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Cryptocurrencies are being embraced as a payment method even by some of the world’s leading brokers. Here’s a list of some of the most established brands allowing their clients to make deposits and withdrawals with cryptocurrencies.
|License||CySEC, ASIC, IFSC, FSCA|
|Trading platforms||MT4, MT5, FBS Trader|
|Maximum leverage||1:30 for EU and Australia, Up to 1:3000 for other jurisdictions|
|Accepted cryptocurrencies||Bitcoin, Bitcoin Cash, Ethereum, Tether, Litecoin|
FBC is a broker that fully embraces cryptocurrencies. Clients are able to trade digital currencies through a dedicated Crypto account. Founded in 2009, FBS is also a broker with an impressive array of licenses. In addition to the EU, FBS is also authorized in Australia, South Africa and Belize. All clients of the broker can start trading with a low amount between 1 and 10 USD and use the advanced MetaTrader platforms or FBS’s own mobile app. But the ability to make deposits using cryptocurrencies may be limited depending on exactly which group company you are a customer of.
|License||FCA, CySEC, FSCA, FSCM|
|Minimum deposit||£/$/€ 10|
|Trading platforms||MT4, MT5|
|Maximum leverage||1:30 in EU and UK, 1:2000 in SA and MU|
|Accepted cryptocurrencies||Bitcoin, Ethereum, Litecoin, Dash|
FXTM is another well established and award winning forex and CFD broker operating in the EU, UK and South Africa. The group also has an offshore subsidiary in Mauritius. This broker impresses with an extremely wide range of payment methods that extend from local bank transfers to the most popular cryptocurrencies. Beginner traders can use a Micro Account with a low minimum deposit, but the required initial investment for more advanced traders is relatively high – 500 USD. If local regulations do not prohibit it, FXTM clients can benefit from prize games and a referral bonus if they bring on a new client for the broker.
|License||ASIC, CySEC, SVG|
|Trading platforms||MT4, MT5, Iress|
|Maximum leverage||1:30 in Australia and the EU, 1:500 for other jurisdictions|
|Accepted cryptocurrencies||Bitcoin, Ethereum, Litecoin, Tether, Dash, TrueUSD, Pax Dollar, XRP, USDC, Doge, Chainlink|
Among established global brands, FP Markets probably offers the most diverse options for depositing and withdrawing funds via cryptocurrencies and stablecoins. FP Market is a well-established broker, operating since 2005 and offering its services in some of the most strictly regulated jurisdictions in the world – EU and Australia. Like all of its competitors, the broker is also active in emerging markets in Africa and Asia through an offshore division. In addition to the industry-standard MT4 and MT5 platforms, FP Market offers professional traders another advanced software – Iress.
|Trading platforms||MT5, MT4|
|Maximum leverage||1:30 for EU, 1:500 for other jurisdictions|
|Accepted cryptocurrencies||Bitcoin, Ethereum, Tether, Litecoin, Doge|
OctaFX is another industry-leading broker, though it is licensed by only one regulator – Cyprus Securities and Exchange Commision. OctaFX C does not offer Micro accounts, but the required minimum deposit of 100 currency units is not high. Clients of the offshore branch get access not only to higher leverage and optional bonuses, but also a lot of cryptocurrency payment options – Bitcoin, Ethereum, USDT, Litecoin and Dogecoin. But those using the Cyprus company’s services are limited to conventional payment methods.
|License||FCA, CySEC, CMA, DFSA, FSCA|
|Trading platforms||MT4, MT5, HFM Platform|
|Maximum leverage||1:30, 1:1000 for HFM South Africa|
|Accepted cryptocurrencies||Bitcoin, Ethereum, Tether, Litecoin|
HFM, previously known as HF Markets, is a reputable international broker that has been on the market since 2010. Broker clients in the United Kingdom do not have access to trade and transaction in cryptocurrencies due to local regulations. Other clients can deposit various cryptocurrencies through processors such as BitWallet and BitPay. Access to bonuses and promotions again depends on whether you are a client of the broker’s regulated or offshore legal entity.
Cryptocurrencies: advantages and disadvantages
Cryptocurrencies are still controversial, but undeniably have become an integral part of monetary transactions. A decade ago, Bitcoin, the original cryptocurrency based on blockchain technology created by the semi-mythical Satoshi Nakamotoi, became a legitimate part of the forex trade.
