CFDs are little-known financial instruments that can be very useful in portfolio management, especially for traders. Discover the concept of CFDs, their interest in the cryptocurrency market and their associated benefits and risks.
This article is brought to you in commercial collaboration with X-Trade Brokers (learn more)
What is a CFD?
A Contract For Difference (CFD) is a derivative financial instrument that allows investors to speculate on the price movements of an asset without actually owning it.
In other words, a CFD is a contract between a buyer and a seller, where the seller pays the difference between the current value of an asset and its value at the time the contract is entered into.
It is possible to invest via CFDs through brokers as XTBwhich also offers crypto CFDs. If the investor's prediction is correct, the broker pays him this difference; otherwise, it is the investor who must do so.
Invest serenely in crypto CFDs with XTB
Why invest in crypto via CFDs?
First of all, CFDs offer great flexibility since they allow you to take advantage of the price movements of cryptocurrencies, whether they are upwards or downwards, while having reasonable costs.
In concrete terms, if you think that the price of Bitcoin will increase, you can buy a CFD on Bitcoin (long order). If the price increases, you will make a profit without ever having owned the Bitcoin itself.
Conversely, you can short sell your position (short order), which offers the possibility of make profits when Bitcoin price drops. This is a unique feature of CFDs.
Then, CFDs offer the advantage of not requiring possession of the underlying asset. This is particularly reassuring for cryptocurrency investors, because they free themselves from the constraint of possession via a wallet and the associated risks (loss of the private key in particular).
Finally, CFDs are products where it is possible to apply leveragewhich allows you to overexpose yourself to the market and thus multiply your gains. Be careful, however, as this also multiplies your losses.
Invest serenely in crypto CFDs with XTB
Why choose XTB to invest in crypto CFDs?
XTB is one of the largest online brokers which provides over 1 million customers with an easy and convenient platform to invest in crypto via CFDs.
In France, XTB allows, via an Ordinary Securities Account (CTO), access to more than 3,400 European and American stocks, as well as more than 400 ETFs, including crypto ETFs and ETNs. The XTB broker is particularly competitive on crypto CFDs for several reasons.
First of all, XTB offers a diverse selection of 50 CFDs on cryptocurrencies, covering the most popular assets like Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and Litecoin (LTC).
Afterwards, XTB offers very attractive spreads on its crypto CFDs starting from 0.22%often lower than the market. Tight spreads mean lower trading costs, which is crucial to maximizing potential profits.
In addition, crypto CFDs on XTB offer great flexibility, including the ability to trade up or down 24/7, including weekends. At XTB, Investors can short sell cryptocurrency CFDswhich allows you to take advantage of market volatility without the constraints of actually owning cryptos.
Invest serenely in crypto CFDs with XTB
Finally, XTB is a regulated broker with a solid reputation in the marketClient funds are secured with JP Morgan, and XTB benefits from negative balance protection, ensuring that investors cannot lose more than their initial capital.
On the other hand, XTB is established in around fifteen countries, particularly in France, where it has been present in Paris since 2010. In France, The company is approved by the Financial Markets Authority (AMF) and the Bank of France.
💡 Find our detailed review of XTB and its products
77% of retail client accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
This article is published as part of a commercial collaboration. Cryptoast has done prior research on the products or services presented on this page but could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers must do their own research before taking any action and only invest within the limits of their financial capacities. This article does not constitute investment advice.
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Investing in cryptocurrencies is risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers must do their own research before taking any action and only invest within the limits of their financial capacities. This article does not constitute investment advice.
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