Why crypto CFDs are positioned for a boom among investors: Interview with Libertex CMO Marios Chailis

Q: As the cryptocurrency market plummets, many are calling this the buying opportunity of a lifetime. Before they pull the trigger, though, an increasing number of would-be investors are now shopping around for a broker that allows them to keep more of their potential profits for themselves. In this context, what are you and Libertex doing to make sure you’re able to attract this new breed of savvy crypto buyers?

A: Well, for a long time, brokers and exchanges were making a killing from unfairly high levels of commission and transaction fees. And when we’re talking about currencies that were specifically developed to be easily and cheaply transferable globally, this just didn’t sit right with us. That’s why, ever since we began offering crypto CFDs, our commission has been among the lowest available on the market.

However, just last December, we decided to run a special crypto CFD scheme for the holidays where we removed all commission, swap and exchange fees for our retail users who have accounts on the Libertex Platform. The said scheme was intended to be exactly that, a limited-time deal for the holiday season, but the response from our clients was just so overwhelmingly positive that we decided to make it permanent. Now, Libertex CFD crypto retail traders will only have to pay the spread, i.e., the difference between the Bid and Ask prices for their chosen cryptocurrency.

We really hope that this will help us stand out from the crowd when educated traders start looking to buy or sell the current dip and begin picking brokers to facilitate this process. Increasingly, we are seeing potential clients shunning the fancy branding and marketing gimmicks rife in this industry and really delving down into the details, reading through terms and conditions, calculating which services offer them the best deal, and we believe that this latest move will set us apart from the competition.

Q: You mention the CFD crypto scheme for traders choosing to trade  CFDs on digital currencies with Libertex. Could you perhaps spell out for us clearly how much your Libertex retail clients are able to save versus other major brokers?

A: As I mentioned above, our new crypto CFD terms mean that our retail clients who have trading accounts with our platform, no longer have to pay commission, swap or exchange fees of any kind. Let’s take a standard Bitcoin CFD trade of €1000 as an example. When trading this amount with the Libertex platform, a user would actually be able to trade exactly €1000 worth of BTC CFDs and not a penny less.

On the other hand, other major brokers have fees such as swap fees for holding positions overnight. This can end up in the long run, reducing a €1000 trade to as little as €950. This can add up over time. For example, if Bitcoin rises 10 times in value over the coming months/years and you have a buy trade, your eventual return would be reduced to €9500, a €500 reduction (i.e commissions fees). That’s the equivalent of a new laptop, high-end smartphone or long weekend trip abroad.

And that isn’t even the extent of the damage, as swap fees are charged every single day the position is held. Then, you’ve got additional commission fees to pay when you wish to cash out your position. These little costs soon add up, and, in the end, a sizable portion of your hard-earned money ends up lining your broker’s pockets unnecessarily.

Q: That’s all well and good, but why would a serious crypto hodler want to buy or sell CFDs anyway? Why would they choose to buy or sell CFDs on cryptos with Libertex when they can own the coins themselves and store them in their own wallets or on dedicated exchanges?

A: Digital currencies are no longer the niche asset class they once were. The market isn’t populated exclusively by tech-minded early adopters and crypto aficionados anymore. The coronavirus crisis was a real turning point for the entire cryptocurrencies space as institutional investors finally took the plunge and started adding legacy coins to their portfolios.

Indeed, El Salvador has even made Bitcoin legal tender and is now looking to issue treasury bonds denominated in the digital currency. As a result, more and more traditional investors (think, Baby Boomers, supplementing their pension plan) are following the trend and diversifying their holdings to include a certain percentage of crypto. Just because they’re ready to accept Bitcoin as an investment vehicle doesn’t mean they’re ready to get to grips with dedicated crypto exchanges, hot wallets or cold wallet devices.

Naturally, it makes perfect sense for them to manage their crypto derivatives allocation in the same brokerage accounts as their blue-chip stocks, ETFs, gold and other CFD derivatives. If Libertex is able to offer them all that at the best possible price, it’s a no-brainer, really. Now that cost matches convenience, there’s no reason why people should choose the coins themselves over CFDs.

Q: But with crypto prices currently in freefall, is now really the right time to get involved with crypto in any way?

A: If your intention is to get the advantage of the price fluctuations then the best time to buy crypto is always right now. But in all seriousness, it is now generally accepted that major projects like Bitcoin and Ethereum are here to stay, and in this context, current prices are extremely attractive and volatile. Of course, there may be more downside ahead, but based on current general assumptions, it’s highly unlikely that we have already seen the top in this fledgling asset class. 

Even in the short term, it’s hard to see how the original cryptocurrency can fall much further than its current price of around $42,000. The intrinsic cost of mining 1 BTC stands at approximately $34,000 at present electricity prices and mining difficulty. It’s hard to see how mining difficulty can fall significantly given the huge $100 million investment by Marathon Digital in a farm of the latest 140 Th/s S19 XP ASICs. As such, these price levels could prove an excellent entry point for long-term Bitcoin investors. Of course, if you’re convinced that Bitcoin is destined for further declines, Libertex can offer you an opportunity to cash in on this eventuality, too. While it’s virtually impossible to short crypto, CFDs offer a perfect vehicle to bet on additional price drops. Just a thought!

Q: Thank you, Marios, for such an interesting and informative discussion on Libertex’s new cryptocurrency CFD terms and the digital assets market at large. It seems like you and the company are really making a statement on CFD cryptos with these changes to your policy. Before we part ways, could you tell us a little more about how you see this business unit developing over the coming years?

A: Like much of the trading community, we are genuinely excited by digital currencies and the potential of their underlying technology for the future. It’s like Web 3.0 and Finance 3.0 rolled into one. The trend is clear: more and more people from all walks of life are accepting crypto into their portfolios and their lives. That’s something that we are immensely happy about and keen to leverage for the company’s future growth. I see this as a crucial segment for Libertex, and we are doing all we can to position ourselves as a CFD crypto-friendly platform. These new lucrative terms and conditions for trading CFDs on digital currencies are just the beginning of this journey. All I can say at this stage is to watch this space: there will be lots of exciting developments to come in the years ahead!

About Libertex

Part of the Libertex Group, Libertex is a Broker regulated by the Cyprus Securities and Exchange Commission, offering tradable CFDs with underlying assets being commodities, Forex, ETFs, cryptocurrencies and others. Libertex also offers commission-free investments of real stocks.

Over the years, Libertex has received more than 40 prestigious international awards and recognitions, including “The Most Trusted Broker in Europe” (Ultimate Fintech Awards, 2021). Libertex is the Official Trading Partner of Tottenham Hotspur FC bringing the exciting worlds of football and trading together.

Since founded in 1997 the Libertex Group has grown into a diverse group of companies, brokers, dealers, educational and IT-development centres which allow the group to operate globally, serving millions of clients from over 120 countries.

For more information about Libertex visit www.libertex.com

75.3% of retail investor accounts lose money. Zero Commission fees on crypto CFDs are available for retail clients on the Libertex Trading Platform. Cryptocurrency instruments are not available to retail clients in the UK.