When researching how to invest in cryptocurrency, you’ll find several methods to get started with. One of the lesser-explored options is cryptocurrency spread betting, which is a little more complex than traditional cryptocurrency buying and trading.
If you’re thinking about trying spread betting on cryptocurrencies and altcoins as an investment strategy, you’re in the right place. In this guide, you’ll learn about what cryptocurrency spread betting is and how it works. You’ll also discover the best platforms (IG, ETX Capital, FXPro Edge, Spreadex) to get you on your way.
Best Cryptocurrency Spread Betting Platforms in 2023
These days, plenty of online platforms make it easier for you to begin spread betting on crypto. But because of this, knowing which is the best crypto spread betting broker can become more difficult. To make the process easier, we have listed the best cryptocurrency spread betting platforms below.
|Partner Name Label||Label||CTA||Customer Support||Launch Date||Security Features||Security Features||Disclaimer|
|1. Pepperstone||4.5||Visit Websitepepperstone.com||Email, Live Chat, Telephone, Whatsapp||2010||2FA, Biometrics, Pin||2FA, Biometrics, Pin||Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.9% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.|
|2. Eightcap||4.4||Visit Websiteeightcap.com||Live Chat, Email, Telephone||2009||2FA, Pin||2FA, Pin||CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.04% 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.|
|3. Coinbase||4.2||Visit Websitecoinbase.com||2012||2FA, Pin , Biometrics||2FA, Pin , Biometrics|
|4. Changelly||3.7||Visit WebsiteChangelly.com||Email, Live Chat||2015||2FA, Biometrics||2FA, Biometrics|
What is Cryptocurrency Spread Betting?
Cryptocurrency spread betting is speculating on how you think a cryptocurrency’s market value will change. Spread betting is speculating on market fluctuations. It involves 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. Crypto spread betting is also possible as an alternative to traditional sports betting.
How Does Cryptocurrency Spread Betting Work?
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 you’ll get in return.
How to Get Started With Cryptocurrency Spread Betting?
To get started with crypto spread betting, all you need to do is:
Step 1 Sign Up
Step 2 Choose Crypto
Step 3 Deposit Funds
Step 4 Continue Betting
In some cases, you will need to deposit cryptocurrencies instead of fiat currencies such as USD and GBP.
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.
At the same time, cryptocurrencies spread betting does have some differences from CFD trading.
With CFD trading, you’ll first buy the asset you want to trade. You can set parameters to sell when the market hits a specific rate, but if you sell instantly, you’ll do so at the current price on your platform.
Another difference between spread betting and CFD trading is that they’re often subjected to different laws in some countries. For example, profits made on CFD trading in the UK would be eligible for capital gains tax; but since spread betting is considered gambling, it would not.
If you want to know more about CFD trading, we’ve prepared a guide on the best Bitcoin CFD platforms.
Cryptocurrency Spread Betting Vs. Cryptocurrency Options
Although options trading involves some level of market speculation, it differs from cryptocurrency spread betting in a tactical sense.
Options trading involves buying the right to sell an asset at a specific price within a designated period. However, with options trading, you do not need to sell at the strike price if the market is trading higher.
Of course, options trading still has risks. You can lose money if the market doesn’t go your way.
Cryptocurrency Spread Betting Vs. Crypto Trading
With trading, you tend to purchase an asset to sell at an increased price. If you trade stocks, you’ll usually do so within different exchanges’ opening hours – but cryptocurrencies spread betting is round-the-clock, so the rules are a little different in this respect.
In contrast to trading, you don’t necessarily need to rely on the asset rising in value to make a profit when spread betting.
What Are the Best Cryptocurrency Spread Betting Brokers in 2023?
Okay, so you’ve now got a better idea about what spread betting is and how it’s different from other forms of cryptocurrency trading.
Below, you’ll find four of the best cryptocurrency spread betting brokers.
|Spread Betting Broker||Minimum Deposit||Crypto Trading Fee||Minimum Spread|
|🥇IG||$300||Up to 20% per annum depending on position with an additional 7.5% admin fee||0.17 - 38 depending on the token and volatility of the market|
|🥈ETX Capital||$100||30% per Annum adjusted daily||£0.01 / £6 - £100 depending on the token|
|🥉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|
IG is a broker headquartered in London. Over 300,000 people use the service in several countries, and you’ll find several features for spread betting regardless of whether you’re new to trading or have years of experience.
IG crypto spread betting overview
|⌛Dealing Hours||24 hours|
|1️⃣One point means||$0.01 - $1 depending on the cryptocurrency|
|💰Minimum bet||$0.3 - $25 depending on the cryptocurrency|
|🔽Minimum spread||£0.25 - £2 depending on the cryptocurrency|
|✋Guaranteed stop premium||0.5 - 30 depending on the cryptocurrency|
|📈Professional margin required||4.5% - 9% depending on the cryptocurrency|
Risk management tools
Set up alerts
ETX Capital is one of the financial services industry’s most established brokers, having existed since 1965. It offers a feature where users can try cryptocurrency spread betting on its award-winning platform.
ETX capital supports Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and Ripple spread betting.
ETX Capital crypto spread betting overview
|⌛Dealing Hours||Sun - Fri 23:00 - 21:55 (Except 22:00 - 23:00 Mon - Thu)|
|💰Min / Max Bet Size||£0.01 / £6 - 100 depending on the crypto asset|
|🔼Max Open Position||£20 - £1000 depending on the crypto asset|
|1️⃣1 Point Move||0.01 - 1 point depending on the crypto asset|
|📈Margin Requirement From||Tiered From 50%|
|💰Finance Adjustments||Applied At 22:00|
|💱Underlying Index||Bitcoin / Ethereum / Ripple spread betting (depending on the crypto asset)|
Real-time pricing transparency
Social trading options
Options to set limits and stops
Offers most of the best coins to invest in
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.
Several types of charts are available
Analytics features for your personal performance
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.
Advanced order options
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:
You could increase your 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.
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.
Potentially fewer fees involved
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 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:
You Could Increase Your Losses Significantly
While leverage can do wonders for your profits when used properly, you could also drastically increase your losses if you don’t have experience using it. Before getting started, make sure you do enough research beforehand and test with small amounts before going bigger.
Requires Skill and Market Knowledge
All forms of cryptocurrency investing require at least a basic understanding of the market where you’re buying coins or assets. But with spread betting, you need to pay even closer attention.
Since crypto spread betting involves speculating on price rises and falls, you can’t just guess things and expect the profits to come your way.
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):
While CFD brokers are the easiest place for beginner cryptocurrency traders to start investing, buying coins from exchanges is also popular. Compared to spread betting, you’ll own the coin outright.
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 more straightforward compared to spread betting.
What to Consider When Spread Betting
There are two types of margins to consider in spread betting:
This is the initial investment required to open the position and is usually expressed as a portion of your total trade.
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.
Final Thoughts on Cryptocurrency Spread Betting
Spread betting is an exciting and unique way to approach investing in cryptocurrencies. It also offers users the chance to try trading various other assets and commodities. You need to dig a little deeper than with CFD brokers and crypto exchanges to pick the right platform, but we hope this guide has made it easier for you!