The proliferation of Cryptocurrencies and their move into mainstream finance and investing has disrupted the entire financial services industry.
Finance Magnates spoke with Alexander Geralis, who laid out cTrader’s crypto accounts as well as their benefits for both brokers and their respective traders in an in-depth interview.
It goes without saying that cryptocurrencies are taking over the world, and we hear that cTrader is introducing cryptocurrency accounts, which do not require the standard procedure of fiat conversion. Could you tell us how cryptocurrencies are making it easier for the players of the trading arena?
A lot of investors already make use of cryptocurrencies, and yes, the trend is definitely continuing. Crypto offers excellent risk/reward opportunities and that is why many traders are demanding crypto in one form or another - the light demand being crypto deposits.
As we speak, more and more brokers are making crypto CFDs available to fit the demands of their traders, and the number of pairs available is vastly growing. So there are two examples of demand right there!
When we see this, it is undeniable that the asset class is cemented and that any serious broker needs to accommodate crypto demand in one way or another in order to remain competitive.
Our way of supporting our cTrader family of brokers in this sense, is the introduction of crypto accounts.
Cryptocurrencies are usually quite volatile, especially when we compare them to fiat. What do bull and bear markets mean for cryptos as a deposit and withdrawal method?
True, cryptocurrencies do encounter high volatility. While some traders prefer to stick to stable coins (which, to a large extent, is no different than sticking to USD or EUR), there is also a large market share of traders in the crypto space, who wish to attain FX/CFD exposure, but with the end goal being to grow their BTC account, as opposed to focusing on USD value.
Additionally, we must not forget that where there is volatility, there is also trade opportunity! Typically, in crypto bull markets - this type of traders will want to trade crypto, and in a crypto bear market - to look for other opportunities.
Many brokers and traders are now also preferring cryptocurrency deposit methods to the classics of wires, bank transfers and credit card Payments . From your perspective, what could the reason behind it be?
The reasons behind this are numerous. First off, when it comes to cryptocurrency deposits, both brokers and traders benefit from lower fees and immediate transactions.
Also, as crypto becomes more and more accepted, both regulators and traders are starting to grow more confident in the asset class as a transactional means, and brokers can’t possibly not strive to correspond to this new-found demand.
Just remember the last bull market of 2017, and look where we are now! Last but not least, there of course remains the withholding period issue, which ceases to exist with crypto.
Could you please elaborate on the “withholding period” term? Why does it occur and how does it become an issue for brokers and their traders?
Simply put, PSPs impose a withholding period that can squeeze the broker depending on where most of his deposits are coming from. The withholding period depends on a number of various factors, but mostly geographic location.
During this period, PSPs essentially ‘lock’ the broker's funds until the period has passed, leaving them with less cash flow and the risk of the PSP going under during the withholding period.
With crypto deposits, on the other hand, it is impossible to chargeback, so not only is there no reason to withhold, but also the broker can control his own wallet and does not need to entrust a third party when it comes to transactions.
Going back to cTrader’s cryptocurrency accounts, could you please tell us a little more about them? How will this work?
With the new cryptocurrency-based accounts, traders will no longer need to undergo the lengthy process of selling crypto to fiat, then sending funds to their account, and then depositing the sum into their brokerage account.
They will be able to not only deposit, but also realize their PnL directly in crypto. Many crypto traders are not interested in their USD PnL, but instead judge their performance purely on BTC PnL.
Some also take USD PnL into account, which can be done with the click of a button. The addition of these accounts makes it possible to give them all - FX/CFD exposure, crypto funding options and crypto PnL.
It is also wise to note that cTrader is the only platform with 8-digit-decimal accuracy as opposed to just 5. As the price of BTC rises, it goes without saying that each decimal point will become increasingly important to market players. We are the first FX/CFD platform provider to offer this level of precision.
Impressive indeed! Does cTrader have any other upcoming features we should be excited for?
Always! Major releases are actually coming soon. In fact, we are talking about what is known as a “super release”. Our next charting release will be the largest charting update we have done in a very long time.
Today there are good charting solutions available, but even so we feel we can add a cTrader edge to traders’ charting and analysis, and are looking forward to delivering something special even for traders who do not currently have cTrader accounts with our brokers.
