Can I Buy Crypto on Trading 212?

You may have heard the buzz: crypto is taking over the world of finance, and you’re considering dipping your toes in. You’ve probably read the news, or maybe overheard a conversation at a café, about people trading Bitcoin, Ethereum, and other digital currencies on platforms like Binance or Coinbase. But what about Trading 212?

Here’s the spoiler: Yes, you can buy crypto on Trading 212, but there’s a catch.

Trading 212 is well-known as a commission-free stock trading platform, but its entrance into the crypto space has been more measured. They offer cryptocurrency trading through something called a CFD (Contract for Difference). This isn’t exactly like buying Bitcoin and holding it in a wallet like you might on other crypto exchanges. Instead, with CFDs, you’re speculating on the price movements of the cryptocurrency without owning the actual underlying asset.

Think of it like betting on a horse race without actually owning the horse. You’re in the game, but you don’t hold the keys to the castle. Intrigued? Let’s dive in.

Why Use Trading 212 for Crypto?

You might be asking, why bother with CFDs when you can just buy crypto outright? Well, there’s an angle here that might appeal to certain types of investors:

• Leverage: Trading 212 allows you to trade crypto with leverage. In plain terms, this means you can multiply your position size without having to put down the full amount upfront. If you’re looking to maximize your exposure to price swings, leverage can work in your favor.
• Flexibility: You can trade both long and short positions. So if you believe Bitcoin’s about to take a nosedive, you can bet on its decline.
• No Ownership Hassle: Since you’re not holding the actual asset, you don’t have to worry about securing your crypto in a wallet or losing your private keys.

But before you get excited, there’s a flip side.

The Downsides of CFDs

Now, here’s where it gets interesting—and potentially risky.

1. High Risk: Leverage amplifies both gains and losses. It’s a double-edged sword. While you can make significant profits, you can also wipe out your investment with one bad trade.
2. No Actual Ownership: If you’re a crypto purist, this could be a dealbreaker. You don’t own any Bitcoin or Ethereum; you’re just speculating on price movements.
3. Fees: While Trading 212 boasts no commission on trades, there are still spreads and overnight fees to consider, which can eat into your profits.

So, if your goal is to own cryptocurrency and transfer it to a wallet for long-term holding or transactions, Trading 212 is not your go-to platform. You’re better off using a dedicated cryptocurrency exchange.

How to Get Started on Trading 212

Getting started is easy enough, but since you’re trading CFDs rather than actual crypto, the process is a little different compared to traditional exchanges like Binance or Kraken.

1. Open an Account: If you haven’t already, download the Trading 212 app and create an account.
2. Deposit Funds: Fund your account using one of the supported payment methods. You can use a bank transfer, credit card, or even PayPal, depending on your region.
3. Find Crypto Assets: On the platform, navigate to the CFD section, and you’ll see the available crypto CFDs like Bitcoin, Ethereum, and Litecoin.
4. Place a Trade: Choose whether you want to go long (buy) or short (sell), and decide how much leverage you want to apply.
5. Monitor and Close: Keep an eye on your trades, and when you’re ready, you can close them out with a few taps.

But wait, is this strategy for you?

When Should You Use Trading 212 for Crypto?

Now that you understand the basics of how it works, let’s talk strategy. Should you use Trading 212 for your crypto investments? Here’s the kicker—it depends on your investment style.

• Active Traders: If you’re someone who likes to be in and out of trades quickly, profiting from small price movements, the CFD approach might be for you. The leverage offered by Trading 212 allows you to make larger moves with a smaller capital outlay.
• Long-term Investors: On the other hand, if you’re more of a buy-and-hold investor, who believes in the long-term future of Bitcoin or Ethereum, you might find this platform less appealing. Since you don’t own the underlying asset, you won’t benefit from holding your crypto in a personal wallet or using it for decentralized applications (dApps).

What Alternatives Do You Have?

If you’re looking for alternatives, there are plenty of other platforms that allow you to buy, sell, and hold actual cryptocurrencies:

1. Coinbase: One of the easiest platforms for beginners, offering a wide range of cryptocurrencies to purchase directly. You can also transfer your holdings to an external wallet.
2. Binance: Offers low fees, a massive selection of cryptocurrencies, and the ability to trade on margin (like CFDs, but with actual crypto).
3. Kraken: Known for its security and regulatory compliance, Kraken is another solid choice for those looking to buy and hold crypto.

Each of these platforms has its own pros and cons, so it’s important to research which one fits your needs best.

Is There a Future for Crypto on Trading 212?

The crypto world moves fast. Regulations shift, new products are introduced, and platforms evolve. As of now, Trading 212’s crypto offering is limited to CFDs, but there’s always the potential for them to expand into actual crypto trading. With the growing interest in digital assets, many traditional financial platforms are integrating more robust crypto offerings.

But, if you’re itching to trade Bitcoin on Trading 212 today, CFDs are your only option. It’s a great tool for speculation, but perhaps not the best for those who want to embrace the decentralized, “be your own bank” ethos of cryptocurrency.

In the end, the decision boils down to how you want to engage with the crypto space. Are you in it for the thrill of the trade? Or are you looking to be part of the future of finance?

The choice is yours.