Learn the difference between crypto prop firms and crypto exchanges. Compare capital, risk, and profits and discover how Cointracts fits in.

The crypto trading world is evolving quickly. Most traders know about crypto exchanges like Binance or Coinbase, but fewer understand what a crypto prop firm is and how it works.

If you’re deciding between trading with your own capital on an exchange or scaling with funded accounts from a prop firm, this guide will help. We’ll explain both models, highlight the pros and cons, and show how Cointracts a leading crypto-only prop firm fits into the picture.

What is a Crypto Prop Firm?

A crypto proprietary trading firm (prop firm) gives skilled traders access to company capital. Instead of risking thousands of dollars, you pay a one-time evaluation fee, prove your strategy, and unlock a funded account.

• Trader’s role: Pass the evaluation by following rules like maximum drawdown limits.
• Firm’s role: Provide funding once you pass.
• Revenue model: Evaluation fees + a small share of profits.
• Trader benefit: Keep up to 90% of profits while limiting risk to just the entry fee.

Example with Cointracts: A trader pays $79 for a $10K Grow Challenge. After passing, they manage a $10K account and keep up to 90% of profits, with daily withdrawals and no KYC a major advantage over forex-heavy firms.

What is a Crypto Exchange?

A crypto exchange is a platform where you directly buy, sell, and trade cryptocurrencies using your own funds. Popular exchanges include Binance, Bybit, and Coinbase.

• Trader’s role: Deposit and risk personal capital.
• Exchange’s role: Facilitate trades and charge fees.
• Revenue model: Transaction fees, spreads, and funding costs.
• Trader benefit: Full ownership keep 100% of profits and losses.

While exchanges are accessible to everyone, the risk lies entirely on the trader. If your $1,000 trade loses 50%, that loss is entirely yours.

Crypto Prop Firm vs Crypto Exchange: Side by Side

For traders who want to scale with less risk, firms like Cointracts are a better fit. For those who want direct ownership, exchanges remain the go-to option.

Which Should You Choose?

• A crypto prop firm is best for traders with skill but limited capital. Instead of risking personal savings, you use the firm’s money and share profits.
• A crypto exchange is best for individuals who want direct access to crypto markets and are comfortable with full financial risk.
  

Cointracts combines the best of both worlds: you trade crypto with full market exposure but without risking your own funds beyond the entry fee. This makes it a unique bridge between the exchange model and the prop firm model.

FAQ

1. What is a crypto prop firm?

A crypto prop firm funds traders with company capital after they pass an evaluation. Traders keep most of the profits while the firm takes a small share.

2. How is a crypto prop firm different from a crypto exchange?

A crypto prop firm provides funding for skilled traders, while a crypto exchange is a marketplace where individuals trade with their own money.

3. Do traders risk their own money with a prop firm?

No. The only risk is the one-time evaluation fee. Traders don’t risk personal capital once funded.

4. Who owns the profits in a crypto prop firm?

Profits are split. Traders usually keep 80–90%, and the firm keeps the rest. Cointracts currently offers up to 90% profit split, with daily withdrawals.

5. Who owns the profits in a crypto exchange?

Traders keep 100% of profits and losses because they are trading with their own funds.

6. Which is safer: a prop firm or an exchange?

A prop firm is safer for skilled traders because losses do not affect personal savings. Exchanges carry higher risk since users trade with their own funds.

7. Which is better for beginners?

Exchanges are easier for beginners to start with small amounts. Prop firms like Cointracts are better for experienced traders who want to scale quickly.

8. Can I use both a prop firm and an exchange?

Yes. Many traders practice on exchanges while using Cointracts or other prop firms for larger funded accounts.

The choice between a crypto prop firm and a crypto exchange depends on your goals

• Prop firms like Cointracts are ideal for skilled traders who want to grow faster without risking personal capital.
• Exchanges are better for those who want full ownership of their trades and direct access to the market.

In short:

• Prop firm = Your skills, our capital.
• Exchange = Your money, your trades.

If you want to scale with crypto-only funding, daily withdrawals, and up to 90% profit share, explore Cointracts the ultimate crypto prop firm.

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