Are you limiting your revenue by keeping users trapped in “paper” crypto? For years, Contracts for Difference (CFDs) were the go-to for brokerages to offer price speculation without touching the blockchain.
But the market has evolved. By offering direct ownership, you unlock multiple revenue streams such as staking fees, transfer commissions, and participation in DeFi activities. Moving beyond CFDs allows you to tap into the full potential of the digital asset economy, driving higher customer lifetime value (LTV) and creating diversified income opportunities.
The common objection is, “We’re a financial institution, not a tech company.” You don’t have to be. Modern infrastructure allows you to launch spot crypto trading without building from scratch. Here’s how to pivot and meet the growing demand for direct asset ownership.
Why CFDs Are Losing Ground to Direct Crypto Trading
Crypto trading has evolved from a speculative fringe activity into an infrastructure-driven market, To stay competitive, platforms are increasingly adopting advanced crypto trading tools to meet the sophistication of modern users.
In addition, regulatory pressure on derivative-only models is mounting. In regions like the United Kingdom and parts of the EU, the regulatory arbitrage that once made CFDs attractive is closing. To ensure long-term viability, platforms must pivot toward spot trading and direct ownership.
The Limitations of the Legacy CFD Model
To understand the potential of adding a crypto trading division, it’s important to examine the limitations of the legacy CFD model.
In a CFD setup, the platform typically acts as the counterparty (or routes to one). The user profits if the price moves in their favor, and the platform profits from spreads, commissions, and overnight financing fees. While this model has been effective in high-volatility environments, it presents notable business limitations:
- Missed Revenue Opportunities: Revenue is limited strictly to trading activity, leaving significant potential untapped. You miss out on on-chain transaction fees, staking management fees, and ecosystem participation.
- Trust and Retention Risks: In B-book models, the platform’s profits are often tied to user losses, which can erode trust and impact customer loyalty. A more diversified revenue approach reduces reliance on this model and fosters stronger relationships with users.
- Regulatory Challenges: High-leverage derivatives face increasing scrutiny, restricting scalability. Transitioning to crypto derivatives like perpetual futures provides a more flexible and sustainable path for business expansion.
By broadening the revenue model and addressing these challenges, businesses can unlock new growth opportunities, enhance customer trust, and build a more resilient platform.
What Direct Crypto Trading Really Means
Direct crypto trading, often called spot trading, involves the actual purchase of the digital asset. When a user buys Ethereum on a spot market, the ledger updates to reflect true ownership.
For operators, the value lies in Asset Under Management (AUM). By offering services like staking, lending, or yield generation, platforms move beyond short-term transaction fees. This creates a recurring revenue model that stabilizes the business even during periods of low market volatility.
How Platforms Monetize Direct Crypto Trading
Moving beyond CFDs isn’t just about user experience; it’s about revenue diversification. A robust spot trading ecosystem offers multiple ways to monetize user activity.
Spot Trading Fees
This is the foundation of the exchange model. Platforms charge maker and taker fees on every transaction. Unlike the wide spreads often embedded in CFD pricing, spot fees are typically transparent (ranging from 0.1% to 0.5%).
While the percentage per trade might be lower than a CFD spread, the sheer volume on spot markets, driven by automated market makers and institutional rebalancing, often makes up for it.
Liquidity & Market Quality
In both forex and crypto markets, liquidity is key to attracting professional traders. However, crypto platforms can leverage advanced order books and liquidity aggregation to internalize spreads or charge for superior execution. High-quality liquidity ensures tight spreads and minimal slippage, which are critical for institutional players.
This creates a flywheel effect: better liquidity attracts more volume, which in turn generates more revenue. For business owners, the mechanics of liquidity in crypto are not fundamentally different from forex, making it a familiar and scalable opportunity.
