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What is crypto prop trading?
If you are looking for an alternative to working with traditional Forex prop firms, you might be interested in crypto prop trading firms.
A crypto prop firm is a company that offers a profit split on a funded account assigned to traders who pass their trading challenge. The challenge (which is paid by the trader) serves as a revenue source for the prop firm and to assess the trader's ability to trade profitably while adhering to the company's risk management rules.
Most crypto prop firms keep their traders on demo accounts even after they have passed the challenge. This allows them to avoid potential regulatory issues while still allowing the company to copy profitable traders' positions in their own accounts.
The profit earned in that way, even on a demo account, is still getting split between the trader and the firm, and the trader can withdraw it as if it were live funds.
Generally, a crypto prop firm is one of the simplest ways to start trading cryptocurrency pairs without worrying about starting capital.
It is important to remember that only a small percentage of traders pass an evaluation challenge, while even fewer reach their first payout from prop firms.
Main differences between Forex prop firms and crypto prop firms
- Unlike Forex, cryptocurrency trading is available 24/7, so crypto firms offer more trading time flexibility.
- Crypto prop firms are more forgiving towards news trading than Forex prop firms.
- Regulation is laxer as few jurisdictions regulate crypto trading (which is done mostly on demo at prop firms) same as Forex trading.
- Forex is generally more liquid than cryptocurrencies. Major currency pairs (such as EUR/USD and GBP/USD) are far more liquid than BTC/USD or ETH/USD.
- In addition to the usual technical, fundamental, and sentiment analysis, crypto trading can be benefit from on-chain analysis.
- Cryptocurrency pairs are more volatile than traditional currency pairs (except for some exotic pairs).
- The costs to trade cryptocurrencies on exchanges (how most crypto prop firms work) are usually higher than those for trading currency pairs at brokers or Forex prop firms.
- The choice of trading platforms is significantly different. While most Forex prop firms offer MetaTrader 5 and cTrader, crypto prop firms often work with exchanges' proprietary platforms (with TradingView charts).
Top crypto prop firms
If you are set on trying yourself in cryptocurrency trading using a funded account from a prop firm, you can browse our selection of crypto prop firms to find the one that works best for you:
HyroTrader
HyroTrader offers generally favorable challenge conditions with refundable fees and a free trial to test the platform and conditions. Their currently supported platforms include ByBit and CLEO.
Funding programs
HyroTrader offers six programs based on the capital. Each program can be accessed either via a one-step challenge or a two-step challenge:
- Two-step challenge: 89 USDT
- One-step challenge: 119 USDT
- Two-step challenge: 159 USDT
- One-step challenge: 219 USDT
- Two-step challenge: 299 USDT
- One-step challenge: 399 USDT
- Two-step challenge: 399 USDT
- One-step challenge: 539 USDT
- Two-step challenge: 599 USDT
- One-step challenge: 799 USDT
- Two-step challenge: 999 USDT
- One-step challenge: 1,399 USDT
Funded programs are scaled every 4 months if profit target of 20% is reached, you have positive account balance, and you had at least two payouts during the period.
Scaling includes a 25% increase in capital (up to 10 times your initial balance of $1 million, whichever comes earlier) and a 5% increase in profit splits (up to 90%).
You choose to pass either a 1-step challenge or a 2-step one. The second step is half as long (5 trading days minimum) and requires half as much profit (5%).
Challenge conditions
10% for 1-step, 10% + 5% for 2-step
4% for 1-step, 5% for 2-step
6% for 1-step, 10% for 2-step
10 days for 1-step, 10 + 5 days for 2-step
Normal daily drawdown is calculated from the highest equity value through the day. If a Swing Daily Drawdown Upgrade option is purchased by the trader, drawdown is calculated from the day's starting equity.
HyroTrader prop firm parameters
USDT
Up to 1:100
Spot cryptocurrency pairs and crypto futures
ByBit, CLEO
Yes
USDT (TRC-20), USDC (BEP-20)
Crypto Fund Trader
Crypto Fund Trader offers a range of funding programs without time limit. There are six 1-phase programs, six 2-phase programs, and three no-evaluation instant programs.
