Did you know that there’s more than one way to trade crypto? Most people might be more familiar with the traditional way to trade crypto, where you purchase tokens and store them either in your own crypto wallet or one controlled by someone else, such as a crypto exchange. Here at Nemo Money, we’ve put together a guide on how you can trade crypto using CFDs, or ‘contracts for difference’.
CFD trading is when you speculate on the price of an asset, whether you think it will go up or down. This means traders can stand to make a profit without actually owning the asset itself. In CFD trading, you ‘buy’ or ‘go long’ if you think the asset will increase in value, or alternatively you ‘sell’ or ‘go short’ if you believe the price will drop. And if you’re correct in your prediction, you’ll earn a profit based on the value of your initial investment.
You can trade almost any kind of asset as CFDs - today we’ll be focusing on crypto specifically. There are a number of benefits to choosing to trade cryptocurrency this way.
Easy withdrawal 💸
When trading crypto as CFDs, it’s actually easier to access your earnings or withdraw your investment than it is when you buy crypto tokens. This is for several reasons.
Banks are sometimes reluctant to work with crypto exchange programs, meaning that sometimes attempting to withdraw your crypto earnings from one can trigger a reaction from your bank. The way that crypto wallets work makes it harder for the bank to do its due diligence to make sure that it’s a normal withdrawal, establishing the source of the funds.
When you trade crypto as CFDs, your funds are placed with your broker. Because all good brokers like Nemo Money are regulated, and will be trusted by your bank, it’s a much faster withdrawal process.
You also won’t be charged the network fees that are charged when trading crypto the traditional way - these transaction fees are paid to crypto miners every time tokens change hands.
Safe 🔒
Because CFD trading is regulated, trading crypto as CFDs means you benefit from protection that you wouldn’t get in the unregulated crypto market. Traders can access safeguards like fund segregation. Unlike crypto trading in the traditional sense, you’re also protected from the theft and hacking that people who own the valuable tokens can be targeted by.
Flexibility 🔀
CFD trading is super flexible, because you can speculate on falling prices as well as benefitting from rising prices. And because you aren’t buying the crypto itself, only predicting how the price might move, you’ll be able to trade cryptocurrencies that might themselves be priced too high to be an affordable investment.
Boost 🚀
When you trade CFDs, you can use leverage to trade contracts that are worth more while spending less. At Nemo Money, we call leverage ‘Boost’, and our crypto rates are X2, meaning that you can technically borrow the same amount as your investment. However, while it can lead to higher profits, traders should be careful with leverage, as it also increases the amount of risk you are exposed to. You should never invest more than you can afford to lose.
The differences between crypto and crypto CFDs
Tips for choosing a CFD broker
If you’ve decided to begin CFD trading, one of the first things you need to do is choose a broker.
- It’s essential that your broker is regulated, to protect traders and investors and to make sure that they are compliant with legal requirements in the country or countries they operate in. Nemo Money is regulated in Abu Dhabi by Abu Dhabi Global Market (ADGM) FSRA (Financial Services Regulatory Authority), one of the country's best regarded regulators. We’re also backed by Exinity, a company with more than 25 years of experience in FinTech.
- Next, check out the spreads at your chosen broker or platform. The spread is the difference between the price you buy the crypto CFD at and the price at which you sell it, and this will vary across different providers. At Nemo Money, our spreads are extremely competitive: we charge roughly $1.20 to Buy, then Sell, one whole unit of Bitcoin. The equivalent to a commission of 0.0006%! Or put it another way if you bought, then sold, $1,000 of Bitcoin you would be charged $0.006 (less than one cent!)
Of course, there are also reasons why some people might choose to trade cryptocurrency itself rather than as CFDs. One reason is that CFDs are not available in every market, with the US and Hong Kong being two countries that do not allow this kind of trading.
The crypto market in 2025
Trading crypto as CFDs might be an interesting opportunity for the present moment. Donald Trump has promised to support cryptocurrency as the US’s first “crypto president”. The new leadership of The Securities and Exchange Commission (SEC) has announced the establishment of a task force to develop a regulatory framework for digital assets, indicating that crypto will continue to gain greater credibility in America.
Bitcoin recently rose to all-time high prices, reaching $109K in January before dropping back down to nearly $88K. Ethereum, the world’s second largest cryptocurrency, is currently trading at close to $2.4K.
With the high prices of these popular cryptocurrencies as well as the continual volatility of the market, those who are curious about exploring trading crypto might like to learn more about CFDs and how they can use this trading method to get involved in this exciting market.
At Nemo Money, we have a helpful ‘Learn with Nemo’ section on our app where you can find out everything you need to know about trading and investing. New users can also grab our registration bonus up to a maximum of $50 on first deposit. Terms and conditions apply.
