Darwinex announced this Wednesday that they would be launching contracts-for-differences (CFDs) on cryptocurrencies. The broker, which is regulated by the UK’s Financial Conduct Authority, is the latest in a string of firms to announce the launch of cryptocurrency-based CFDs.
“Cryptocurrencies were an obvious asset class to offer,” said Juan Colon, Darwinex’s CEO. He further cited “the growing maturity of the market” and “the appetite we are seeing for trading strategies on these underlyings” as justification for the launch of the new products.
Traders will be able to access the new CFDs on MetaTrader 4. Clients who have chosen to upgrade to the MetaTrader 5 platform will also be able to access the cryptocurrency CFDs via the newer version of the trading platform.
Liquidity for the cryptocurrency CFDs will be provided by LMAX Global, a trading facility operator. Whether the firm will be able to provide sufficient liquidity remains uncertain.
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A report released Tuesday suggests that the cryptocurrency market is astonishingly illiquid. It was in part due to this illiquidity, as well as its volatility that many brokers stopped offering CFDs in cryptocurrency as early as last December.
Darwinex does not appear to have been phased by this as it goes ahead with its product launch. Today’s announcement follows on from a string of new product offerings by the firm. In the past few months, the firm has upgraded to MetaTrader 5 and also introduced single stock CFDs.
Darwinex is slightly different to most of its competitors in the retail trading space as it focuses heavily on social trading. It provides a thorough risk assessment of each strategy so that other traders can decide whether to follow, or potentially even copy, a given trading strategy.