NEW – Trade Crypto CFDs Now
Trade Cryptos as CFDs (Contracts For Difference) at Mt.Cook
Mt.Cook is pleased to announce that traders can now tap in to cryptocurrency trading as CFD products here. Trading these volatile assets as CFDs offers a few very distinct advantages over trading the physical asset itself.
Benefits
Margin Trading
Margin trading cryptos as CFDs works just like that of any other CFD and FX, in that we as your broker are able to provide leverage on your trades, meaning that every trade you open will receive additional buying power from the brokerage.
This means you can control larger positions with less capital. It also means you are subject to both greater risks and greater profit potentials if you trade with higher leverages. This is unique to CFD providers (although some exchanges are slowly beginning to offer this).
Security
When you trade cryptos as CFDs, there’s very little need to worry about getting your crypto hacked or stolen. There have been very few cases where a CFD platform has ever been hacked or where funds were stolen. This is thanks to very strict AML/KYC regulations which remain in place at most CFD brokers.
Physical crypto exchanges on the other hand are subject to thousands of hacker attempts nearly every single day, therefore there’s more risk involved when keeping your assets stored there. This is largely why people use cold storage wallets to hold their tokens outside of the major crypto exchanges.
When you trade crypto CFDs at Mt.Cook, your trading account is technically your wallet, and it is never in danger of being hacked.
Regulation
Most crypto exchanges offer very little comfort or protection to investors as it pertains to regulation. This is because the industry is still relatively young. At Mt.Cook you can trade cryptos along with our other CFDs, Derivatives and financial products all under our FSCA license, which means that clients have governance and laws to protect their interest.
Liquidity
Liquidity for crypto CFDs is far superior to that of physical coins. It’s virtually impossible for large traders to move the crypto markets with CFDs. This is because technically speaking, crypto CFDs are not really actual cryptocurrencies.
When you open a position, you are not buying the crypto itself, rather, you are buying a contract on the price it is at currently, which you can liquidate at any time for a profit or loss – which then settles in to your fiat trading account, without the need to convert to BTC>Wallet>Fiat etc…
Additional Benefits
Here are 10 more benefits to trading crypto as a CFD…
- No need to mess around with complicated wallets, authentications, and exchanges.
- No need to mess around with fiat exchanging.
- Trade in a regulated environment. Regulation for crypto exchanges is still in it’s infancy stage.
- Trade Crypto, FX, Energies, Indices, and Metals all from one single trading terminal, all under one roof (one stop shop).
- Trade Long and Short very easily.
- Rapid low latency trade execution.
- Far superior customer support (you can speak to an actual person, unlike at most crypto exchanges who have not figured the customer service piece of the puzzle out yet).
- Easier and more funding options (fund by fiat and/or crypto).
- Trade EAs / algos easily via the popular MT4 platform.
- Negative balance protection.
Pitfalls
To be perfectly fair, there are also some downsides to trading cryptos as CFDs vs physical assets and we feel that it wouldn’t be fair to not mention these. These are as follows…
Less Currency Options
Some crypto currency exchanges have well over 100 altcoins available for trading. For those looking to trade through the vast altcoin market, physical exchanges usually offer more options. At Mt.Cook we currently offer the “Big 5 Guard” which are the following major coins…
- Bitcoin
- Ethereum
- Ripple
- Bitcoin Cash
- LiteCoin
For most traders (not HODL’ers) there are plenty of trading opportunities to be had on these coins. However those looking for more pairs may prefer physical exchanges. * Please note: Mt.Cook’s liquidity team are working on a new integration which will soon stream many more coins.
Costs
Transaction fees may be higher on CFDs vs many (but not all) physical exchanges.
Ownership
For the same reason that many people prefer CFDs, others may prefer physical ownership. They feel safer hodl’ing coins in their own cold storage wallets on their phones vs trading them as a CFD on a derivative exchange and trading platform. If one wishes to hodl coins for the long-term, cold storage of physical coins in private wallets may be a preferred strategy by some.
In our view, the benefits of trading crypto CFDs far outshine those of the physical assets. We feel that CFD trading offers the most flexible, convenient, and safe way to trade crypto and do so in a regulated environment.
