The trading volume on Axi with crypto contracts for differences (CFDs) soared to US$16.7 billion in March, the broker revealed exclusively to Finance Magnates. The figures stood at US$7.6 billion in January and US$10.4 billion in February.

“We saw a pretty decent amount of crypto volume growth month-on-month from January and a huge increase in the last five or six months,” said Louis Cooper, the Chief Commercial Officer at Axi. He added that the broker executed 1.5 million crypto CFDs trades last month. As much as 10 percent of the trades executed in March were crypto trades.

A Significant Increase in Crypto CFDs Volume

The monthly crypto CFDs volume on Axi for March marked a tenfold increase from the average of the three months between July and September, the first quarter of the ongoing fiscal year.

As reported earlier by Finance Magnates, the monthly crypto CFDs volume on Axi ranged between AU$1 billion (approximately US$0.7 billion) and AU$2 billion (US$1.3 billion) for most of 2023. In December, the volumes surged dramatically to reach up to AU$6 billion (about US$4 billion), continuing the growth trend.

The growth can be attributed to 25 percent of Axi’s active client base, translating to over 9,000 traders, who traded crypto CFDs, marking a threefold growth from the first quarter of the fiscal year.

The CCO of the brokerage highlighted that “as an asset class, we now have more active Crypto CFD traders than we do trading Index CFDs and Futures.”

He further revealed that markets in Asia and the Middle East have a “big concentration of volume and customers,” although “there is a huge amount of activity happening in other parts of the world, too.”

He added that “the vast majority of the growth came from our current clients who migrated towards crypto CFDs because of a moving market and increased volatility.”

“We're seeing new customers who are joining to trade crypto CFDs as their first. Although that's growing, it's still the smaller percentage.”

The Growing Demand for Crypto CFDs

Axi offers crypto CFDs featuring “30 of the most popular cryptocurrencies,” including Bitcoin, Ethereum, Litecoin, Ripple, and Bitcoin Cash. Cooper revealed that 96 percent of the crypto trading volume on Axi comes from Bitcoin CFDs.

“The approval of Bitcoin exchange-traded funds (ETFs) in the US has been a huge instigator of the growth of crypto,” said Cooper. “It's a validation of regulation in the US, and this is also a mark of perception from the market that there will be more institutional flow going into cryptos and particularly Bitcoin.”

Other factors that have propelled the demand for crypto CFDs are the upcoming halving event and “price stability,” according to Cooper. “By its own standards, BTC has been incredibly stable the last 6 months,” he added. “Clients are attracted to BTC/USD because there is enough volatility for speculation, but it’s not as daunting as it was 12 to 24 months ago to speculate using leverage.”

Crypto CFDs are over-the-counter leveraged derivatives that allow traders to speculate on prices by taking either long or short positions. Although other crypto derivatives offer leveraged trading, the leverage with CFDs can go higher. Axi offers a maximum of 200:1 leverage on its crypto CFDs.

“Commissions are pegged to the asset price, so transactional costs would have doubled over the last quarter,” Cooper highlighted the advantages of trading costs with crypto CFDs. “We have resisted increasing our spreads as much as we can, which has given us a competitive advantage and our clients a trading edge trading CFDs vs. Perpetual Futures.”

“The costs, particularly cost to hold, are more transparent – with CFDs, you get one overnight fee based on your borrowing, for perpetual swaps, you get charged every 8 hours based on market volatility and trading demand – this can be quite low when markets are quiet but equally more expensive when the markets are moving (which arguably is when clients want to trade).”