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Does Taking Exposure To Bitcoin Via A Spread Bet Avoid Certain Market Infrastructure Risks And Other Hassles


Hedge99

Question

If I open a spread bet in Bitcoin this will give me investment exposure to Bitcoin, but does this avoid certain risks and other hassles were I to buy Bitcoin itself?  For example I wouldn't be required to open a Bitcoin wallet, I would not need to worry about the counterparty risk associated with Bitcoin exchanges, I wouldn't have to worry about my wallet  being hacked / frozen / locked or trading liquidity issues.  Apart from the normal investment risk, is my only other risk that of credit risk to IG?  Thing is though, is IG taking an exposure in the underlying which I will indirectly be exposed to if there is a problem.

Obviously I will need to upgrade my account to Professional status to trade in Bitcoin spread bets.

My first post on here.  Thanks, Regards.

 

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4 hours ago, Hedge99 said:

If I open a spread bet in Bitcoin this will give me investment exposure to Bitcoin, but does this avoid certain risks and other hassles were I to buy Bitcoin itself?  For example I wouldn't be required to open a Bitcoin wallet, I would not need to worry about the counterparty risk associated with Bitcoin exchanges, I wouldn't have to worry about my wallet  being hacked / frozen / locked or trading liquidity issues.  Apart from the normal investment risk, is my only other risk that of credit risk to IG?  Thing is though, is IG taking an exposure in the underlying which I will indirectly be exposed to if there is a problem.

Obviously I will need to upgrade my account to Professional status to trade in Bitcoin spread bets.

My first post on here.  Thanks, Regards.

 

Hi @Hedge99,

Thank you for your post and welcome to the IG Community.

Effectively, you do not need hold a Crypto wallet to trade on Cryptos with IG. You are betting on price changes.

Something you may consider is the overnight funding:
"Our daily overnight funding rate is currently 0.0347% (12.5% per Annum) for bitcoin, 0.0417% for the Crypto 10 Index and 0.0556% (20% per Annum) for all other cryptocurrency markets. At present, clients with a long position will pay this overnight funding rate, while clients with a short position will receive on the overnight funding rate. In addition, a 7.5% per-annum IG admin fee will also apply for both long and short positions."

https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/products-markets-and-trading-hours/what-are-igs-bitcoin-spread-bet-product-details

IG will hedge your exposure in the underlying market,so our interests are aligned with yours. you won't be exposed to IG exposure.

I hope that it helps !

All the best - Arvin

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