It doesn’t have to be CFDs: trading cryptocurrencies is also possible with real coins. This requires an account and a wallet with a crypto exchange. We present three well-known crypto exchanges below. In the following section we will discuss whether real coins or CFDs are the better choice for cryptocurrency trading.
The US platform Coinbase is one of the largest crypto exchanges in the world. The company was founded in 2012 and operates from the San Francisco location. According to the company, more than 20 million customers have already used the platform and traded cryptocurrencies with a market value of more than USD 150 billion. Various coins such as Bitcoin, Ethereum and Litecoin can be traded on the platform. Coinbase is backed by established financial investors such as the New York stock exchange operator ICE / NYSE. Deposits are accepted by bank transfer and credit card. The fees are already included in the quoted buying and selling rates.
Why across the pond when there are also suppliers from Europe? Vienna-based BitPanda GmbH has been offering cryptocurrency trading since 2014. You can buy and sell Bitcoin, Ethereum and numerous other coins via the German-language platform. With around 800,000 customers, BitPanda is one of the larger providers on this side of the Atlantic. BitPanda accepts various deposit methods, including credit card, Skrill, bank transfer, instant transfer and Giropay. The transaction costs are already included in the courses. Expect around 1.5% surcharge when buying Bitcoin and around 2.0% surcharge when buying Ethereum.
Binance an Asian crypto exchange. Unlike BitPanda and Coinbase, Binance does not act as a market maker or broker dealer. Binance itself does not have any coins. Buyers and sellers place their orders in an order book, via which orders are executed according to defined rules (matching rules). As a result, Binance does not earn anything from the spreads. In the best (more theoretical) case, these begin at zero. The width of the spreads depends on the liquidity in the order book. Binance charges a commission of 0.1% of the transaction volume. This can be discounted if the exchange’s own ERC 20 token is used for payment.
Cryptocurrency trading: real coins or CFDs?
If you want to trade cryptocurrencies, you can trade both CFDs and real coins. A general recommendation for or against a variant is difficult. However, there are many reasons to use CFDs instead of real coins.
Leverage through margin principle
Many CFD brokers allow you to trade cryptocurrencies with one lever. Then you have to z. B. only use 3000 EUR. If the price then rises by 10% from EUR 6,000 to EUR 6,600, you will also earn EUR 600 in profit if you use EUR 3,000. Without leverage they would have had to use EUR 6,000 for this.
Earn on falling prices
If you open a short position in a CFD, you earn 1: 1 on falling prices. Earning money on falling prices is as easy with CFDs as making money on rising prices. With real coins, this possibility does not exist or only with very great circumstances and costs.
Take a look behind the user interface. Which company is behind the trading platform? With a CFD broker based in the EU, you can be sure of strict regulation. The financial service providers are closely monitored by supervisory authorities and have to fulfill various requirements such as the separation of customer funds from business assets or membership in an investor compensation scheme. This does not apply to crypto exchanges. The mostly very young companies often do not even have a cargo address in Europe and operate in a largely unregulated area.
Who doesn’t like to save taxes? If you actively trade real coins, you have to tax profits at your personal tax rate because the exemption limit for profits from private sale transactions ends at EUR 600 per year. If you trade CFDs, the flat-rate tax of 25% plus solidarity surcharge and, if applicable, church tax applies.
No hacker attacks
You’ve probably heard of hacker attacks on crypto exchanges. If hackers manage to steal coins from your wallet, they are likely to be irrevocably lost. The reason: transactions via the blockchain can usually not be reversed. Even if a CFD broker were the victim of a hacker attack, your financial status quo could be restored in no time.