CFDs (contracts for difference) on cryptocurrency allow traders to speculate on cryptocurrency prices without owning the underlying asset.

Traders typically forecast a cryptocurrency's price movement - upward or downward - while pledging a small portion of the asset's value as collateral. If the trade goes well, the broker will pay the trader the difference between the opening and closing prices. If the trade moves against the trader, he or she books a loss and pays the difference to the broker. The profit (or loss) is calculated by multiplying the asset's value change by the quantity.

One of the primary distinctions between crypto spot trading and crypto CFDs is the ability for traders to use leverage. CFDs allow traders to use leverage to increase their profits with a small initial investment. Leverage, while increasing profits, can also magnify losses.

Crypto spot trading, on the other hand, does not allow for leverage and can only profit from price increases. Crypto spot trading gives you complete ownership of the asset you are trading, allowing you to use it for other purposes.

In contrast to crypto CFDs, which require you to pay interest swap fees for holding positions overnight, spot trading allows you to hold positions for as long as you want without incurring any fees.

Crypto spot trading and crypto CFDs are both intriguing ways to gain exposure to the cryptocurrency market. Your ultimate decision between the two is determined by your investment approach and strategy.