Crypto CFD trading at Interactive Brokers

If you want to trade crypto, but do so in a safe way at a regulated entity and without having to deal with too much tech, crypto CFDs could be for you. So can you trade them at Interactive Brokers?

Unfortunately, Interactive Brokers doesn't offer crypto CFDs to trade. See our top broker suggestions for crypto CFDs below, along with the pros and cons of crypto CFDs for traders like you.

You cannot trade crypto CFDs at Interactive Brokers.

You cannot trade crypto CFDs at [Broker name].

Adam Nasli

Trading • Safety • Market Analysis

I bring extensive financial expertise as one of BrokerChooser's earliest team members. Personally, I tested nearly all 100+ brokers on our site, opening real-money accounts, executing trades, assessing customer services, and providing firsthand assessment. My professional background includes roles in the banking sector and a degree from Central European University, where I teach finance. My passions lies in in-depth research of the financial industry, building trading algorithms, and managing long-term investments.

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Adam Nasli

Trading • Safety • Market Analysis

During my years as a trader and broker analyst, I have tried crypto trading both on coin exchanges, and in CFD form at many online brokers. Here's what you need to know if you were eyeing Interactive Brokers as a place to try crypto CFD trading:

• Pick another broker for the chance to long and short cryptos as CFDs.
• CFDs are an easy way to trade cryptos: no need to deal with exchanges or wallets.
• Trading CFDs at regulated brokers gives you more security than most crypto exchanges.

Data updated on December 12, 2024

Instead of Interactive Brokers, we suggest you try one of these top brokers for crypto CFD trading:

• Pepperstone
• Capital.com
• Skilling

Interested in trading other CFDs besides crypto? Check out our list of the best CFD brokers in 2024.

So what's the difference between crypto CFDs and “real” cryptocurrencies? The biggest one is that crypto CFDs are a derivative product. This means you don't actually own the cryptocurrencies you want to trade (like Bitcoin or Ethereum); you merely speculate on the price movements of these assets. This is similar to other types of CFDs, which all have their own underlying product, such as stock CFDs or commodity CFDs.

Similarly to other CFDs, crypto CFDs are typically traded using leverage. This means that you can control a much larger trading position than the money you deposited. This can greatly amplify your gains, but also your losses. Read our overview of leveraged CFD trading to learn more.

Another advantage of crypto CFDs is the ability to short-sell the underlying cryptocurrency. Shorting means speculating on the price of the underlying asset to fall. When buying a “real” crypto coin, you can only make a profit if its price increases; this is called a long position. By contrast, the ability to short allows you to profit from a decrease in the price of the underlying coin - though keep in mind that a rising price in such cases will result in a loss for you.

Unfortunately, you can't benefit from any of this at Interactive Brokers, as it doesn't offer cryptos as CFDs. For a top-notch crypto CFD selection, we suggest you try brokers such as Pepperstone, Capital.com or Skilling.

Ready to start trading? Read our general overview of CFD trading tips and strategies, all of which also apply to crypto CFDs.

The blockchain technology behind cryptocurrencies and the digital infrastructure built around crypto trading is what makes crypto so exciting and fascinating for a lot of geeky traders; but it's the same aspect that makes crypto trading so intimidating and complex to less tech-savvy investors.

Owning actual cryptocurrencies requires familiarity with basic cryptographic concepts such as public and private keys. Setting up so-called wallets (which can be digital or even physical) to store your coins also requires quite some technical knowledge. And then you need to safe-keep the keys to your wallets or else kiss your crypto coins goodbye. Alternatively, you can keep and trade your coins at a cryptocurrency exchange, but that carries its own risks (more on those below).

By contrast, there's no need to worry about any of these tech aspects when trading crypto CFDs at an online broker. Buying or selling crypto CFDs is no more difficult than buying a simple stock or any other tradable asset. It is also usually easier, quicker and cheaper to withdraw your money from an online broker than from a crypto exchange. Still, if you're interested in how the underlying market works, read our in-depth guide to cryptocurrencies.

Whatever you trade, the safety of your funds and assets is always of paramount importance. This is where the benefits of crypto CFDs traded at online brokers are most apparent over “real” cryptos traded on crypto exchanges and in peer-to-peer transactions.

The biggest difference is that online brokers are more strictly regulated; whereas regulation for crypto exchanges and peer-to-peer crypto transactions is, at best, a work in progress. What does this mean for you?

• Regulations prescribe what a broker can and can't do with your money; how it can promote its products and services; and what technical, financial and legal requirements it must meet to be allowed to operate.
• Many top-tier regulators also maintain investor protection regimes that compensate clients in the event of broker bankruptcy (usually up to a certain amount).
• Regulators closely monitor whether brokers follow the rules, and have the power to penalize brokers that fail to comply with applicable laws.

As a result, well-regulated online brokers are less likely to default or be exposed as a scam. We at BrokerChooser only recommend brokers where the majority of clients belong to an entity overseen by a top-tier regulator. If in doubt about a broker, check our scam broker directory.

Such oversight is still largely lacking for crypto exchanges, making the industry more vulnerable to fraud. In a recent high-profile example, FTX, the world's third-largest crypto exchange at the time, imploded in November 2022, the result of allegedly fraudulent activities by the company's leaders. FTX's liquidity problems, compounded by the subsequent alleged theft of almost $500 million worth of crypto tokens from the platform, left crypto traders and equity investors with the prospect that some or all of their money may never be recovered.

Risks of trading crypto CFDs

That said, solid regulatory oversight doesn't mean that crypto CFD trading at online brokers isn't without considerable risk. Trading with leverage is always highly risky, as adverse movements in the price of the underlying asset get multiplied and can lead to sizable losses on your initial investment. This is especially true for crypto CFDs, as cryptocurrency prices tend to be much more volatile than, let's say, stock prices or stock indices.

Because of this, regulators sometimes apply stricter rules to crypto CFD trading - for example, the UK's Financial Conduct Authority banned the trading of crypto derivatives (including CFDs) starting January 2021.

If you do decide to trade crypto CFDs, you can mitigate risk by setting up stop-loss orders, manually lowering leverage (if your broker allows), and making sure you're at a broker that offers negative balance protection.