21 April 2022

Are Crypto-CFDs playing a big part in investor portfolios?

Submitted by Tony Seifart

Are Crypto-CFDs playing a big part in investor portfolios?

With Cryptocurrencies continuing their rally and increase in popularity, it comes as no surprise that these have become an integral part of an investor’s portfolio. Traditional investment companies on Wall Street increasingly add multiple cryptocurrencies to their trade bundles. 

It was only a matter of time before Crypto-CFDs became a thing. The volatility of cryptocurrencies plays to the advantage of investors who focus on contracts-for-difference as it provides a quicker turn-around for trades. 

Investopedia.com defines a Contract-For-Difference as “a contract between a buyer and a seller that stipulates that the buyer must pay the seller the difference between the current value of an asset and its value at contract time. CFDs allow traders and investors an opportunity to profit from price movement without owning the underlying assets. The value of a CFD contract does not consider the asset's underlying value: only the price change between the trade entry and exit.” 

The multi-licensed global trading platform CAPEX.com has allowed its investors to trade in Crypto CFDs for quite a while now. “Whether you’re a sceptic or not, cryptocurrencies are not going to go away,” says Jack Edwards, Marketing Manager of CAPEX.com in South Africa. “We know people are nervous about the tax implications with HODLing cryptocurrencies, especially considering that the South African Revenue Service (SARS) has not yet made its position clear on how cryptocurrencies should be taxed. This makes trading in CFDs a lot more tax efficient. You are not physically holding any shares, so you do not have to pay a per-transaction tax. And the advantage of trading in the Cryptospace as a CFD instead of HODLing means even fewer tax worries.” 

“Trading in Crypto-CFDs allows our users a lot more flexibility, versatility, and certainty, especially when it comes to taxation,” continues Edwards. “Many more people are beginning to see Crypto-CFDs as a part of their portfolio.” 

As the world slowly emerges from a global pandemic and Europe enters into a volatile geopolitical situation, there has been a massive uptick in interest in Cryptocurrencies. Bitcoin grew a staggering 9% (source: coindesk.com) in March 2022 alone. 

With oil, natural gas, wheat, and vegetable oil showing significant volatility, traders have been moving funds into cryptocurrencies. “There’s also been a significant shift into Crypto-CFDs,” says Edwards. “While the world grapples with rising inflation and interest rates, investment firms are finding a particular niche growth in Crypto-CFDs.” 

Edwards cautions that investors should not simply emulate the investment strategies of major firms but to carefully consider their strategies based on their unique needs and outcomes. 

“Investors and speculators are increasingly bullish about the future expansion of crypto-currencies, with Crypto-CFD’s playing a significant role. There was a lot of speculation at Bitcoin 2022, held in April in Miami FL, that bitcoin alone could see prices nudge the US $1 million mark towards the end of the year. That’s a significant swing from the current US$40 000 trading value. We simply can’t ignore Crypto-CFD’s anymore.” 

If you are interested in trading in Contracts-for-Difference, visit www.capex.com and open an account. You can start trading with as little as $50 (R750 at current exchange rates). 

About CAPEX.com
CAPEX.com is a leading global trading platform providing its users with expert insights, tools, and resources to make markets accessible to a worldwide audience and offering a tailor-made trading experience. Its professional trading platforms, robust technological infrastructure, and transparent trading conditions have propelled it as one of the most respectable brokers on the international stage.

Anchored by a global presence and regional expertise, CAPEX.com holds operating licenses from Cyprus Securities and Exchange Commission, Abu Dhabi Global Market Financial Services Regulatory Authority, the Financial Services Authority (FSA) in Seychelles, and the Financial Sector Conduct Authority in South Africa. Visit their website for more details.

HIGH RISK INVESTMENT WARNING: Trading CFDs is highly speculative, involves a significant risk of loss and is not suitable for all investors. Before trading, you are strongly advised to read and ensure that you understand the relevant risk disclosures and warnings on our website.

Risk Disclosure: There is a substantial risk that you may lose all of your initial investment. We advise you to consider whether trading leveraged products is appropriate for you in light of your own personal circumstances. We recommend that you ensure you fully understand all risks involved before trading. Trading through an online platform carries additional risks.

Refer to our Regulation on our website: Za.Capex.com is a website operated by JME Financial Services (Pty) Ltd, an authorised Financial Services Provider and regulated by the Financial Sector Conduct Authority in South Africa under license no. 37166.

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