Nowadays, Bitcoin and other well-established cryptocurrencies such as Ethereum are accepted as payment methods by a number of forex and CFD brokers, including some of the industry’s leading brands. Despite the turmoil in the world of cryptocurrencies over the past months, it seems that their role as an alternative payment method will not diminish in the foreseeable future.
As a decentralized payment system relying on cryptographic algorithms instead of a centralized authority like a central bank, cryptocurrencies have both advantages and disadvantages.
The obvious advantages of digital currencies are precisely that they allow transactions to take place completely independently of traditional payment systems, which are subject to numerous restrictions and monitoring imposed by national and international institutions.
Crypto transactions only require access to an internet connection and the creation of a crypto wallet. From the forex brokers’ point of view, this means they can expand their customer base. And it’s not just crypto enthusiasts who insist on using this payment method.
Cryptocurrencies are a viable and sometimes the only alternative in countries and regions where the infrastructure for conventional payment methods such as credit/debit cards or wire transfer is not available or sufficiently developed. Thus, cryptocurrencies open the door to participation in financial markets for people who have the necessary capital and knowledge but are limited by the low economic and infrastructure development of their countries.
It is also clear that in many cases digital currencies allow circumvention of sanctions regimes and bans imposed by local financial regulators. Of course, this freedom of action has a shadowy side. There are financial scammers who take advantage of the fact that cryptocurrencies allow a degree of anonymity, circumvention of regulatory oversight, and last but not least, do not allow for refunds or chargebacks to be requested. The collapse of several major crypto exchanges over the past year has also highlighted the risks of using digital currencies to hold savings and make payments.
As with trading crypto CFDs (Contracts for Difference), the main risk in cryptocurrency payments is related to high volatility. The value of even the most popular and widely used cryptocurrencies like Bitcoin can change more sharply and dramatically than any other financial asset.
This is why even offshore brokers allow significantly lower leverage when trading cryptocurrencies. Financial regulators in the European Union and other leading markets such as Australia limit leverage when trading crypto derivatives to just 1:2, compared to 1:30 when trading major currency pairs. In the US and Canada, the limit is slightly higher at 1:5. Other regulators such as the United Kingdom’s Financial Conduct Authority are even more critical of cryptocurrencies and prohibit brokers licensed in the country from offering cryptocurrency trading to retail clients.
Large amplitudes in the value of cryptocurrencies also affects the price paid for transactions. While there is no service fee paid to a payment processor for crypto transactions as with credit cards or bank transfers, they are not free. The price paid for cryptocurrency transactions depends on a number of factors. Let’s take a look at how fees are determined for the two most established cryptocurrencies, Bitcoin and Ethereum.
The fee paid is embedded into the transaction – senders automatically pay a fee when transferring bitcoins from between wallets.
With Bitcoin, the users known as “miners”, who install open source software to generate coins, turn their computers into network nodes. Nodes link up with other nodes to validate transactions. This process adds new data blocks and synchronizes the new state of the public ledger — the Bitcoin blockchain. When new data blocks are added, miners receive Bitcoin block rewards. The fee size is dependent on the network throughput, daily traffic, and Bitcoin block size. Since 2017 the Bitcoin block limit size is 4MB.
In April 2021 the Bitcoin fee reached a record high of 60 USD per transaction. At the time of writing this review, however, it is ten times lower.
Transactions with Ethereum are subject to a so-called “gas fee”. In September 2022 shifted from a proof-of-work to a proof-of-stake consensus mechanism. Ethereum taxis are therefore paid to validators, not miners. Like with Bitcoin’s miners, Ethereum’s validators are in charge of validating transactions, so they are added as new blocks. Every time that happens, validators receive a gas fee.
When calculating the ethereum charges, the “gas unit” is used. This is the limit set by the user on how much they are willing to pay for a transaction. Depending on the type of transaction, ranging from simple transfers to complex lending operations, there is a minimum limit for transactions to go through.
Another element of the charge is the base fee, the minimum gas needed for a transaction to be included into a new block. After the changes introduced in August 2021, the gas charge is calculated according to the following formula: Gas fee = gas units x (base fee + tip).
Gas fees are paid in Ethereum’s native currency, ether (ETH). Gas prices are denoted in gwei, which itself is a denomination of ETH – each gwei is equal to 0.000000001 ETH. At the time of writing this review, the average cost per transaction is around 23 million gas, down significantly from levels a year ago.