If you want to start spread betting on cryptocurrency, you’ll need to choose a spread betting broker that works for you. Below, you’ll find our review of some of the top spread betting brokers, along with the information you need to make an informed decision.
Where can I find the best crypto spread betting platforms?
Right here. We’ve done all the legwork and compared all the best spread betting platforms, so you can figure out which one to choose.
What is spread betting?
Spread betting involves speculating on the market fluctuations of an asset. Essentially, you’re betting whether the price of that asset (in this case a cryptocurrency, such as Bitcoin) will rise or fall from the bid and ask prices provided by a spread betting broker.
How does crypto spread betting work?
Once you’ve picked a spread betting broker, log in to your account and pick the cryptocurrency you want to speculate on. From there, check out the quoted buy and sell prices and decide whether you want to bet on the price of the cryptocurrency rising or falling.
Spread betting vs. CFD trading
Spread betting and CFD trading are similar practices. However, there are some differences. Let’s review how each approach works.
- Spread betting. This is a form of derivatives trading. You can use leverage in both spread betting and CFD trading. When trading with leverage, you only need to put down a fraction of the trade’s total value. Both spread betting and CFD trading allow you to bet on the price of an asset either going up or down. Spread betting’s biggest advantage over CFD trading (if you’re based in Britain) is that spread betting is exempt from capital gains tax in the UK, while CFD trading is not.
- CFD trading. A contract for difference (CFD) is an agreement between a buyer and seller that requires the buyer to pay the seller the difference between the current value of an asset (in this case a cryptocurrency) and its value at contract time. Aside from the tax regulations, the other big difference between spread betting and CFD trading is that spread betting is only available in the UK and Ireland, while CFD trading is available around the world.
So I don’t technically ‘own’ the assets I’m trading on a spread betting platform?
That’s exactly right. When spread betting, you’re betting on the price of a cryptocurrency either going up or down, but you never actually own the cryptocurrency in question. That means you don’t have to worry about digital storage or hackers. It also means you can trade faster and take advantage of market fluctuations to land gains.
What should I look for in a spread betting service?
- Find a regulated platform – The Financial Conduct Authority (FCA) oversees and regulates most reputable spread betting brokers in the UK. Whatever cryptocurrency spread betting platform you choose, make sure it’s regulated by the FCA.
- Variety of payment methods – Pick a spread betting platform that allows you to deposit and withdraw funds in whatever way best fits your needs. Bank transfers are a common way to fund spread betting accounts, but some platforms will accept newer payment methods, such as cryptocurrency.
- Suitable deposit and withdrawal limits – Different spread betting platforms offer deposit and withdrawal limits. Pick a spread betting platform that’s right for the the level of trading you want to do, whether it’s small bets or much larger value trading.
- Good reputation – User reviews are often the best way to gauge a spread betting platform’s reputation. Take the time to scrutinise those reviews so you know your chosen platform ticks all the boxes, from customer service to design and ease of use.
- Design and ease of use – Speaking of design and ease of use… UX is an important factor to consider when choosing a spread betting platform. The better designed a platform is, the smoother your user experience will be. Ease and speed of use are particularly valuable factors when the moment of truth comes and you’re ready to place a bet.
- Variety of cryptocurrencies – Whichever spread betting platform you choose, make sure it offers the variety you’re looking for. Most platforms will have crypto options that go well beyond just Bitcoin.
What are the tax laws on spread betting profits?
In the UK, spread bettors are not required to pay capital gains tax or stamp duty. That gives spread betting an advantage over CFD trading, stock investing, and buying physical commodities.
Is online spread betting safe and secure?
Spread betting is no different to CFD trading, stock market investing or other trading methods in terms of security. If you pick a reputable, regulated trading platform, your trades will be secure. Use our thorough spread betting broker reviews to find the one you like best.
Can I bet on multiple assets?
Yes you can. Spread betting lets you bet on multiple assets, in this case multiple different kinds of cryptocurrency. Plus you don’t need to worry about storing your crypto in a secure digital wallet, since you’re only betting on a cryptocurrency’s price fluctuation, rather than owning the cryptocurrency itself.
Do crypto spread betting platforms charge fees?
Spread betting platforms usually don’t charge fees, they make their money from the spread of your bet. The wider the price spread, the more money they make (and the bigger the gain you have to net just to break even).
What are the advantages of using an online platform?
Spread betting platforms allow you to make bets instantly. Choose the cryptocurrency you want to bet on, and the platform will handle the rest.
And what are the drawbacks?
In the crypto world, the term “HODL” has come to signify the big benefit that can come with owning currencies such as Bitcoin. Spread betting doesn’t allow you to actually own or hold crypto. Also, spread betting is more complicated than simply buying a physical asset at a certain price and selling down the road, so you’ll need more technical financial knowledge to take full advantage of a spread betting platform.
Should I use a spread betting broker?
That’s up to you. If you want to bet on Bitcoin quickly and simply without having to worry about hackers stealing it, using a spread betting broker is a great option.
Any questions? Check out our spread betting FAQ before you start trading.