Earn, Staking, and Lending Products
Crypto platforms can unlock additional revenue streams by offering services like staking and lending, which are unique to the crypto ecosystem. Proof-of-Stake (PoS) assets like Solana or Ethereum generate yield, and platforms can facilitate this process for users through wallet infrastructure systems. By taking a percentage of the yield (e.g., a management fee), platforms can generate consistent revenue independent of trading volume.
For example, if a platform manages $10 million in staked assets at a 5% reward rate, that generates $500,000 in rewards annually. A 20% management fee on those rewards adds $100,000 in pure margin revenue. This is a unique opportunity that crypto offers, setting it apart from traditional CFD models.
OTC and Institutional Services
Spot markets also enable platforms to service high-net-worth individuals (HNWI) and corporate treasuries looking to acquire assets for their balance sheets. Over-the-Counter (OTC) desks facilitate large block trades without moving the market price, commanding premium commissions for the service. This is similar to how forex markets handle large institutional trades, making it a familiar and lucrative avenue for business owners to explore.
CFDs vs Direct Crypto Trading: A Clear Comparison
For decision-makers evaluating the pivot, the differences are distinct:
| Feature | CFDs | Direct Crypto Trading |
| Asset ownership | No (Synthetic) | Yes (Actual Asset) |
| Revenue sources | Spreads, Overnight fees | Trading fees, Staking, Withdrawal fees, OTC |
| User engagement | Low (Transactional) | High (Ecosystem participation) |
| Institutional appeal | Limited | Strong |
| Tech burden | Low | Low (if outsourced) to High (if in-house) |
| Long-term viability | Cyclical / Regulatory risk | Sustainable / Infrastructure-based |
How to Launch Direct Crypto Trading Without Building Tech
The biggest barrier to entry for banks and brokerages has historically been technology. Building a matching engine, securing wallet infrastructure, and managing blockchain nodes is a massive undertaking that requires specialized engineering talent.
However, the “buy vs. build” debate has largely been settled in favor of buying, or more accurately, partnering.
Platforms can now leverage white-label crypto exchange solutions and API-based infrastructure to launch spot trading in weeks rather than years. This approach allows financial institutions to own the customer relationship and the front-end experience while offloading the heavy lifting to infrastructure partners.
To launch successfully without becoming a tech company, you need a partner that provides:
- High-Performance Matching Engines: You need an order matching system capable of handling high throughput during market volatility without crashing.
- Liquidity Connectivity: You don’t need to be a market maker. You need infrastructure that aggregates liquidity from top global exchanges and liquidity providers, ensuring your users get the best price execution.
- Wallet Infrastructure Systems: Security is paramount. Look for providers offering MPC (Multi-Party Computation) wallet infrastructure. Note: As a platform, you are looking for the infrastructure to manage keys and custody securely, not just a retail wallet app.
- Compliance Modules: Essential for offering direct trading is the ability to screen transactions on-chain. Your infrastructure should integrate with KYC (Know Your Customer) and KYT (Know Your Transaction) tools to flag high-risk wallet addresses automatically.
Why This Model Is More Sustainable Long Term
The crypto market is cyclical. During bear markets, speculative volume dries up. If your entire business model relies on CFD leverage and churn, your revenue evaporates when volatility drops.
Direct crypto trading offers a more sustainable path. When prices drop, spot traders often switch from trading to accumulating and staking. If you support these functions, you retain the user and continue to generate revenue through custody or staking fees even when trading volume is low.
In addition, as institutional adoption grows, the demand for compliant, regulated spot venues is outpacing the demand for unregulated derivatives. By building the infrastructure for direct ownership now, platforms position themselves as serious players in the future of digital finance, rather than just another venue for speculation.
Transitioning from CFDs to direct trading is not just a technology upgrade; it is a strategic evolution. It moves your business from the periphery of the crypto economy to its center, capturing the full value of the asset class. ChainUp‘s comprehensive suite of solutions can help you make this transition smoothly, integrating all the necessary infrastructure for direct trading.
Ready to build a more resilient crypto business? Contact ChainUp today to learn how our solutions can help you seamlessly integrate direct trading.
