Online recommendations can be confusing to CFD traders looking for the best cryptocurrency trading platforms. While some expert researchers recommend the best CFD cryptocurrency brokers, others list crypto exchanges, thus leaving many cryptocurrency traders at crossroads trying to figure out the best options. Based on our analysis, we believe that CFD crypto brokers are safer than exchanges for the following reasons.
- Regulations/Cyber Threats
Cryptocurrency exchanges are not regulated, thus making them prone to cyber-attacks compared to crypto brokers. This does not mean that hackers will not try breaching brokers’ platforms, but the chances of them succeeding is very minimal. We have heard many cryptocurrency exchanges getting hacked, such as KuCoin, Coinbase, etc. Even Binance and other top exchanges are often targets of hackers.
Note that cryptocurrency brokers are highly regulated by world-recognized authorities such as the Financial Conduct Authority (FCA), Australian Securities and Investment Commission (ASIC), etc. Brokers operating under such authorities guarantee the safety of your funds since they are under state watchdogs’ protection.
- Registration Process
The procedure for registering for an account on both CFD crypto brokers and exchanges is pretty straightforward. Plus, brokers and exchanges will require you to verify your details before trading. However, the broker account verification procedure is more stringent, thus eliminating the likelihood of registering fraudsters. You will be required to share a copy of your original ID and provide proof of your income and location by sharing your employer’s details and a copy of a recent utility bill or bank statement.
Regarding CFD crypto exchanges, verification procedures vary, and there is no standard account verification protocol. For instance, some exchanges only verify your email and phone number using passcodes. Others, on the other hand, especially advanced exchanges, will request for you to send your picture holding your ID card and request a video chat before fully activating your account. Therefore, you must be keen when searching for a crypto exchange to avoid choosing one with limited security measures.
- Trading Methods
Although CFD cryptocurrency traders look for the best platforms to trust and trade, it is paramount to consider the safety of your funds and diversify your portfolio across different markets. Sadly, cryptocurrency exchanges only list crypto assets to trade. Remember, the crypto market is highly volatile, and you still risk losing money by diversifying your portfolio on various crypto assets.
With brokers, not only can you trade CFD cryptocurrencies but also other assets, including forex, stocks, commodities, etc. Note that several factors affect the financial market, meaning that when the crypto market is highly volatile, other markets may bring about profits and cover losses incurred in the crypto market.
Brokers for CFD Cryptocurrency Trading
Now that you know how secure CFD crypto brokers are compared to exchanges, you probably must be wondering where to find the best ones to trade with. You must conduct market research by thoroughly testing and comparing as many CFD crypto brokers as possible within your region. Consider your cryptocurrency trading needs, such as fees, asset availability, platform performance, and more, to ensure you find the best.
Alternatively, go to expert recommendations websites like https://tradingguide.co.uk/awards/trading-platforms/ to choose the best CFD crypto brokers. While you should trust such recommendations, conduct additional research on a broker you select before you start using it to trade the crypto market. The best CFD crypto broker will increase your chances of succeeding in cryptocurrency trading, so choose wisely.
While CFD crypto brokers are safer than exchanges, it doesn’t mean that you shouldn’t consider exchanges in your activities. Exchanges also have their own benefits, such as offering a vast selection of crypto assets. They also charge lower CFD cryptocurrency fees than brokers, making them an excellent option for low-budget traders. However, crypto brokers are your best bet if you prioritize security above everything else. You simply have to understand the crypto asset you want to trade and ensure you find a broker with features and trading tools matching your skill level.