Cryptocurrency CFDs in the UK Professional Clients Only

Cryptocurrency CFDs are available through FXOpen UK to eligible Professional Clients only. They are not available to Retail Clients.

About cryptocurrency CFDs

This page provides general information about cryptocurrency CFDs, including how they work, the markets they reference, associated costs and key risks. It is provided for informational purposes and is not intended to promote or encourage trading in cryptocurrency CFDs.

Professional Clients do not receive all of the regulatory protections that apply to Retail Clients. Professional Client status is subject to applicable eligibility and classification requirements. Clients should ensure that they understand the implications of their classification and the risks associated with cryptocurrency CFDs before entering into a transaction.

What are cryptocurrency CFDs?

A cryptocurrency CFD is a leveraged derivative contract that tracks the price of an underlying cryptocurrency. It does not give the client ownership of the underlying cryptocurrency.

Instead, the outcome of a cryptocurrency CFD transaction is based on the difference between the opening and closing price of the underlying market, subject to applicable costs and the terms of the relevant product.

Cryptocurrency CFDs are complex financial instruments. Cryptocurrency markets can be highly volatile, and leverage can magnify the effect of price movements. Losses can therefore occur rapidly and, for Professional Clients, may exceed the amount initially deposited.

How do cryptocurrency CFDs work?

A cryptocurrency CFD provides exposure to movements in the price of an underlying cryptocurrency without requiring ownership of the digital asset.

The value of a CFD position changes as the price of the underlying market moves. Depending on the product and transaction, a cryptocurrency CFD can provide exposure to either a rise or a fall in the price of the underlying cryptocurrency.

The result of a CFD transaction depends on the difference between the opening and closing price, together with any applicable spreads, commissions, financing charges or other costs.

Because cryptocurrency markets can experience significant price movements over short periods, the value of a cryptocurrency CFD position can change rapidly.

Cryptocurrency CFDs reference the price of an underlying cryptocurrency. The cryptocurrency market includes assets such as Bitcoin, Ether and other digital assets, each of which can have different levels of market capitalisation, liquidity, trading activity and volatility.

Bitcoin (BTC) is a decentralised digital asset that operates on the Bitcoin blockchain. Ether (ETH) is the native cryptoasset of the Ethereum blockchain, which also supports smart contracts and decentralised applications.

Other cryptocurrencies and cryptoassets have been developed for different purposes and use cases. Their characteristics can vary significantly, including in terms of technology, liquidity, market size and price volatility.

The cryptocurrency CFD instruments available through FXOpen UK are shown in the product information table above. Availability is subject to the applicable product terms and the client's eligibility as a Professional Client.

Cryptocurrency CFD risks

Cryptocurrency CFDs involve a high level of risk. The price of an underlying cryptocurrency can move significantly over a short period, and leverage can magnify the effect of these movements.

Key risks associated with cryptocurrency CFDs include:

Market volatility: Cryptocurrency prices can experience substantial and rapid movements.
Leverage: Leverage increases exposure to the underlying market and can magnify both gains and losses.
Liquidity: Some cryptocurrency markets may have lower liquidity than traditional financial markets, which can affect the execution of transactions and the prices available.
Rapid price movements and gaps: Prices can move significantly between available market prices, particularly during periods of heightened volatility.
Costs: Spreads, commissions, overnight financing or swap charges and other applicable costs can affect the outcome of a CFD transaction.
Market and regulatory developments: Changes in regulation, market conditions, technology or market infrastructure can affect cryptocurrency prices and liquidity.
Underlying cryptocurrency risks: Cryptocurrency networks, infrastructure and technology can be subject to operational, technological and other risks.
Potential for significant losses: For Professional Clients, losses on leveraged cryptocurrency CFDs may exceed the amount initially deposited.

Cryptocurrency CFDs do not provide ownership of the underlying cryptocurrency. Clients should ensure that they understand how CFDs work, the applicable costs and the risks involved before entering into a transaction.

Professional Clients and cryptocurrency CFDs

At FXOpen UK, cryptocurrency CFDs are available only to eligible Professional Clients. They are not available to Retail Clients.

Professional Client status is subject to applicable classification and eligibility requirements.

Professional Clients may not receive all of the regulatory protections that apply to Retail Clients, depending on the applicable regulatory requirements and client classification.

Cryptocurrency CFDs vs buying crypto

A cryptocurrency CFD is a derivative contract and does not provide ownership of the underlying cryptocurrency. Buying cryptocurrency is different because the purchaser acquires the digital asset, subject to the arrangement and custody model involved.

Cryptocurrency CFD	Buying cryptocurrency
A derivative contract based on the price of an underlying cryptocurrency	Acquisition of the underlying digital asset
Does not provide ownership of the underlying cryptocurrency	May provide ownership or control of the cryptocurrency, depending on the arrangement and custody model
The transaction is based on the difference between opening and closing prices	The value of the cryptocurrency held changes with the market price
Can involve leverage	Typically involves paying the purchase price of the cryptocurrency
May involve spreads, commissions and financing charges	May involve purchase, network, custody or other applicable costs

The regulatory treatment, risks and costs associated with cryptocurrency CFDs and directly holding cryptocurrency are different. Professional Clients should understand these differences before entering into a transaction.

Cryptocurrency CFD costs

The costs associated with cryptocurrency CFDs may include spreads, commissions and overnight financing or swap charges, depending on the applicable instrument and account conditions.

Current costs and contract specifications are set out in the relevant cryptocurrency CFD product specifications and trading conditions.

Professional Clients should review the applicable product information before entering into a transaction.

FAQs

Are cryptocurrency CFDs legal in the UK?

Cryptocurrency CFDs can be offered to eligible Professional Clients in the UK, subject to applicable regulatory requirements. They are not available to Retail Clients through FXOpen UK.

Are cryptocurrency CFDs available to Retail Clients in the UK?

No. Cryptocurrency CFDs are not available to Retail Clients in the UK. They are available only to eligible Professional Clients, subject to applicable requirements and product availability.

What cryptocurrencies can be traded as CFDs?

The cryptocurrencies available as CFDs depend on the products offered by your broker. FXOpen UK provides cryptocurrency CFD instruments to eligible Professional Clients, with current availability shown in the product information table.

Why are cryptocurrency prices volatile?

Cryptocurrency prices can be affected by factors including supply and demand, market sentiment, regulatory developments, macroeconomic conditions, news and media coverage, technological developments, changes to blockchain networks and infrastructure, and market liquidity.

These factors can contribute to significant price movements and increased market volatility.

What does Professional Client status mean?

Professional Client status is a regulatory classification subject to applicable eligibility and assessment requirements. Professional Clients may not receive all of the regulatory protections that apply to Retail Clients.

Clients should understand the implications of their classification before entering into transactions.

Important information

Cryptocurrency CFDs are available in the UK to Professional Clients only. They are not available to Retail Clients.

Cryptocurrency CFDs are complex, leveraged financial instruments and carry a high level of risk. Cryptocurrency prices can be highly volatile and losses can occur rapidly. For Professional Clients, losses may exceed the amount initially deposited.

Professional Clients do not receive all of the regulatory protections that apply to Retail Clients. Professional Clients should ensure that they understand the implications of their client classification, how cryptocurrency CFDs work, the applicable costs and the associated risks before entering into a transaction.

The information on this page is general in nature and does not constitute investment advice. Product availability, terms, costs and conditions may change.