread betting involves speculating on how you think a cryptocurrency’s price will change over a specific period of time. This is a bit like betting on whether the price of the cryptocurrency will rise or fall from the bid provided by the cryptocurrency broker.
Besides cryptocurrencies, you can also try spread betting for other assets and commodities, such as oil and gas.
Spread-betting is a short-term trading strategy that is mostly used by experienced traders. It comes with a lot of inherent risks but can provide lucrative returns if the market moves in the desired direction.
How Does Cryptocurrency Spread Betting Work?
As mentioned above, spread-betting is a day trading strategy that involves active participation in the crypto market.
Instead of buying cryptocurrency directly, you trade crypto derivatives which track the price of the underlying token. These assets can be bought and sold a lot quicker than cryptocurrencies, which is why they are used for spread betting strategies.
The strategy involves using technical analysis and complex charting tools to predict the direction of a token. When you place your “bet,” you’ll pick a range within which you think the currency will fluctuate. The closest you are to getting your prediction right, the more profits you may make.
Spread betting comes with a lot of risk. There is a find line between gambling and informed trading.
Cryptocurrency Spread Betting Vs. CFD Trading
Spread betting has some striking similarities to contract-for-difference (CFD) trading. For starters, you don’t own the cryptocurrency you trade or bet on in both spread betting and CFD trading. Moreover, CFD platforms allow you to use leverage, which is also available in spread betting.
However, the two trading strategies are not identical.
The main difference between spreading betting and trading CFDs is that spread bets have an expiry date whereas CFDs (unless you are trading futures). When you buy a CFD, you can hold the asset for as long as you wish before choosing to sell it. On the other hand, spread bets come with a predetermined sell date at which the trade will expire.
How to Start Cryptocurrency Spread Betting
To start crypto spread betting, you will need to sign up to a brokerage that supports this type of trading strategy. To do so, follow the steps outlined below.
Sign Up
The first step is to find a broker that allows you to spread bet with cryptocurrencies. Then, sign up with the provider and choose the cryptocurrency you want to wager on.
Choose Crypto
After you have selected your preferred crypto, you will decide whether to go long or short, depending on whether you think the asset’s price will rise or fall.
Deposit Funds
The amount of money you decide to deposit is the stake. You can use risk management tools also. For example, you can enable the “take profit and stop loss” option in settings.
Continue Betting
Once you have deposited your funds, the deal is done. You often have the option to cancel crypto spread betting transactions at any time, regardless of the take profit and stop loss settings you select.
In some cases, you will need to deposit cryptocurrencies instead of fiat currencies such as USD and GBP.
Investors run the risk of a financial loss when investing in cryptocurrency
What Are the Best Cryptocurrency Spread Betting Brokers in 2024?
If you want to start spread betting on crypto, the first step is to find a reputable broker that supports the strategy in your jurisdiction.
Here are our top picks for spread betting brokers in 2024.
|
Spread Betting Broker |
Minimum Deposit |
Crypto Trading Fee |
Minimum Spread |
|
FXPro Edge |
$100 |
FxPro charges $45 per million USD traded |
Minimum spreads are 1.4 and 0 pips |
|
Spreadex |
$0 |
Fees are included in the spread with an average of 0.6 pips during peak hours |
Minimum stake sizes of 1 pip depending on the volatility of the market |
1. FXPro Edge
FXPro Edge is a spread betting platform developed by FXPro. You can download the app on Android and iOS, along with using it on your desktop device.
Key features
FXPro Edge is compatible with advanced charting tools such as MT4, MT5, and cTrader
You can create watchlists and set price alerts
A wide range of analysis tools and indicators that allow you to develop a custom strategy
Like most spread betting platforms, FXPro is known for offering a range of forex pairs. However, you can also trade several popular cryptocurrencies including Bitcoin, Ethereum, Ripple and Litecoin.
As well as providing a great range of tools to conduct your own analysis, FXPro Edge offers done-for-you technical analysis along with an extensive knowledge hub to help you make informed trading decisions.
2. Spreadex
Spreadex is a popular spread betting platform that is also headquartered in the UK. The service has mobile apps for Android and iOS users, and you can also use the platform if you have an iPad.
Key features
- Weekly technical analysis reports and market insight
- Advanced order options and tools for professional trading
Price alerts
Regulated by the Financial Conduct Authority
During our research, we found that Spreadex has received some excellent reviews on TrustPilot and has also been featured in numerous authoritative publications including The Financial Times. It certainly stands out as being one of the most reputable options out there.
What Are the Advantages of Cryptocurrency Spread Betting?
Now that you have discovered the best cryptocurrency spread betting platforms, it’s a good time to look at the benefits and drawbacks of this kind of trading. First, let’s start with the positives:
Trading with leverage could increase your potential profits
Spread betting involves using leverage. If you’re well-versed in cryptocurrency trading, this can be a powerful tool to increase your profits beyond what you’d make when buying and selling coins.
The key here is to use it effectively, as it’s not short of risks, which we’ll discuss later.
Spread betting is tax-free* (in the UK)
Tax implications for spread betting will vary from region to region.
