CMC Markets Launches Cryptocurrency CFDs and Spread Bets

CMC Markets’ customers can now trade Bitcoin and Ethereum either as a ‎spread bet or as a ‎contract for difference.

London-based spread better and trading provider CMC Markets ‎‎(LSE: CMCX) today‎ became the latest FCA-regulated broker to add a ‎cryptocurrency derivative product to its trading platform, giving its investors the added advantage of tax free profits when trading the digital asset.

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CMC Markets’ customers can now trade Bitcoin and Ethereum either as a spread bet or as a ‎contract for difference (CFD), with access to margin ‎and financing, as well as the ability to take both long and short positions. ‎This often requires the brokerage to establish liquidity relationships with multiple ‎exchanges to produce a volume-‎weighted average price for its instruments.‎

There has been rapid growth in UK-based CFDs and spread betting providers looking to cash in ‎on the meteoric rise of cryptocurrency – including Admiral Markets, Plus500, Gain Capital’s City Index, ‎and many others.

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The firms likely turned to CFDs as a ‎way of offering cryptocurrency trading due to the difficulty in hedging positions in the real ‎markets which always makes this derivative type a prime alternative to many underlying ‎assets.‎

However, the FCA cautioned investors over cryptocurrency CFDs in November, labelling them “extremely high-risk, speculative products”.

CMC Markets plans to initially ‎roll out cryptocurrency spread bets and CFDs only to its professional client base, but may expand the offering to its global customers later in the year.‎

Commenting on the launch, Grant Foley, chief operating and financial officer at CMC Markets, ‎said: “With the cryptocurrency market growing rapidly over the past ‎‎12 months, we have received significant interest from our clients for bitcoin ‎and ethereum CFDs. As a result, we have developed a new offering for this ‎unique digital asset class. We recognise that cryptocurrencies can be ‎regarded as a volatile market, so we are initially only offering trading, on an ‎exclusive basis, to our experienced professional client base.‎”

‎He added: “We have built our bitcoin and ethereum cryptocurrency offering with our ‎clients in mind. Like all other financial instruments we offer, we always ‎recommend that clients understand the risks and conduct thorough research ‎before trading.”‎

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