Multi-regulated retail FX broker FXTM has become the latest firm to extend its contracts-for-difference (CFD) offering to cryptocurrencies, following the lead of several brokers that have recently added the virtual assets to their instruments list.
The step confirms that there is significant demand amongst traders for such derivative products, with the launch coming shortly after Cypriot regulator CySEC outlined a set of rules on offering crypto CFDs.
The list of brokers that have launched cryptocurrency trading pairs in recent months includes Ayondo, Plus500, Avatrade, FXOpen, XTB, JFD Brokers, Instaforex, and many others. Throughout October, more and more brokers made announcements about new cryptocurrency-related offerings, like Saxo Bank adding an Ethereum tracker to its platform, RoboForex adding CFDs on BTC/USD and ETH/USD, and Tickmill entering the cryptocurrency market. As such, it is likely that more retail platforms will follow suit to avoid falling behind their competitors.
FXTM’s new cryptocurrency offering gives clients trading exposure to three of top digital currencies; BTC (Bitcoin), ETH (Ethereum) and LTC (Litecoin).
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The company has 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.
By trading cryptocurrencies in the form of CFDs, traders have the opportunity to invest in their price without having to actually buy them. Furthermore, they can take advantage of a wide array of traditional trading tools such as leverage and stop orders.
FXTM is a CySEC-regulated multi-asset online broker. It appeared in the news this year because of its high profile sport sponsorship deals – it began sponsoring a Formula One team in February, and then signed a deal with tennis star Dominika Cibulková in July.
Jameel Ahmad, FXTM’s Global Head of Currency Strategy and Market Research, commented: “There is some debate over the sustainability of current cryptocurrency rallies. However, I think the early enthusiasm for this innovative asset is a reaction to one of the most interesting developments the financial markets have seen in years. Their volatility is often precipitated by knee-jerk reactions from regulators and market sentiment, but cryptocurrencies should become more stable when regulators and governments have figured out how to integrate them into the current financial system.”
He continued: “A number of Central Banks, including the Bank of Russia, South African Reserve Bank, Belarus Central Bank and Sweden’s Riksbank have all signaled interest in cryptocurrencies and blockchain technology. A consortium of Japanese Banks are reportedly developing a national digital currency that will be launched in time for the 2020 Olympics. Cryptocurrencies will eventually find a permanent niche in financial markets. As a broker dedicated to delivering exceptional customer service and market-leading products, FXTM is proud to be one of the first to embrace cryptocurrency trading instruments in the MetaTrader platforms.”