Traditional banks are getting closer and closer to crypto-currencies, especially by offering derivatives on our beloved digital assets. This is now the case with Swiss bank Dukascopy, which offers CFDs on Bitcoin and two other crypto-assets.
Products to facilitate exposure to cryptos
Switzerland is among the most crypto-friendly countries on the planet, even though El Salvador recently eclipsed the spotlight by making Bitcoin a legal tender. Due to its flexible and well-tailored cryptocurrency legislation, the chocolate country has thus already seen many Bitcoin and altcoin derivatives being set up on traditional Swiss exchanges.
As reported by Finbold, Dukascopy has just announced, on June 21, that it will make CFD contracts on the following 3 cryptos available to its clients: Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC).
“Unlike traditional crypto buying, crypto CFD trading allows for speculative trading, without having a digital portfolio. There is no need to own these crypto-currencies directly, which eliminates [storage and] cybersecurity risks. “Dukascopy announcement
A CFD (contract for difference) is a contract that stipulates that its seller will have to pay its buyer the difference between the present value of an underlying asset, at the time of entering into the contract, and the value of the underlying asset on the expiration date of that contract. But if the difference is negative, then the buyer pays the difference to the seller.
In this case, the difference will be paid in US dollars, which should encourage traders in traditional markets to speculate on the price of these cryptos, since they will not have to deal with the problem of their storage, as with any CFD on commodities (gold, oil, …).
This is an additional opportunity to get interested in and trade crypto-currencies that opens up for Dukascopy bank customers. At this rate of appearance of new crypto-currency derivatives, there will soon be only a Bitcoin ETF validated by the US SEC left to wait, because on that side, it may still be a long time coming.