You don’t need to pay capital gains tax on profits you make from spread betting in the UK. Moreover, the money you make is exempt from stamp duty.
In contrast, other forms of cryptocurrency investing may be liable for taxes, so it’s best to check your jurisdiction’s regulations to ensure you’re following the right process.
With that being said, tax-free spread betting isn’t universal. If you live outside of the UK, check your local regulations to avoid breaking the law and landing yourself in hot water.
Spread betting often comes with lower fees than other trading options
Cryptocurrency investing is not only risky, but it can also get expensive. Besides using your money to buy and sell coins or assets, you also need to pay commissions in several cases.
However, while you still need to pay some fees when spread betting, you can waive many of the additional expenses that other forms of investing could bring.
What Are the Disadvantages of Cryptocurrency Spread Betting?
While cryptocurrency spread betting has various advantages compared to other forms of investing, it also has disadvantages you must consider.
Below, you’ll find some important details to keep in mind about the potential downsides of spread betting:
Trading with leverage could increase your losses significantly
While leverage can do wonders for your profits if the market moves in your direction, it could also drastically increase your losses.
It is impossible to predict the future and the crypto market is known for being volatile. If the market turns, you could potentially lose all of the money that you place on a trade.
Spread betting requires a lot of experience
All forms of cryptocurrency investing require at least a basic understanding of the market where you’re buying coins or assets. However, spread betting requires more in-depth knowledge and trading experience.
This type of trading strategy is not recommended for beginners. To make informed trading decisions, you must understand how to use technical indicators and interpret complex price charts.
Alternative Ways to Invest in Cryptocurrencies
Spread betting requires a lot of skill and market knowledge, and it isn’t for everyone. Fortunately, it’s also not the only way to invest in cryptocurrencies.
If you’ve decided that spread betting isn’t for you – or you want to test other forms of trading too – consider the three alternatives below. These are in addition to the ones we mentioned earlier (e.g., CFD trading):
Buying Coins
If you do not want to invest in derivative products, you can buy coins directly from cryptocurrency exchanges. By doing this, you will own the underlying assets that you buy which means that you will be able to the tokens in safe, cold wallet storage.
This strategy is suitable for long-term investing, which is considered to be less risky than active trading.
Grayscale Funds
If you’re not interested in cryptocurrency spread betting, grayscale funds might be a better choice for you. Rather than investing directly in a currency, you buy shares in the fund – and this share increases or decreases depending on the money’s market value.
Cryptocurrency Stocks and ETFs
Another interesting alternative is investing in cryptocurrency stocks and exchange-traded funds (ETFs).
By buying shares of companies that have significant investments in cryptocurrencies or are focused on the future of cryptocurrencies, you can invest in the cryptocurrency market.
For example, you can buy shares of Coinbase (COIN), mining companies, or chip manufacturers that indirectly support cryptocurrencies by producing mining chips.
This option is suitable for investors who want to stick to traditional markets and use a stock broker to gain exposure to the crypto market.
Important Things to Consider Before You Start Spread Betting
By now, you should have a good idea of what crypto spread betting is and the best platforms to use if you would like to implement it into your wider cryptocurrency trading strategy.
Before you jump in and sign up to a platform, here are some important things to consider.
Margins
A margin is the amount of money that you will need to fund your account with to cover any trades that are placed.
There are two types of margins to consider in spread betting:
Deposit Margin
This is the initial investment required to open the position and is usually expressed as a portion of your total trade.
Maintenance Margin
If your open position starts making losses higher than the protected margin, additional funds may be required. You will receive a notification requesting that you increase the amount or risk having your trade closed.
The margin rate when spread betting will depend on which market you are trading.
Liquidity
Liquidity refers to how easily an asset can be bought or sold. It is important to make sure that the platform you choose to use provides strong liquidity, otherwise you may find it difficult to execute trades.
Spread betting fees
It will come as no surprise that spread betting comes with a series of fees. These fees are charged by spread betting platforms to make a profit.
Common fees that you might come across include trading fees (often expressed as commissions or spreads), account management fees, overnight trading fees, inactivity fees, deposit fees, and withdrawal fees.
It is important to understand a platform’s fees before signing up. If the fees charged by a platform are high, they can quickly ea into your potential profits.
Final Thoughts
Spread betting is a popular day trading strategy that allows you to speculate on the future price movement of cryptocurrencies and other assets. In this guide, we have taken a look at the best platforms to use for crypto spread betting and explained what this active trading strategy involves.
As we have mentioned above, spread betting is very risky and is most suitable for experienced traders. Only trade with money that you can afford to lose and remember to conduct thorough analysis before making any decisions.
FAQs
Is spread betting legal?
Spread betting is legal in some countries, such as the UK. But in others, including the US and Japan, it is not allowed. Check your country’s local regulations before signing up for an account.
Do cryptocurrency spread betting platforms have limits on how much I can trade?
Many spread betting companies will limit the amount you can stake and trade. These differ depending on where you go, though, so you’ll need to research that beforehand.
Is spread betting classed as gambling?
Spread betting is classed as gambling in the UK, which is why you don’t need to pay capital gains tax on your profits. However, other countries’ laws may differ. Be sure to check on local regulations before depositing.
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