- What are cryptocurrencies?
- Can I trade cryptocurrencies at FOREX.com?
- What is Bitcoin?
- What is Ethereum?
- Can I trade cryptocurrencies on the MetaTrader trading platforms?
- What is a digital wallet?
- Do I need a virtual wallet to trade cryptos with FOREX.com?
- What is the minimum trade size for cryptocurrencies?
- Are cryptocurrencies traded on leverage?
- Can I short cryptos at FOREX.com?
- When are cryptocurrencies available to trade?
- What order types are available with cryptos?
- Is there a rollover/financing charge for holding cryptocurrencies overnight?
- How does FOREX.com price cryptocurrencies?
- What are the risks of cryptocurrency trading?
- What is a "fork"?
- What is FOREX.com’s policy on cryptocurrency forking?
What are cryptocurrencies?
Cryptocurrencies, often referred to as 'cryptos', represent a new breed of digital currency that operates independently of any government or central bank oversight. These decentralized monetary systems leverage advanced encryption techniques to create, manage, and transfer units of currency. Stored in secure online wallets, cryptocurrencies facilitate direct peer-to-peer transactions and can be used for purchases at a growing number of online retailers that accept them.
Can I trade cryptocurrencies at FOREX.com?
Yes, you can trade spot Bitcoin, Ethereum, Litecoin and Ripple with fixed spreads, low margin, competitive financing, and reliable trade executions. Cryptos are available on the FOREX.com and MT5 platforms, but not the MT4 platform. For more information, visit our Cryptocurrencies Trading page.
What is Bitcoin?
Bitcoin was the first decentralized cryptocurrency. Created in 2009, Bitcoin uses blockchain verification technology to secure and protect peer-to-peer transactions. Like other cryptocurrencies, Bitcoin is decentralized and not regulated by a central bank or any one government. For more info on Bitcoin, visit our Bitcoin Trading page.
What is Ethereum?
Ethereum is a popular open-source, decentralized cryptocurrency platform and operating system created in 2015 that uses blockchain technology for security. “Ethereum” or “ether” are both terms used when referring to the cryptocurrency generated by the Ethereum platform.
At this time, cryptocurrency trading is available on the MetaTrader 5 platform, but not the MetaTrader 4 trading platform.
If you already have a FOREX.com or MT4 account, you can request an MT5 account via the Account tab in MyAccountby selecting ‘Add an additional account’.
Once the request is approved you will receive an email confirming the account information. Please note, you can’t log in to MT5 using an MT4 account and vice versa.
What is a digital wallet?
Most cryptocurrencies are stored using a digital wallet, which is essentially an online bank account which stores cryptocurrencies.
Do I need a virtual wallet to trade cryptos with FOREX.com?
No, since you are not actually purchasing the cryptocurrency outright when you trade spot cryptocurrencies, there is no need to have a virtual wallet to store them.
What is the minimum trade size for cryptocurrencies?
Some cryptocurrency markets allow fractional trade sizes under 1 unit. Please view the Market Information Sheets in the FOREX.com platformsfor the most up-to-date details.
Are cryptocurrencies traded on leverage?
Yes, with margin requirements from 25%. This means that to trade 1 unit of a cryptocurrency, you only need 25% of the value of that unit to take a position. With increased leverage comes increased risk.
Please view the Market Information Sheets in the FOREX.com platforms for up-to-date details on margin requirements.
Can I short cryptos at FOREX.com?
Yes, shorting/selling is just as easy as buying with spot cryptocurrencies, unlike when you purchase cryptos outright.
When are cryptocurrencies available to trade?
You can trade cryptosat FOREX.com 24 hours a day, 5 days a week from 5pm ET Sunday to 5pm ET Friday.
What order types are available with cryptos?
Except for Trailing Stop Orders and Guaranteed Stop Loss Orders, all order types available on FOREX.com’s platforms can be used when trading cryptocurrencies. Cryptocurrency trading is not available on the MetaTrader 4 platform.
Is there a rollover/financing charge for holding cryptocurrencies overnight?
Yes, an overnight financing charge of 0.0411% is charged for every day that a position is held after the market close at 5:00 pm ET. Bear in mind that for short positions, the overnight finance charge is 0.0136%.
