What is better: A crypto exchange or a Forex broker?
Cryptotraders often argue about the best place to trade major cryptocurrency assets like Bitcoin, Ethereum, Litecoin, Ripple, etc.
Some traders insist that cryptocurrency trading should only happen on cryptocurrency exchanges, and CFD is a kind of cryptotrading surrogate. Meanwhile, their opponents argue in favor of working with cryptocurrencies using the services of Forex brokers.
Therefore, we decided to make a brief overview of the pros and cons of both types of cryptocurrency trading for our readers to allow you to draw your own conclusions.
|1. Buying cryptocurrency is made directly – it means that in case of strong decline in its price you still remain its owner, even at zero cost.||
1. By entering into a cryptocurrency CFD, you
are transactions are guaranteed to be executed at the current price, without
the need to find a buyer or a seller (100% liquidity).|
|2. A large number of tokens are traded on crypto exchanges, including not just the main ones, but also those that have just entered the trading after the ICO.||
2. There is a leverage that allows you to
make transactions with much higher volume than your original deposit, which
allows you to get much greater profit.|
|3. Having accounts on two different exchanges in one cryptocurrency, you can make arbitrage transactions, earning on the quotes difference.||
3. Depositing money into the account and
withdrawing them from the account is made in dollars (fiat money), which
greatly simplifies the process and makes it possible to save on exchange rate
differences and commissions of exchangers.|
4. Your account is always kept in dollars,
insuring your deposit against currency risks in case of cryptocurrency market
5. You have a stop-loss order at your
disposal, which provides automatic closing of your trade with a minimum loss,
at a pre-specified price, without the need to find a buyer at the time of the
|6. Trading Bitcoin CFDs allows you to earn both on the growth and on the fall of the cryptocurrency price, which becomes an excellent way to earn during the development of a strong market correction, thereby “hedging” your position on the cryptocurrency exchange.|
|1. Limited liquidity of assets in case of a market default.||
1. The list of assets is limited to the main
|2. The need to find a counterparty for the transaction.||
2. You do not own any cryptocurrency, so in
case of a market reversal against your position, the deposit balance begins
to tend to zero, forcing either to close the deal with a loss or to increase
|3. The opportunity to deposit and withdraw fiat money is available with a deposit of $10,000, while the number of exchanges working with fiat money is extremely small.|
|4. In case of depositing fiat money, they are still accounted for in USDT, their cryptocurrency equivalent.|
|5. There is no opportunity to manage risks automatically.|
As you can see, both
ways of making speculative or investment profits have their advantages and
However, we can say it is not necessary to be categorical, considering each of them.
After all, both trading on the crypto exchange and trading cryptocurrencies through Bitcoin CFDs with a Forex broker can and should be considered as one of the methods used to make a profit from crypto trading.