The current rage in cryptocurrency trading has been so dominant that numerous conventional Forex Brokers have joined the market by giving their clients passage to Cryptos like Bitcoin and Ethereum. These brokers that have traditionally offered currency pairs and CFDs and have been doing so with leverage levels that are more than 100:1.
Cryptocurrency brokers are giving much lower margin levels and understandably so due to the volatility of these products. If you do elect to trade cryptocurrencies with a Forex Broker be conscious of leverage levels that are equal the currency pairs. A responsible Broker would offer leverage on cryptocurrencies at 20:1.
There is another notable contrast between the Crypto Brokers like Polonex and Kraken and the Forex Brokers that offer Cryptos like eToro and SimpleFX. With a Cryptocurrency broker, you usually are depositing in a Crypto base currency ordinarily BTC or ETH. With the Forex Broker, you typically are depositing using a traditional bank, and the base currency is generally in dollars. The cryptocurrency product that one would trade with a Forex Broker is a feed of the cryptocurrencies usually provided by a liquidity source also known as an LP.
Since the crypto offering by the Forex Brokers is derivatives, they do not give the same level of trading transparency as a typical crypto broker that reports all the trades. One obvious downside to the crypto broker is the persistent risk of the broker getting hacked. Traders with any meaningful balances must use cold storage wallets to try and guard themselves.
Forex Brokers also offer the security and convince of deposits and withdrawals to traditional banks which most of us understand. A majority crypto brokers for various reasons only provide BTC or ETH deposits.
The cryptocurrency offering by Forex Brokers is a sound option for those traders that are not ready to make the full jump to an all crypto world.