Crypto CFD vs Crypto Spot — What Is The Difference?
To become a savvy crypto trader, understanding the difference between crypto spot and crypto features is one of the first steps.
Let’s begin by explaining what crypto spot trading is, it refers to the process of buying and selling virtual currency for instant delivery. Traders directly exchange cryptocurrencies through buying and selling. You also possess direct ownership for cryptocurrencies in a crypto spot market and have legal rights such as staking or voting for major forks.
On the other hand, crypto features trading involves trading contracts or agreements that stand for the actual value of a particular cryptocurrency. Whenever you buy a crypto future contract, you don’t own the underlying cryptocurrency but instead, agree to purchase or sell a specific crypto at a future date.
What are the main differences between each other?
For crypto spot trading, this one is the most basic form of investment you can make. You can buy any digital currency you believe may increase in value, hold it, or trade it against another crypto or fiat currency, depending on your strategies or trends you observe.
Unlike crypto spot trading, crypto futures trading does not reward you with economic privileges such as staking or voting. The crypto market is highly volatile, and crypto futures contracts protect you against volatility and detrimental price movements on the involved asset. Futures are also a proxy tool for users to speculate on the potential value of a specific cryptocurrency.
What are the benefits of CFD trading?
Leveraged trading: one of the most popular reasons for trading cryptocurrencies via CFD is the access to high leverage opportunities as this tool allows you to trade with more capital than a trader has. Margins on CFDs are usually higher because regulatory requirements towards digital assets do not bind brokers, they are free to decide on how much leverage to offer.
Speed of trading: all your transactions are executed in a split second on the broker’s trading platform. It gives you flexibility and allows you to react quickly to market movements.
Advance technical instruments: Considering the notoriously high volatility of the cryptocurrency market, technology and risk management instruments come in handy and protect you from devastating losses. At the same time, advanced charting tools and analytical support offered by brokers help to make informed investment decisions and improve your overall performance.
Customer support: perfect when you need assistance on how to set up an account, make a trade or if you are facing some technical issues.
What are the advantages of CFD trading on the Bitop platform?
Bitop is a digital assets trading platform that focuses on CFDs and provides a unique trading experience, especially towards new users allowing them to seamlessly trade, conduct transactions of any size, and have a free and open trading environment, secure deposits and withdrawal environment. In addition, Bitop Exchange also offers users other various products such as futures, spot trading, derivatives and much more than a normal centralized exchange.
Some advantages of Bitop include:
Security and privacy: using multiple technologies such as trusted computing, ring signatures, homomorphic encryption, and zero-knowledge proofs to ensure user data security and encryption privacy.
Scalability: the goal is to become a top tier exchange that has its high speed big public chain. When it happens, a large amount of data and information will be uploaded, registered, confirmed, traded, and distributed on the public chain itself, which will generate massive amounts of data to have scalability. Having massive data on the public chain will ensure that our transactions are highly efficient and transparent.
Easy use: Bitop focuses on two aspects. One, to provide a Bitop copy trading system that allows new customers to copy trades from experienced traders, reducing the trial and error cost for them and the second is to allow users to open a demo trading account to practice trading and strategies.
If you’re looking to trade CFDs, you should definitely choose a trading platform based on usability, friendliness towards novices, reasonable commissions and other factors.
Bitop is the world’s leading cryptocurrency CFD exchange, providing customers with up to 100x leverage of two-way extremely fast ordering and professional ordering trade. And most importantly, the platform offers traders world-wide access.
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