There are two ways to get exposure to bitcoin or ether. Buying the coin means you own it: you hold it on an exchange or in your own wallet, you can transfer or spend it, and you are exposed to the price for as long as you keep it. A crypto CFD means you own a contract that pays the price change: no wallet, no transfers, the option to go short and to use leverage, but with daily financing costs and no ownership of the asset.
Key takeaways
- Owning crypto suits long holding periods; CFDs are usually designed for shorter-term positions.
- A CFD can be sold short; owning coins only benefits when the price rises.
- CFDs remove wallet and private-key risk but add exposure to the CFD provider.
- Holding a CFD for months usually costs more than holding the coin, because of overnight financing.
- Leverage on a CFD magnifies both gains and losses; a directly owned coin can fall in value but cannot trigger a margin call.
| Buying crypto | You own coins · wallet or exchange custody · no leverage by default · no daily financing |
|---|---|
| Crypto CFD | You own a contract · no wallet · leverage · short selling · daily financing |
| Taxes | Treatment differs by country and by product; seek local advice |
| At Marketsall | CFDs only; coins are not bought, stored or transferred |
Crypto CFDs vs buying crypto side by side
| Feature | Buying crypto | Crypto CFD |
|---|---|---|
| Do you own the coin? | Yes | No |
| Wallet or private keys | Needed, or the exchange holds them for you | Not needed |
| Can you transfer or spend it? | Yes | No |
| Short selling | Not directly | Yes |
| Leverage | None unless you borrow | Yes; limits apply |
| Main costs | Exchange fees and spread; network fees to move coins | Spread and daily financing |
| Cost of holding for months | Low | Can be significant |
| Staking rewards (ether and others) | Possible | None |
| Main operational risk | Hacks, lost keys, exchange failure | Provider risk, margin calls |
| Typical use | Long-term holding | Short-term trading and hedging |
Custody: keys vs counterparty
Owning crypto directly means someone has to hold the private keys that control it. If you hold them yourself, losing them means losing the coins permanently, and there is no one to call. If an exchange holds them, you depend on the exchange: several large platforms have failed or been hacked, most visibly FTX in November 2022, leaving customers unable to withdraw.
A CFD replaces that with exposure to the CFD provider. You have no keys to lose, but you depend on the provider’s financial health and on how client money is held. Ask how client funds are segregated and what protections apply under the provider’s licence; see what FSC Mauritius regulation means for traders. Negative balance protection applies to all Marketsall account types, so a leveraged loss cannot exceed the account balance.
What each costs over time (illustrative)
| Holding period | Buying bitcoin | Bitcoin CFD |
|---|---|---|
| One day | Exchange fee and spread in and out | Spread, plus one day of financing |
| One month | Same as one day | Spread plus about 30 days of financing |
| One year | Same as one day, plus any custody fees | Spread plus a year of financing, which can amount to a large share of the position |
| Moving the coin | Network fee | Not applicable |
Financing on crypto CFDs is usually charged at a higher rate than on currencies and may be charged every calendar day. Use the contract specification to check the current rate before holding a position for more than a few days. How financing works is explained in what a swap is.
Which approach fits which purpose?
| Your aim | Better fit | Why |
|---|---|---|
| Hold bitcoin for years | Buying | No daily financing |
| Take a view that the price will fall | CFD | Short selling is built in |
| Trade short-term moves | CFD | No wallet, fast execution, both directions |
| Offset the risk of coins you already own | CFD (short) | Hedges price risk without selling the coins |
| Use crypto for payments or applications | Buying | Only owned coins can be transferred |
| Earn staking rewards | Buying | CFDs do not receive them |
Leverage: the biggest practical difference
A coin bought outright can fall 50%, and you lose half your money, but you are never forced to sell. A leveraged CFD position of the same size can be closed automatically long before that, because the loss exceeds the margin. With crypto moving 3–5% on an ordinary day, even modest leverage makes forced closures common. Start with position sizing and how leverage increases trading risk.
What it costs to trade crypto as a CFD
This section covers the CFD side of the comparison. See what a CFD is.
| Cost | When it applies | Note for crypto |
|---|---|---|
| Spread | Every trade, at entry | Wider than on major currency pairs, in percentage terms |
| Commission | Depends on instrument and account type | Shown in the symbol specification in MetaTrader 5 |
| Swap / overnight financing | Positions held past the daily rollover | Crypto CFDs usually carry a higher overnight financing rate than currencies, and it may be charged for weekend days. |
| Slippage | Fast markets, gaps, news | Common in fast moves and at weekends when liquidity is thin |
Key risks
Financing adds up. CFDs are costly to hold for long periods.
Leverage. Margin calls and stop-outs can close positions during normal volatility.
Provider risk. Your position depends on the provider rather than on a blockchain record.
Gaps. Crypto trades when some CFD markets are closed. See gap risk.
Risk warning. Trading CFDs carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, the products offered on this website may not be suitable for all investors because of the risk of losing all of your invested capital. You should never invest money that you cannot afford to lose, and never trade with borrowed money.
How to trade crypto at Marketsall
Crypto CFDs available at Marketsall include BTCUSD. The others are ETHUSD, SOLUSD and XRPUSD; live prices are on the Cryptocurrencies page. Read the symbol specification for contract size, margin and swap rates before a first trade; how to read contract specifications on MT5 shows where they are. Practise on a demo account first, keeping in mind the differences covered in demo vs live accounts, and set the position size before opening the ticket with position sizing.
Frequently asked questions
What is the difference between a crypto CFD and buying crypto?
Buying crypto means you own the coins and must store them in a wallet or on an exchange. A crypto CFD is a contract that pays the price change; you never own the coins, need no wallet, can go short and can use leverage, but you pay overnight financing for as long as the position is open.
Is it cheaper to buy bitcoin or trade a bitcoin CFD?
For short periods a CFD can be comparable or cheaper, because there are no network or withdrawal fees. For long periods buying is usually cheaper, because a CFD charges overnight financing every day it is held.
Can you lose more than you invest with crypto CFDs?
Leverage means losses can exceed the margin placed on a trade. At Marketsall negative balance protection applies to all account types, so an account cannot fall below zero, but the whole account balance can still be lost.
Do you need a wallet to trade crypto CFDs?
No. A crypto CFD is held in your trading account and settled in cash. No coins are bought, stored or transferred, so no wallet or private keys are needed.
Can you short crypto without a CFD?
Shorting crypto without a CFD usually requires a margin account or derivatives on a crypto exchange. A CFD lets you open a short position directly in your trading account.
Related reading
Cost the holding period first
If the CFD route suits your aim, take the overnight charge on the crypto symbol, multiply it by the days you expect to hold, and compare the total with exchange and network fees. Where to find swap rates on MT5 shows where that charge is listed.
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