Overnight financing is calculated as follows:
Position size x Closing rate x Financing charge = Financing cost
| Position size | Direction | Closing rate at 5pm ET | Financing charge | Total overnight cost |
|---|---|---|---|---|
| 5 bitcoin | Long | 9400 | 0.0411% | $19.31 |
| 5 bitcoin | Short | 9420 | 0.0136% | $6.40 |
Cryptos are traded on multiple independent digital asset exchanges around the world and the diversity of these exchanges can mean that there are different prices for the same cryptocurrency at different times and in different regions.
FOREX.com offers competitive cryptocurrency pricing based on multiple pricing models and uses leading digital asset exchanges to provide a volume-weighted average price. You can view our pricing information on our Cryptocurrency Trading pageor in the Market Information Sheets within our platforms. Cryptocurrency trading is not available on the MetaTrader platforms.
What are the risks of cryptocurrency trading?
There are several factors that make cryptocurrency trading risky and crypto markets volatile. For example, one reason Bitcoin is a highly volatile market is due to demand surges for a finite number of Bitcoins (there is a limit of 21 million available), so prices can experience dramatic and significant surges.
The price of Bitcoin has surged 40,000% since its inception and one of the biggest risks to traders is this extreme volatility. Cryptocurrencies like Bitcoin and Ethereum are currently much more volatile than most traditional markets, and when excess volatility crashes, you can be faced with significantly larger losses than in other markets.
Because there is a limited amount of reputable digital asset exchanges and no single reliable price source, this could, in theory, cause the price of a cryptocurrency market to tumble sharply. Remember, cryptos are very new assets, so we don’t yet know how they may perform in a major financial crisis. Nobody knows whether any cryptocurrencies will ever become globally accepted or which ones may one day disappear or be overtaken by other cryptocurrencies.
It is also possible that certain governments may ban its citizens from holding all or specific cryptocurrencies, which may cause the price of said cryptos to collapse.
Furthermore, there is a possibility for large-scale cyberattacks on digital asset exchanges which are likely to have a strong, short-term impact on the prices of cryptos.
Investors involved in cryptocurrency trading should also be aware of the potential for a so-called “51 percent attack”. A 51 percent attack refers to one centralized crypto mining operation gaining over 50% control of the blockchain, which would allow the operation to reverse transactions, making the entire blockchain unusable with the effect that the future of that cryptocurrency might become questionable.
Remember that while this heightened volatility in the cryptocurrency markets brings opportunity, it also means a greater degree of risk. Understanding the market and managing your risk carefully with the use of stops and limits is crucial when trading cryptocurrencies. Like with any market, make sure you do your cryptocurrency researchand understand how and why the price of the crypto you’re trading moves before you start trading.
What is a "fork"?
A fork is a change to the software of the digital currency that creates two separate versions of the blockchain with a shared history.
Forks can be temporary, lasting for a few minutes, or can be a permanent split in the network creating two separate versions of the blockchain. When this happens, two different digital currencies are also created. Learn about FOREX.com’s policy on forking.
What is FOREX.com’s policy on cryptocurrency forking?
If a current cryptocurrency market splits into two new cryptocurrency units – for example, the current Bitcoin splits into two new Bitcoin units – this is known as a hard fork. When a hard fork occurs, we will generally follow the unit that has the majority consensus of cryptocurrency users and will therefore use this as the basis for our prices. In addition, we will also consider the approach adopted by the exchanges we deal with, which will help determine the action we take.
We reserve the right to determine which cryptocurrency unit has the majority consensus behind it.
As the hard fork results in a second cryptocurrency, we reserve the right to create an equivalent position on client accounts to reflect this. However, this action is taken at our absolute discretion, and we have no obligation to do so.
If the second cryptocurrency is tradeable on major exchanges, which may or may not include the exchanges we deal with, we may choose to represent that value, but have no obligation to do so. We may do this by making the product available to close based on the valuation, or by booking a cash adjustment on client accounts.
If, within a reasonable time frame, the second cryptocurrency does not become tradeable, then we may void positions that had previously been created at no value on client accounts.
Over periods of substantial price volatility around fork events, we may take any action we consider necessary in accordance with our terms and conditions, including suspending trading throughout, if we deem not to have reliable prices from the underlying market.
