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Crypto prop challenges have become a fast-growing path for traders who want to access larger capital without risking their own money. These programs, offered by proprietary trading firms (prop firms), allow traders to prove their skills under structured conditions. If they succeed, they receive a funded account backed by the firm’s capital and keep a share of the profits.
This article explains how crypto prop challenges work, the process involved, the benefits and risks, and key
considerations for participants. Whether you’re a seasoned crypto trader or just starting, this guide will help you understand the mechanics of crypto prop challenges and determine if they align with your trading goals. their benefits and risks, and key considerations for traders. We’ll also highlight Cointracts, a crypto-only prop firm that offers one of the most trader-friendly challenge models in the industry.
What is a Crypto Prop Challenge?
A crypto prop challenge is a program offered by proprietary trading firms (prop firms) that allows traders to demonstrate their skills and potentially manage the firm’s capital. Instead of directly investing their own money, traders participate in a challenge designed to assess their trading abilities, risk management, and consistency. Successful completion of the challenge leads to the trader being funded with the prop firm’s capital, allowing them to trade with significantly larger amounts than they could otherwise afford.
If the trader passes, they earn a funded account with the firm’s real capital and share profits. Many firms offer 50 to 90% profit splits.
Most prop firms follow a similar structure
Two Phases of Evaluation: Phase 1 (profit target around 8–10%) and Phase 2 (profit target around 5%).
Drawdown Limits: Maximum daily loss around 5%, total loss around 10%.
Minimum Trading Days: Usually 5–10 trading days.
Profit Split: Between 50% and 80%.
Refunds: Some refund challenge fees on first payout, others don’t.
Time Limits: Many firms impose strict deadlines (e.g., 30 days per phase).
This setup is designed to protect the firm’s capital and ensure only disciplined traders move forward. But for traders, it can feel restrictive and often tilted in favor of the firm.
Example: Cointracts
Cointracts offers crypto-only challenges with accounts ranging from $2K to $100K. Traders enjoy:
90% profit share on funded accounts
Daily Withdrawals Traders don’t wait weeks or months to access profits.
Unlimited Time: No deadlines to hit profit targets trade at your pace.
Refund of challenge fee on the first payout
No KYC required during the evaluation phase
No Trading Style Restrictions: Cointracts allows scalping, swing trading, hedging, algorithmic trading, and news trading. Many firms restrict these methods, but Cointracts gives traders complete freedom to use their edge.
The Crypto Prop Challenge Process
The evaluation process is usually split into phases:
Registration and Account Setup
Register with a prop firm (like Cointracts).
Choose your challenge account size (Cointracts offers $2K, $10K, $25K, $50K, and $100K).
Pay the one-time participation fee, which covers platform costs and risk management tools.
Rules and Objectives
Firms set specific performance targets. Common rules include:
- Profit Target: Reach a set percentage (e.g., 8% profit).
- Max Daily Loss: Can’t lose more than a certain % in one day (e.g., 5%).
- Max Overall Loss: Typically capped at 10% of the starting balance.
- Minimum Trading Days: Usually around 5.
- Consistency Rules: To prevent oversized one-off trades.
At Cointracts, Stage 1 requires 8% profit, and Stage 2 requires 5% profit. Unlike many firms, Cointracts has no time limits, giving traders maximum flexibility.
Trading the Account
Traders follow the rules while executing trades on crypto markets. Breaching rules results in failure, making risk management the key to success.
Verification (Optional)
Some firms add a second verification stage. Cointracts follows the standard two-phase model.
Funded Account
Traders who pass receive a live funded account.
- At Cointracts, traders keep 90% of profits.
- Daily payouts are available a rare feature among prop firms.
- Challenge fees are refunded on the first payout.
Benefits of Crypto Prop Challenges
Access to Capital: Trade accounts far larger than you could fund yourself.
Profit Sharing: Earn a high share of profits (Cointracts offers 90%, among the best in the industry).
Skill Development: Build trading discipline and refine strategies.
Community Support: Many firms provide trader communities for mentorship and networking.
Lower Personal Risk: Only the challenge fee is at risk, not personal trading capital.
Risks of Crypto Prop Challenges
Challenge Fees: Entry fees are non-refundable if you fail.
Strict Rules: Many traders fail due to tough risk controls.
Time & Effort: Success requires focus, patience, and discipline.
Potential Setbacks: Losses during evaluation can be discouraging.
Firm Reputation: Some firms operate unfairly, so picking the right one is crucial.
Choosing a transparent, crypto-first firm like Cointracts helps minimize these risks.
Key Considerations Before Starting
Have a Trading Plan: Ensure your strategy matches the rules.
Focus on Risk Management: Respect daily/overall loss limits.
Stay Disciplined: Avoid revenge trading or over-leverage.
Research the Firm: Check transparency and payout history.
Keep Realistic Expectations: Challenges are tough by design.
90% profit share, daily Payouts,
Crypto prop challenges are a powerful way to prove your trading ability, scale up, and earn profits without risking personal funds. However, they demand discipline, strategy, and emotional control.
Cointracts is a strong option for traders looking for a crypto-focused prop firm. With 90% profit share, daily payouts, unlimited time for challenges, and no KYC barriers during evaluation, it offers one of the most trader-friendly setups available today.
By choosing the right firm and managing risk effectively, traders can turn prop challenges into a gateway for real opportunities in crypto trading.
