Crypto CFDs and Derivatives Should be Regulated for Investor's Safety

Ishan Pandey: Hi Marcus Fetherston, welcome to our series "Behind the Startup." Please tell us about yourself and the story behind Eightcap?

Marcus Fetherston: Eightcap is a multi-award-winning derivatives broker that has been operating since 2009. We were founded in Melbourne, Australia, and since then, we have rapidly expanded our services and products to reach traders worldwide. I'm currently the Head of Operation here at Eightcap so, I can tell you a lot more about our proposition and current offering. Our mission is to build a home for both MT4 and MT5 brokers and to do this. We provide a wide range of products with exceptional service. With Crypto derivatives trading trending now more than ever, we wanted to tap into this space and provide an outstanding offering for our clients. We now offer over 250 crypto derivatives, including coins, crypto crosses and crypto indices, all with ultra-low spreads.

Ishan Pandey: Please tell us about Crypto CFDs and how do they work? Further, please tell us about regulations regarding Crypto CFDs?

Marcu s Fetherston: Trading Cryptocurrency derivatives has risk attached. Of course, this is the same as any leveraged products in the financial market. When you trade on leverage, both your profits and losses can be magnified. Crypto CFDs are no exception to this rule. Trading crypto CFDs allows you to take advantage of price fluctuations. At the moment, there is a lot of volatility in the market. This essentially means derivative traders can take advantage of both rising and falling prices making volatility an attractive aspect of trading crypto derivatives. With us, derivative traders can open positions in the crypto derivatives market via the MT4 and MT5 platforms.

It's so easy for retail traders to fall victim to scams by questionable companies that aren't regulated. So, it is essential for any retail trader to only open accounts with brokers that are regulated by notable regulatory bodies. Eightcap is regulated in multiple jurisdictions. We are regulated by the Australian Securities and Investments Commission (ASIC), the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC) and the Securities Commission of the Bahamas (SCB).

As cryptocurrency trading has gained a lot of traction, especially in the past few years, regulation seems to have become a hurdle for retail traders. Derivative traders will need to see if their country of residence allows for them to trade cryptocurrency CFDs. We have stringent KYC measures in place when onboarding clients and make it very clear which countries we can accept retail traders from and which countries we don't.

Ishan Pandey: A lot of cryptocurrency CFDs platforms are operating without a license from the regulator where they are registered. What are your views on such unregulated cryptocurrency CFDs platforms and what are the risks attached with it?

Marcus Fetherston: We recommend that all derivative traders looking to open positions on the financial markets do their due diligence and research first. It's not easy if you are new to CFD trading, especially if you do not know who to open an account with. The CFD industry is swamped with brokers, so it is essential to choose one that meets your trading goals and can also count on for support.

There are many risks associated with trading on an unregulated CFD platform. The biggest one is the risk of losing money. With a regulated broker such as Eightcap, retail traders are protected from fraud and ultimately have the peace of mind that they are with a broker that must comply with the rules laid out by their regulatory body.

Ishan Pandey: Please tell us about MT4 software and what are its advantages?

Marcus Fetherston: With the MT4 platform, traders can open positions on Forex, Indices, Commodities and Cryptocurrency CFDs. There are many advantages of using the MT4 platform and what makes us stand out with our MT4 offering is the customer support that goes hand in hand with our products. Our dedicated team of account managers and customer support agents are there on a 24/5 basis to help our clients at every stage of their trading journey. The MT4 platform itself is widely used and one of the most popular trading platforms. For example, our clients have access to over 400+ financial instruments via the MT4 and MT5 platforms. When trading with Eightcap's MT4 platform, clients will be able to trade CFDs with our raw account to experience spreads from 0.0pips. Alternatively, they can opt for our standard account and still experience low spreads with zero commission charged. Derivative traders can get started with an Eightcap MT4 account with as little as $100, with various funding methods such as BTC, Tether, PayPal, Bank Wire Transfer, Credit/Debit card and more.

Ishan Pandey: What advice would you give to traders on how to trade financial instruments?

