What is Crypto CFD Trading

Crypto CFD Trading is the buying & selling of digital currencies without owning the underlying asset. Discover how to trade crypto CFD with its benefits. 

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Crypto CFD Trading is one of the most effective ways to trade in digital currencies. However, it is quite different from the traditional trading method. In this article, we will learn how to trade in Crypto CFD with its key benefits. It will help you in deciding whether these are suitable financial instruments for you.

An Introduction to Crypto CFD Trading

Cryptocurrencies are virtual or digital currencies developed based on blockchain and cryptography technology.

Cryptocurrencies are quite similar to centralized or forex market currencies. However, the major difference is that the government or central banks do not issue these digital currencies.

These decentralized or digital currencies can be used as a medium of exchange or to buy or sell goods or services. Bitcoin, Ethereum, Litecoin, Dogecoin, Ripple, and Polkadot are some widely used digital currencies.
Apart from exchanging goods and services, you can also use these digital currencies to make money. The value of cryptocurrency rises and falls based on different factors like security, availability, demand, technology, popularity, etc.

Traders buy and sell these digital currencies to take advantage of their price movement. There are many ways to trade in cryptocurrencies, and crypto CFD is amongst the most popular way.

What is Crypto CFD Trading?

Cryptocurrency CFD or Contract for difference trading is a financial derivative to buy or sell cryptocurrencies and take advantage of their price fluctuation without owning or storing the underlying assets.

Crypto CFD is an agreement or contract between broker and trader who agrees to settle the difference at the time of expiry of the contract.

Traders buy the crypto CFD when they feel the price of crypto will rise and sell when they feel the price of crypto will fall.

Crypto CFD Trading Example

Suppose the current price of Ethereum is 2000 USD. A trader decided to open a long position as he believed that the price would rise in the future. He bought Ethereum worth 10,000 USD with a capital of 1000 USD using crypto CFD leverage at the rate of 10:1.

In this case trader’s prediction went right, and the Ethereum price rise by 200 USD, which means now the price of 5 Ethereum is 11,000 USD, and he made a profit of 1000 USD.

That is how you can trade in crypto CFD. However, the chance of profit and loss both are there. In the above case, if the trader’s prediction goes wrong, he can also suffer a loss.

How to trade in crypto CFD

Beginners or novice traders may find it difficult to start crypto CFD trading, but not to worry. Here is a step-by-step procedure to start your crypto trading journey.

Educate Yourself

Well, many people think that education is not important in cryptocurrency trading. However, the fact is the market of cryptocurrency is very vast and uncertain.
Losses and profits are both associated with crypto trading. That’s why learning is essential to protect your trade capital, master risk management, use leverage, and make trade decisions effectively.

So start your trading journey with a proper understanding of the cryptocurrency market and the factors that cause the price fluctuation of these digital assets.

Identify a cryptocurrency

There is a wide range of cryptocurrencies in the market. As per data, there are more than 20,000 digital currencies globally. So, identifying an ideal cryptocurrency can be a difficult task.

Your crypto choice will directly impact your profit or loss. A trader should select a crypto considering the budget, risk, technology, volatility, liquidity, time frame, profit expectation, and many other factors.

Determine the Strategy

Like any other financial trading, there are different styles and methods to choose for placing a trade. Based on your trading way, select the right strategy and customize it according to the type of digital currency, time frame, leverage, and other factors.

Money management, emotional management, order management, and risk management are some important elements that you need to consider to make an effective crypto trading plan.

Select a crypto CFD Broker

A broker acts as a link between trader and broker. There are numerous options available in the market; however, selecting the best crypto cfd trading broker can be quite a complex task.

A crypto broker provides traders with facilities like leverage, education, analysis tools, market insight, competitive spreads, different instruments, and many other instruments.

In short, your broker will help you at every stage of your trading journey. Beirman Capitals provides the best and most effective resources for crypto CFD trading; you can give our platform a try.

Open an Account

After selecting your crypto broker, you can start your trading journey by opening an account with it. You can open a trading account with us in a few seconds. You can also open a demo account to practice trading and test our services.

Once you are satisfied with the demo account, you can start trading with a real account by depositing funds. You can also deposit a small fund in the beginning to check whether it is suitable for you.

Start your Crypto Trading Expedition

Once you have deposited funds in your account, you can place real trades and enjoy real profits. Start placing small trades with proper trade execution and define your entry, exit, stop loss, and take profit points.

Also, consider fundamental, sentimental, and technical analysis factors to identify trade opportunities. Keep your eye on the market condition of a particular instrument and adjust your trade accordingly.


Why trade in crypto CFDS

There are different trading instruments like forex currencies, stocks, indexes, bonds, and others to trade in. So, if you are wondering what makes cryptocurrencies so attractive, then here are some benefits of crypto CFD trading you should know

Round-the-clock trading

One of the key advantages of trading in crypto CFD at any time from anywhere. Even the forex market remains closed on weekends, but crypto CFD traders can trade even on weekends, making it suitable for side hustle traders.
Leverage: You can open a large position with relatively small capital while trading crypto CFDs. You can get leverage as high as 1:500, which means with a capital of 100$, you can buy crypto worth 50,000$.

Excellent Volatility

The price swings are comparatively more significant in cryptocurrency trading as compared to stocks or forex trading. You can observe the swings in the price in the history of Bitcoin; many traders have made a potential amount trading in Bitcoin. So crypto market offers excellent volatility.

Competitive Fees

Trading in crypto cfd is cost-effective, and traders can start trading with as low as 100 USD and make a potential return in the market. So, it is a plus point for traders with small or mini accounts.

Decentralized Market

Cryptocurrencies are decentralized, which means these are neither issued nor controlled by the government or central banks. As a result, crypto CFD traders can trade in a market free from manipulation with lesser restriction and control.

Advanced Security & No Digital Wallet

All the transactions of cryptocurrencies are well collected and recorded using blockchain and cryptography technologies, making it a secure and transparent asset to trade in.
In addition, while trading in CFD, there is no need to store digital assets, which eliminates the need for digital wallets and reduces the threats of hacking.


Crypto CFD Trading is no doubt a great trading instrument to make potential returns with many benefits like flexibility, security, great volatility, cost-effectiveness, etc. However, there are disadvantages, too, like leverage risk, cyber risk, complexity, etc.

A trader should understand that you are putting your hard-earned money in the market. Trading with proper planning, knowledge, strategy, and risk management skills help you in making full potential from the market. It will also help you in dealing with the dark side of cryptocurrency trading efficiently.

So upgrade your skills and knowledge, take your crypto trading journey to the next level, and trade in digital assets with confidence.