Forex Brokers Offering Cryptocurrency Trading What You Need to Know

The recent craze in cryptocurrency trading has been so powerful that many traditional Forex Brokers have entered the market by offering their clients access to Cryptos like Bitcoin and Ethereum. These brokers that have traditionally offered currency pairs and CFDs and have been doing so with leverage levels that are in excess of 100:1.    

Crypto currency brokers are offering much lower margin levels and understandably so due to the volatility of these products. If you do decide to trade cryptocurrencies with a Forex Broker be aware of leverage levels that are equal the currency pairs. A responsible Broker may offer leverage on crypto currencies at 20:1.    

There is another very important distinction between the traditional Crypto Brokers like Polonex and Kraken and the Forex Brokers that offer Cryptos like eToro and SimpleFX. With a Crypto broker you are usually depositing in a Crypto base currency normally BTC or ETH. With the Forex Broker you are normally depositing with a traditional bank and the base currency is normally in dollars. The crypto currency product that one would trade with a Forex Broker is feed of the cryptocurrencies normally provided by a liquidity source also known as an LP.    Since the crypto offering by most Forex Brokers are derivatives they do not offer the same level of trading transparency as a typical crypto broker that reports all trades. 

One definite downside to the crypto broker is the constant risk of the broker getting hacked. Traders with any significant balances must use cold storage wallets to try and protect themselves.    Forex Brokers also offer the ease and convince of deposits and withdrawals to traditional banks which most of us are more familiar with. Most crypto brokers for a variety of reasons only offer BTC or ETH deposits.    The cryptocurrency offering by Forex Brokers is a good alternative for those traders that are not ready to make the complete jump to an all crypto world.   

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Leveraged trading in foreign currency contracts or other off-exchange products on margin carries a high level of risk and may not be suitable for everyone. We advise you to carefully consider whether trading is appropriate for you in light of your personal circumstances. You may lose more than you invest. Information on this website is general in nature. We recommend that you seek independent financial advice and ensure you fully understand the risks involved before trading. Trading through an online platform carries additional risks.