Marcus Fetherston: Our primary mission is to build a home for both MT4 and MT5 traders. Therefore, preparing retail derivative traders for the financial market is integral to our service. My advice would be to really research the asset you want to trade and make sure you are trading with a broker that meets your needs. Education should be core to your trading strategy, from creating an effective trading plan to understanding more about technical analysis and how you can use that to make the most out of volatility. Every derivative trader should know these things, and a broker that provides free educational resources should be at the top of the list when trying to trade CFDs.

With the platform clients have access to a vast library of educational articles that are updated frequently. They also receive regular market updates that cover all assets, especially crypto, and the trading week ahead, allowing traders to prepare for the key financial events and announcements that can affect the markets. Additionally, we also ensure we have events and webinars scheduled throughout the year so that our clients are consistently brushing up on their trading skills or getting expert insights from professional traders.

Ishan Pandey: What are your views on Web3 and how can it be leveraged in different industries?

Marcus Fetherston: The main advantage of Web3 is decentralisation, and this will benefit users in the long run when Web3 is leveraged in different ways and various industries. Right now, the idea is that Web3 is the next stage of the internet. We lived in a world of Web1, which only involved static HTML; we progressed onwards to Web2. Unfortunately, this has led to data breaches and is ultimately a centralised space. It's exciting to see how we can progress into the next era of the internet, especially with tokenisation as an incentive for users to develop and maintain their services in this space.

Ishan Pandey: How do you see the Web3 revolution impacting the development of dApps and the DeFi space?

Marcus Fetherston: If we look at an existing app, for example, Twitter, certain features that currently exist in Web2 could be revolutionised. At the moment, Twitter is a centralised app, and therefore, all tweets and accounts are inevitably censored. If we have Twitter as a dApp, we are looking at a version where everything is decentralised, so there won't be the same form of censorship as we see today. When we look at the way Web3 can revolutionise the DeFi space, well, for one, there won't be any need for personal data; therefore, payments won't be prevented or not allowed.

Right now, in Web2, payment apps can decide not to process payments for different reasons. On the other hand, many different businesses have started to accept payments using crypto, so we are already moving towards a DeFi space. Eightcap accepts deposits in BTC and Tether and multiple other payment options to make the funding and withdrawal process seamless and easy for our clients.

Ishan Pandey: What role has the pandemic played in allowing traders to profit from cryptocurrency investments? Also, what do you think the post-covid-19 scenario would look like for the blockchain ecosystem?

Marcus Fetherston: I can't comment on how the pandemic has affected profit for traders. But due to the pandemic, there has been substantial amounts of volatility across several financial instruments. We have seen indices rise and plummet within the space of the month. For example, at the start of the pandemic, on February 19, 2020, the S&P 500 closed at an all-time-high (at the time).

By March 2020, the index had dropped by more than a 51% decline. There has been an influx of new traders who have wanted to take advantage of price volatility. That's why we felt it vital to meet the demand for trading with educational resources and outstanding customer support. We wanted both new and experienced traders to make the most of market opportunities but have the correct tools and resources in place to do so.

Ishan Pandey: According to you, What new trends are we going to see in the blockchain industry?

Marcus Fetherston: The rise of NFTs is a big trend that could continue in 2022. We have already seen it taking hold of the music and art world. It will be interesting to see how other industries also use NFTs going into 2022. Many big-name brands want to get involved with NFTs, Nike to name one in particular, with their patent already placed on the virtual sneaker ‘CryptoKicks’ and I think this is a frenzy that is just starting.

The ‘Metaverse’, a new digital world built around a fully functioning economy, comes up a lot when discussing trends in this space. Facebook has already announced this year that it would help bring the Metaverse to life, and if this is fulfilled, it could change everyday life as we know it. The Metaverse will be trending in 2022, especially as companies such as Decentraland have already started using cryptocurrency so that gamers can monetise their creations. We have included the Decentraland CFD and AXS CFD in our award-winning crypto offering to meet this trend. Our clients will be able to go long and short as the news around the Metaverse continues to progress.

Whilst we see a further expansion into defi and further decentralization of more apps and technologies, the larger challenge in crypto will be building better bridging between the traditional finance world and the vast opportunities that defi and crypto present. As such I think we will see a greater transfer of institutional businesses continue moving into crypto to help facilitate bridging this gap between retail users and the world of crypto.