Two Phases with six balance options. Phase 1 has 8% profit target. Phase 2 has 5% profit target. Both phases have maximum daily loss of 5%, 10% maximum overall loss, and a minimum of 5 trading days. Funded accounts received through a 2-phase challenge boasts an 80% profit split:
$58 fee
$110 fee
$240 fee
$360 fee
$598 fee
$1,150 fee
One Phase with six balance options. 10% profit target. Maximum daily loss set to 4%, 6% maximum overall loss, a minimum of 5 trading days, and an 80% profit split:
$63 fee
$120 fee
$262 fee
$399 fee
$656 fee
$1,250 fee
Instant funding with three starting balance options. Each one can be scaled up to $1,280,000 with double-ups upon reaching each 10% profit target. Maximum daily loss set to 4%, 6% maximum overall loss, no minimum trading days, and profit split scaling from 50% to 90%:
$125 fee
$240 fee
$475 fee
Crypto Fund Trader prop firm parameters
USD
Up to 1:100
Crypto futures, crypto CFDs, Forex pairs, indices, commodities, stocks
Match-Trader, ByBit, MetaTrader 5
No
Credit/debit cards, bank transfer, cryptocurrencies
How to choose the best crypto prop firm
Choosing the right crypto prop firm based on your requirements might not be as easy as it seems at first. Here are some basic tips to help you with the process.
Why are you opting for a crypto prop firm? Do you consider it a comfortable way to trade crypto? Do you want to get more disciplined? Are you ready to go through long evaluation periods? How much capital do you expect to manage? Answering these questions will help you find a crypto prop firm that is right for you.
Same with Forex prop firms and brokers, reputation is very important when choosing a crypto prop firm. With no regulatory oversight for such companies, their reputation will serve as the primary filter for you to verify whether the company isn't scam and whether it treats its traders justly.
The world of cryptocurrency trading isn't limited to spot pairs. There are futures and options too. Does the prop firm offer such instruments? Are you planning to trade some less popular cryptos? What is their stance towards trading exotic cryptocurrency pairs?
Ideally, you want as high profit split as possible. However, higher splits may come with strings attached, like higher evaluation fees or stricter trading conditions. You should be realistic about the split you can work with and the price you are ready to pay for it.
Challenge fees vary significantly among prop firms. Sometimes, a higher fee gives you access to better challenge conditions or a better trading platform. In that case you have to decide whether paying more is worth it. When everything else is the same, it makes sense to choose a crypto prop firm with lower rates.
Most crypto prop firms offer either TradingView or some custom trading platform with TradingView charts. Some also offer specific exchange-partnered platforms. You won't find a purely crypto prop firm offering a MetaTrader platform. Consequently, you won't have access to similar level of strategy automation that can be attained with Forex prop firms. Still, your choice of the platform most fit your actual trading needs: whether you need at least some automation, whether you want to be able to trade from your mobile device, what order types you need, and so on.
Even best traders working with bets prop firms sometimes need to talk to support to solve some issue. You want a crypto prop firm with a responsive support service that is professional enough to help you. A good way to assess its quality is by contacting it directly before you even purchase your first challenge. Another method is to read what other traders say about their experience with the firm's support.
Does the firm offer any trading education? Is it any good? Some crypto prop firms don't offer any training at all. Some offer free courses available to all members even without buying a challenge. While others provide premium lectures to traders who buy a challenge. It is up to you to decide whether you want firm-provided education but it rarely plays a significant role in selecting a prop firm.
Some crypto prop firms offer discounts on their fees — either time-based or condition-based. Others distribute discount coupons that let take a challenge at a reduced price. This is something to consider when comparing fees across multiple prop firms.
There are two sides to this question. First, the crypto prop firm itself should be legally registered in the country where it operates; it should also be legal for such business to operate in that country; it should also be legal for it to work with you as a resident of your country. But that is all for the prop firm to sort out. For you, it is important for cryptocurrency trading to be legal in your country of residence. If there are no restrictions on that, it should also be legal for you to operate a funded crypto account. However, when in doubt, it is best to consult a lawyer on your particular case. There may be some limited exposure to traditional Forex pairs even at crypto firms, particularly at those that operate via exchanges that have traditional currency pairs. However, trading such pairs is likely to be impeded by low liquidity and high spreads. If you prefer trading Forex pairs, it is better to look for a Forex prop firm. In theory, yes. In practice, this is very difficult. The vast majority of prop firm challenge buyers fail their challenge. Even those who pass often fail to remain profitable with the funded account. You shouldn't spend money that you cannot afford to lose on challenge fees and you need some backup plan in case your attempt with a crypto prop firm ends badly. No, there is no one best firm that works equally well for all traders. Prop firms differ by platform, charting tools, leverage, fees, regulatory restrictions, payout methods, and other parameters. There is no one size fits all among them.Crypto proprietary trading firms FAQ
Is crypto prop trading legal?
Do crypto prop firms only offer cryptocurrency pairs?
Can I earn for a living with crypto prop trading?
Is there such a thing as the best crypto prop firm?
Conclusion
A crypto prop firm can serve as a way to monetize your cryptocurrency trading ideas without risking too much capital of your own. It can also serve as a way to circumvent regulatory restrictions that wouldn't let you trade cryptocurrencies via your Forex broker.
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