Cryptocurrency trading has taken the world by storm over the past years, and ECN brokers have also jumped on the trend as they try to capture a part of this growing niche among traders. However, traders should be aware that the cryptocurrencies offered from ECN forex brokers are generally not “physical” cryptocurrencies like the ones that can be bought from a crypto exchange. Instead, the instruments offered are contracts-for-difference (CFDs) that track the price of the underlying “physical” cryptocurrencies.
Although a trader does not own the underlying cryptocurrency when trading crypto CFDs, there are several benefits with trading CFDs. For example, CFDs come with built-in leverage that makes it possible to boost one’s potential for profits (and losses). CFDs also make it much easier to short cryptocurrencies, and thus profit from falling prices in these volatile digital assets.